What Workday learned by implementing a skills-based talent strategy

“Skills-based” is one of the latest workplace buzzwords to take the HR world by storm.

While most employers haven’t yet fully embraced a skills-based talent strategy, some are further down the road, including Workday. The enterprise management software giant, which ventured into the skills territory with the 2018 launch of its Skills Cloud for clients, shared updates from the last year of its internal skills-based transformation during its annual conference in Las Vegas.

At a session hosted by Josh Tarr, director of Workday’s skills-based organization, and Doug Chartier, principal of Workday’s people and purpose accelerator team, three successful use cases from its strategic skills initiatives were highlighted.

“Over the last year, we think we’ve been able to drive real value from some of these skills initiatives,” Chartier said.

Getting data in order. The first use case was around Workday’s skills data. Chartier’s team reviewed the company’s existing repository of HR data, looked at skills in global markets, and used workplace skills intelligence platform TechWolf to create a skills inventory.

Chartier and Tarr’s team then distilled that data into 20 to 30 skills that it shared with 2,600 people leaders across the company, asking them to rank the skills based on importance. They then consolidated that information into digestible formats so business unit leaders could choose the 10 to 12 skills that they believed were most critical to their organizations. Their team also used AI and machine learning to clearly define each skill so that conversations with people leaders were consistent and improved, each skill highly understood.

It then shared the skills with employees, with a goal of getting 75% of its workforce to list skills on their job profiles within the Workday platform by the end of the year. However, Chartier said at the conference that the company is ahead of schedule, as 85% of its employees (15,000 workers across 300 job types) have critical skills listed on their job profiles.

Opening up mobility. The second use case focused on employee mobility. Based on employee feedback from sources including Peakon, Workday’s employee feedback software, Chartier’s team realized that there was a lack of clarity around the skills employees needed to advance.

His team took skills data and embedded it into its internal talent development platforms and quarterly performance check-ins to ensure alignment between workers, managers, and leaders on the most-needed skills.

The company saw a boost in internal mobility. At least 30% of Workday’s hires between February 2023 and January 2024 were internal candidates, according to its Global Trends Report. And 80% of these internal hires were more likely to be rated as a “top performer” in their first performance check-in in their new role than external hires.

And more than 4,000 employees participated in Workday’s gig work offering, contributing to a 42% increase in mobility, Chartier said.

“Gig roles have a really great role to play for us,” Ashley Goldsmith, Workday’s chief people officer, told HR Brew. “We’ve had thousands of employees take advantage of gigs. The returns from them—they stay with us longer, they get promoted faster, their engagement is higher—just across the board, is good for us.”

Starting small with skills-based hiring. Third, Workday experimented with skills-based hiring in its sales organization, which hires hundreds of account executives annually. While a company can remove recruiting criteria like degree requirements, hiring managers may still use these to make hiring decisions, Tarr said.

“Hiring managers get one, maybe two shots a year to get this right, so no wonder they’re going to rely on things that are more comfortable to them, and we were seeing this too within Workday,” Tarr said. “We were hiring for way too many skills, and doing so inconsistently, and that made drawing a line of sight to quality of hire…really hard.”

Tarr’s team and the sales team refined its interview process, creating standardized interview questions based on 10 critical skills. In the last 12 months, 500 account executives were hired under this strategy. Workday’s sales organization saw a 32% reduction in time-to-hire, an 11% increase in offer acceptances, and a 51% increase in candidate net promoter scores. Based on this success, Workday is rolling out skills-based hiring across the entire company in October.

Key takeaways. Overall, the biggest takeaway from Workday’s last year of skills-based transformation was thinking of the initiative as an enterprise-wide effort, not something just housed in HR, Goldsmith said.

She also noted the importance of thinking big, but starting small, referencing the use case with piloting skills-based hiring for Workday’s sales team. Workday settled on a pilot for a few reasons, she explained. First, because the organization hires at a high volume, making a reduced time-to-hire critical, and second, because the leader of the sales department was interested in participating, securing for HR the executive buy-in that is critical to success.

“If you really have strong alignment from the executive team, that this is something we should do as a company, then you can really gain great momentum,” Goldsmith said.