In many countries — including South Africa — the demand for talent and skills greatly outstrips the supply. Rapid technological developments are augmenting roles at a pace we simply can’t keep up with. At least, we can’t keep up if we keep approaching work the way we always have. Enter the skills economy.
Today, skills are what matter. They are the new metric of measurement for every aspect of working life — both for businesses and employees. In a skills economy, both employees and employers value skills above all else. Let’s unpack how that works and what it means for the future of work.
What Is the Skills Economy?
The term “skills economy” refers to a new approach businesses and individuals are taking in relation to professional value and success. This new way of thinking places individual skills at the forefront of business decision-making and hiring while challenging the significance of traditional credentials and job titles. The skills in question encompass businesses’ requirements, employees’ abilities, and their proficiency in acquiring new skills.
A Shift From Previous Success Metrics
The transition to a skills economy demands that businesses rethink their strategy for hiring and employee retention. The skills economy necessitates a shift away from previous working methods. Here’s why:
- Businesses that assess people solely on metrics like their previous job titles, acquired degrees, or established companies they’ve worked for will miss out on talent — these metrics don’t always account for employee skill sets.
- Businesses that base their workforce plans on an annual inventory of static job titles won’t be able to pivot when things inevitably change. Adaptability is key in the skills economy.
- Businesses categorising work through “jobs” won’t capture the right skills for each task. In the skills economy, job descriptions as we know them are outdated; instead of a focus on responsibilities, the focus is now on skills and outputs.
To remain competitive in the skills economy, businesses must realign their entire organisation around skills development. But how does the skills economy work in a dual economy like South Africa?
The South African Skills Economy
South Africa is one of the world’s most unequal nations, and our acute shortage of skilled workers reflects this. The South African presidency has identified this skills shortage as the second most significant barrier to economic growth after our crippling power outages.
In a dual economy like South Africa, the skills economy could strengthen our economic prospects, benefiting businesses, employees, and the economy as a whole. Businesses can play a vital role in bridging the skills gap by leveraging their resources and expertise to develop effective solutions. By pivoting to a skills economy mindset, South African businesses can foster a collaborative ecosystem that benefits employees and employers.
Promoting a skills-based economy and employment regime and upskilling South Africans to meet this paradigm holds the potential to revolutionise the job market, leading to increased job opportunities and greater fairness among job seekers.
Levelling the Playing Field
A skills-based approach ensures hiring decisions are primarily based on what employees are actually capable of — or capable of learning. Altering the approach away from factors like previous education, workplaces, or contacts levels the playing field while widening the talent pool and improving diversity.
Ideally, in the skills economy, employers will only care about their employees’ skills, not how they acquired the skills. Whether employees gained those skills through college, an apprenticeship, or by teaching themselves will no longer seal their fate. That will indeed be the world of equal opportunity.
Thriving in the Skills Economy
The saying, “There will always be work, but there may not always be a job,” was commonly accepted among pre-skills economy workers. But today, this is no longer true.
While the economic landscape is experiencing a transformation, so too are the employees in the job market. The usual tricks are outdated – workers need to learn new ones to remain relevant and agile in this ever-changing environment.
Here are three ways you can thrive in the skills economy:
- Be a proactive learner and sharpen your ability to gain skills you haven’t been formally taught. Being adaptable is your biggest strength in the skills economy.
- Figure out how to apply your skills across various sectors and prepare yourself to work with a diverse set of people. Master capabilities that are transferable across industries.
- Seek opportunities to network and learn from others.
The emergence of the skills economy marks an exciting shift for businesses, employees, and potentially the South African economy. Adaptability is the key to this novel transformation, and the best thing you can do for yourself and your business is to foster agility in the workplace. Learn more about thriving in an ambiguous workplace and identifying skills gaps in business to get started.