Leading Companies Use Skills as the New Currency for Workforce Transformation

 

  • Over 40% of HK companies embarking on transformation are targeting workforce upskilling/reskilling towards critical talent pools1
  • 41% of HK organizations surveyed by Mercer have already made it easier to loan and/or share talent internally, with 39% planning to do so in the future
  • Mercer launches its Skills-Edge Suite, an integrated service offering of consulting, technology and data to help companies advance skills-based talent management

Hong Kong, June 1, 2021 – Skills have become the new currency of workforce and talent strategies, as more than half of organizations that responded to the 2021 Mercer Global Talent Trends survey are targeting upskilling and reskilling of critical talent pools to drive workforce transformation.2 In response, Mercer has launched its Skills-Edge Suite, an integrated service offering of consulting, technology and data that helps companies advance skills-based talent and pay practices.

 

For most organizations, from COVID-19 to technological advances, the nature of work has experienced seismic disruptions as we have become more interdependent, knowledge-focused, specialized and flexible about where, when and how we work. Traditionally, the base unit of managing a workforce has been a job. Job descriptions and titles have, until recently, defined how companies viewed work, how they set salaries, and how they made critical decisions around talent and workforce transformation. Today, the base unit of work has fundamentally evolved from jobs to skills.

 

Brian Sy, Head of Career Products and Total Rewards, Hong Kong, Mercer said, “Reskilling and upskilling are a clear transformation priority for companies in Hong Kong in 2021, on the back of rapid technological advances and the new roles they bring. However, they may lack clarity on the existing skills in their workforce and future skill requirements. This clarity is fundamental for them to decide how best to invest resources their already stretched resources for targeted reskilling and upskilling.

 

“Companies in Hong Kong are also struggling to identify the required future skills for different roles and for their organisations. In the same vein, they face challenges in evaluating the right pay for the right skills in an objective manner, similar to salary benchmarking.

 

Mercer Skills-Edge Suite will help organisations adapt to the new shape of work through a skills-based workforce strategy. The offering helps to create skills frameworks and roadmaps to help companies transition from job-based practices to skills-based talent and pay practices.

 

A skills-based approach to workforce strategy assesses talent based on their holistic skill set (including adjacent skills across industries), rather than industry experience or qualifications. A well-designed skills-based workforce strategy will enable organisations to proactively identify future skills needs and develop an actionable plan to retain, build, buy and deploy talent, as needed.

 

According to Mercer’s 2021 Global Talent Trends survey, there has been an increase in talent practices that have enabled organisations to use their talent pool more flexibly. To better adapt to evolving business needs, 41% of survey respondents in Hong Kong stated they have already made it easier to loan and/or share talent internally, with 39% to do so in the future.

 

The Global Talent Trends survey also revealed that companies in Hong Kong are lagging when it comes to meeting the inter-generational needs of their workforce, such as offering older, more experienced workers flexible career pathways. None of the Hong Kong companies currently use or plan to look into investing in analytics to predict when older workers with critical skills are likely to retire. Organisations are also struggling to understand the skill gaps in their current workforce. Two in five HR professionals responding to the survey admitted that they do not know what skills they have in their own organizations.

 

Vicki Fan, CEO, Hong Kong, Mercer said, “Skills-based talent practices, particularly pay-for-skills, are a relatively new concept to companies Hong Kong. While organisations recognise the importance of skills in enabling more cross-functional work and fostering agility, legacy structures and lack  of tools and capabilities are key barriers to transforming work.

 

“The future of work will see skills become core – increasing in importance over traditional measures such as years of experience or titles - in determining compensation and career opportunities for employees. Now is the time for businesses to get better at identifying, assessing and creating formal ways of establishing skill-based pay, and Mercer is excited to partner with our clients on the journey.”

 

1Mercer’s Global Talent Trends survey, 2021, reflecting 50% of survey respondents

2Mercer’s Global Talent Trends survey, 2021

 

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About Mercer Skills-Edge Suite

 

The Mercer Skills-Edge Suite creates skills frameworks and skills roadmaps to help companies to transition from job-based practices to skills-based talent and pay practices; and the support to operationalize and integrate companies’ skills philosophy into their HR systems through deployment and optimization services. Some of the new products include:

 

  • Skills Library: A skills taxonomy based on market data curated by Mercer and mapped to the Mercer Job Library. With this first step, organisations learn what skills they should focus on to support their business strategy.
  • Skills Pricer: A self-service web application that shows which skills are influencing the pay of a selected job. Determining the skills that are most valuable to them helps organisations attract and retain in-demand talent.
  • Skills Pay Planner: An AI-driven tool designed to arm organisations with intelligent pay recommendations for individual employees. Understanding the premiums associated with certain skills helps organisations make informed compensation decisions.

 

About Mercer

 

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s more than 25,000 employees are based in 44 countries and the firm operates in over 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 76,000 colleagues and annual revenue of over $17 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.

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