Focusing On Skills Isn't An HR Strategy. It's A Business One.
Skills-based strategies are the future, but getting there can be complex. Hear from Josh Tarr, Director, Skills-Based Organization at Workday, about why and how the leading tech company has made the shift.
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Skills-based models are gaining traction across industries—and for good reason. Workday's recent State of Skills report shows that 81% of global leaders say skills-based strategies drive growth. Over half of organizations have already begun making the shift, and another 23% say they plan to start within the next year. A growing number of employers are recognizing that the skills-based approach is no longer a theoretical response to questions about the future of work—it's an outcomes-centered business strategy.
For many leaders, the next question is how to translate that strategy into practice. At Workday, we made a deliberate shift three years ago to become a skills-based organization, and treated that change as an organizational transformation—designed and executed like any major business strategy. By reframing the conversation from 'why skills?' to 'what problems can skills help us solve?' we were able to focus on outcomes like improved mobility, retention, and time-to-hire—moving faster, gaining traction, and delivering measurable results.
Unlocking Potential: The Power of Skills at Workday
Three years in, we now have a clear view of the skills across our organization. We used AI, manager feedback, and executive approval to identify the top 10-12 critical skills for jobs at Workday and leveraged Workday Skills Cloud—Workday's AI-driven skills ontology—to understand the skills of our entire workforce. Our teams are using that same data to hire faster, develop smarter, and plan ahead with more confidence: 100% of jobs are mapped to job-critical skills, and 90% of employee profiles have verified, updated skills.
One powerful example of this transformation is our internal gig program—short-term opportunities employees can participate in to grow their skills and build connections. Through Career Hub, employees access AI-enabled personalized learning content, mentors, gigs, and job opportunities. The engagement speaks for itself: over two-thirds of employees have found new opportunities through Career Hub, and more than 5,000 have participated in a gig. The impact is clear—our gig program has led to a 42% higher internal transfer rate and a 33% decrease in attrition among participating employees. The gig program isn't just a perk—it's a proof point.
This skills mapping approach also informed our broader skills-based hiring practice, which began with a pilot in our Sales organization and has since scaled across all open roles at Workday. By identifying the job-critical skills necessary for each role – such as business acumen and account planning for sales roles – and using them to guide our recruiting and interviewing process, we've driven greater consistency and precision in how we evaluate talent. As part of this effort, we standardized our interview stages and launched a required skills-based hiring certification in Workday Learning for all interviewers. We use the job-critical skills to drive consistency and precision in our hiring process, which over the last 6 months has led to a 15% decrease in time to fill and an 8% increase in offer acceptance across almost 900 hires.
How did we get here? Four core elements made the difference:
1. A shift in mindset.
We moved from 'skills are important' to 'what can skills help us solve?' That framing helped us connect the work to real use cases across the business. We approached our skills-based transformation with a product management mindset—testing, learning, and iterating quickly. We launched pilots to find what worked. We scaled the successful efforts and stopped what didn't. That progress-over-perfection approach helped us move faster and build buy-in.
2. High-quality data.
To act on skills, we had to first define them. We leveraged AI to curate high-quality, relevant skills, and then managers and senior leaders confirmed and selected the 10–12 critical skills for the jobs on their teams. This data now powers our people strategy and is used in hiring, internal mobility, and upskilling. Reliable data is what allows managers and employees to make informed, smart, timely decisions with confidence. It is the foundation of any robust skills-based strategy.
3. Cross-functional leadership.
In 2022, we created a governance group that included leaders from Product, Engineering, Tech, Sales, CX, and People & Purpose (HR). That structure allowed us to connect our skills work to core business priorities, not just HR goals. It also helped us decide how to sequence our initiatives, who needed to be at the table, and how to resource the work. Broad ownership helped drive adoption, clarity, and accountability.
4. AI as both catalyst and engine.
Skills data gives us a foundation — but AI is the accelerator that makes that skills data actionable. Workday's Skills Cloud, powered by AI, enables us to align skills with business goals, promote internal mobility, and support upskilling initiatives to close skills gaps and improve employee engagement.
Our experience – and that of many others – shows that skills-based hiring isn't just a compelling idea: when implemented thoughtfully and strategically, it's a proven driver of business performance. Becoming a skills-based organization doesn't happen overnight, but for many employers it's well within reach. The companies leading the way aren't waiting for perfect conditions—they're aligning with business goals, investing in better data, and building as they go. The time for skills is now. Start small, learn fast, and build momentum, because in the age of AI, a skills-based strategy isn't a 'nice-to-have'; it's a competitive advantage.
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