From technological disruptions to evolving customer expectations, the myriad of challenges enterprises routinely face while staying competitive requires agile and innovative solutions. One solution that’s proving itself indispensable to leading businesses is to implement a skills-based workforce strategy.

What does that entail? By focusing on equipping employees with the right skills, organizations can successfully tackle some of their most pressing issues. In this article, PeopleFluent’s VP of Product, Gavin Beddow, delves into five key challenges and how a skills-based approach to L&D can pave the way for success.

1) Rapid Technological Advancements

It’s no secret that technology is evolving at an unprecedented rate, reshaping industries and redefining job roles. In the World Economic Forum’s 2025 Future of Jobs report, broadening digital access was identified as the largest macrotrend, with 60% of employers stating that they expected it to transform their business by 2030. Of this group, 86% of respondents said they expected AI to be behind this transformation, with other named technologies including robots and autonomous systems (58%), energy generation, storage and distribution (41%), new materials and composites (30%), and semiconductors and computer technologies (20%).

Enterprise organizations often struggle to stay ahead of the technological curve. They must not only keep up with the latest advancements but also ensure their workforce remains proficient in relevant technologies as they emerge. By embracing a skills-based workforce strategy, companies can proactively identify the skills needed to leverage emerging technologies and provide targeted training programs. This ensures that employees are equipped with the necessary competencies to adapt to technological changes and drive innovation within the organization.

KEEP LEARNING ABOUT SKILLS-BASED STRATEGY | ‘4 Ways AI Can Refine and Scale Your Skills Enablement Strategies’

2) Talent Shortage and Retention

The Workforce Challenge

The demand for talent continues to intensify, making it increasingly challenging for enterprises to attract and retain skilled employees. In a recent SHRM survey, 77% of HR professionals reported having difficulty recruiting for their full-time positions. This was due to a combination of:

• Low numbers of applicants (60%)
• Competition from other employers (55%)
• Candidates ghosting (46%)

The Skills Solution

Traditional recruitment methods alone are no longer sufficient in today's competitive market. A skills-based workforce strategy can help shift an organization’s focus from filling skills gaps with new hires to developing existing talent instead. Continuous learning opportunities and personalized career advancement pathways can be combined with an understanding of your skills profile to create new opportunities for your organization and your people. By investing in employee development, companies can foster a culture of learning and growth, thereby increasing employee satisfaction and reducing turnover rates that exacerbate talent shortages and increase hiring costs.

RELATED READING TO DOWNLOAD TODAY | ‘How to Successfully Design & Deploy a Skills-Based Talent Development Strategy’

3) Changing Customer Expectations

The Workforce Challenge

In an era of hyper-personalization, meeting customer expectations is paramount for business success. Enterprise organizations must adapt to evolving consumer preferences and deliver tailored solutions that address those needs.

The Skills Solution

A skills-based workforce strategy empowers employees to acquire customer-centric skills such as:

• Adaptability
• Attention to detail
• Collaboration
• Communication
• Creativity
• Critical thinking
• Empathy
• Patience
• Persuasion
• Problem-solving

In fact, recent research by Wiley found that 80% of respondents believe that soft skills are more important now than ever, especially in a context where AI technologies are becoming increasingly sophisticated. By nurturing these critical interpersonal skills (that AI bots are more likely to struggle to become suitable for), organizations can enhance customer satisfaction, build long-lasting relationships, and gain a competitive edge in the market.

ESSENTIAL READING FROM THE BLOG | ‘Bridging the Skills Gap: 7 Proven Tips to Enhance Employee Development’

4) Increasing Complexity of Global Markets

The Workforce Challenge؜

Expanding into new markets brings opportunities for growth, but it also comes with its own set of challenges. Enterprise organizations must navigate complex regulatory environments, cultural nuances, and diverse customer segments when operating on a global scale.

The Skills Solution؜

A skills-based workforce strategy enables companies to cultivate a diverse talent pool with not only specific language proficiencies but also a widespread and robust level of cultural awareness and international business acumen. By equipping employees with these skills, organizations can more effectively navigate global markets, drive expansion, and capitalize on new opportunities.

5) Digital Transformation and Change Management

The Workforce Challenge

Digital transformation has become imperative for enterprises looking to stay relevant in today's digital-first world. Deloitte’s 2023 Measuring Value from Digital Transformation survey found that 68% of leaders considered digital transformation “the single most important investment now and into the future that organizations can make to drive enterprise value”.

The Skills Solution

Implementing change within an organization can be met with resistance and inertia. A skills-based workforce strategy should incorporate change management principles, and emphasize the importance of adaptability and agility. By fostering a culture that values continuous learning and embraces change, organizations can successfully: 

• Navigate digital transformation initiatives
• Drive organizational agility
• Foster innovation

MORE ON CURRENT TRENDS | ‘6 HR Trends to Watch in 2025’

The Power of Skills: Final Thoughts

The adoption of a skills-based workforce strategy is essential for enterprise organizations looking to overcome modern-day challenges and thrive in a fast-evolving business landscape. By prioritizing skills development and empowering employees to acquire relevant competencies, organizations can enhance their competitive advantage, drive innovation, and achieve sustainable growth in the digital age.

Now is the time to embrace the power of skills and unlock the full potential of your workforce.

KEEP READING | ‘How to Implement and Leverage Skills Assessments to Enable Work’