Talent Shortage Concerns Drive Shift to Skills-Based Strategies, Workday Research Finds

Rhea-AI Summary

Workday (NASDAQ: WDAY) released 'The Global State of Skills' report revealing critical talent challenges facing businesses. The study shows that 51% of business leaders worry about future talent shortages, while only 32% are confident in their organization's skills for long-term success.

The research highlights a significant shift toward skills-based talent strategies, with 55% of organizations already transitioning to this model and 23% planning to start this year. 81% of leaders acknowledge these strategies drive economic growth through improved productivity and organizational agility.

Key findings show AI's dual role as both a catalyst and enabler of this transition, with 52% of leaders noting its impact on streamlining tasks and enhancing decision-making. However, human skills remain crucial, with communication, teamwork, resilience, and creativity identified as critical skill gaps. Major adoption challenges include reskilling time (43%), change resistance (38%), and infrastructure limitations (28%).

Positive

• 81% of leaders confirm skills-based approach improves productivity and innovation
• 78% adoption rate (55% current + 23% planned) for skills-based talent model
• AI integration enhancing operational efficiency and decision-making
• Strong market positioning in AI-driven talent management solutions

Negative

• 68% of organizations lack confidence in their long-term skills readiness
• 46% of organizations lack visibility into current workforce skills
• 43% face significant time constraints in reskilling employees
• 28% lack proper infrastructure for skills-based management

Leaders Turn to Skills-Based Talent Strategies to Navigate Uncertainty and Boost Productivity in the Age of AI

PLEASANTON, Calif., March 5, 2025 /PRNewswire/ -- Workday, Inc. (NASDAQ: WDAY), the AI platform for managing people and money, today released "The Global State of Skills", revealing a pressing challenge for businesses worldwide: More than half (51%) of business leaders are worried about future talent shortages, and only 32% are confident their organization has the skills needed for long-term success.

As AI transforms industries, the skills required to thrive in the workforce are evolving fast. However, many organizations lack visibility into the existing capabilities of their people – only 54% of leaders say they have a clear view of the skills within their workforce today.

This growing uncertainty is exposing the limitations of traditional talent management approaches that focus on job titles, degrees, and previous companies worked for. In response, organizations are accelerating a shift to skills-based talent strategies, which prioritize an individual's capabilities over traditional credentials and provide a more agile, data-driven approach to hiring, developing, and deploying talent.

Key Findings:

• Skills-based strategies are no longer a "future of work" concept – they're a competitive advantage. 81% of leaders agree that adopting a skills-based approach drives economic growth by improving productivity, innovation, and organizational agility.
• The movement is already underway. More than half (55%) of organizations worldwide have begun the transition to a skills-based talent model, with an additional 23% planning to start this year.
• Beyond business impact, skills-based strategies can help close opportunity gaps. Leaders cite increased access to job opportunities for employees (82%), higher workforce equity (72%), and lower unemployment (61%) as key benefits.

AI Boosts the Shift to Skills-Based Talent Management
AI is both a catalyst for and an enabler of this shift. While the rise of AI is transforming jobs, it is also helping organizations build more agile, skills-driven workforces. According to the research, AI is playing a pivotal role in the transition by:

• Streamlining routine and repetitive tasks (52% of leaders agree)
• Enhancing decision making with data-driven insights (52% of leaders agree)
• Personalizing learning and development programs (47% of leaders agree)
• Predicting future skills needs (45% of leaders agree)

"At Ferring, we are committed to a culture of continuous learning where employees can connect with new skills, opportunities and projects that align with their ambitions," said Lynn Van Oossanen, Global Head of People Solutions, Ferring Pharmaceuticals. "With AI-powered technology, we can now identify skills gaps in real-time, enabling employees to seek out growth opportunities while helping managers connect with the right talent more effectively."

AI is Accelerating, but Human Skills Remain Irreplaceable
While technical skill sets are in high demand, today's research highlights an equally critical need for uniquely human skill sets. Social skills like communication and teamwork, and individual skills like resilience and creativity are listed as the most impactful skill gaps in organizations today, followed by digital fluency, including AI and software proficiency.

This aligns with findings from Workday's "Elevating Human Potential: The AI Skills Revolution" report, which found that relationship-building, empathy, conflict resolution, and ethical decision making are critical for success in an AI-driven economy.

"AI is reshaping the workplace, but the human element has never been more essential," said Chris Ernst, Chief Learning Officer, Workday. "Organizations that embrace a skills-first mindset will not only unlock AI's potential but also harness human ingenuity in new and transformative ways."

Challenges to Adoption – and the Path Forward
Despite the momentum behind skills-based strategies, business leaders cite several key challenges:

• The time required to reskill employees (43%)
• Resistance to change (38%)
• Lack of infrastructure to support skills-based talent management (28%)
• Inadequate skills measurement tools (28%)

Technology alone isn't the solution, the research finds. Overcoming these challenges requires a shift in mindset – one that includes clear communication of the benefits (48%) and effective change management (48%) to drive adoption across organizations.

The Future of Talent is Skills-First
For years, skills-based talent strategies were seen as an aspiration. Today, thanks to AI and data-driven insights, they are a business imperative. Workday believes organizations that embrace this shift will not only outmaneuver the competition but also future-proof their workforce in an era of rapid transformation. As the relationship between AI and human talent deepens, the skills movement will only accelerate, creating a smarter, more resilient, and more inclusive world of work.

For Additional Information:

• Download "The Global State of Skills"
• Learn about Workday's journey to becoming a skills-based organization
• Download "Elevating Human Potential: The AI Skills Revolution"

About the Report
These findings are based on a global study of 2,300 business leaders in director positions or above from organizations employing at least 100 people worldwide. The survey was administered by Hanover Research on behalf of Workday in November 2024. All respondents were employed full time across the following regions: North America, EMEA, and Asia Pacific and Japan. Workday leaders and employees were not included in the survey set.

About Workday
Workday is the AI platform that helps organizations manage their most important assets – their people and money. The Workday platform is built with AI at the core to help customers elevate people, supercharge work, and move their business forever forward. Workday is used by more than 11,000 organizations around the world and across industries – from medium-sized businesses to more than 60% of the Fortune 500. For more information about Workday, visit workday.com.

© 2025 Workday, Inc. All rights reserved. Workday and the Workday logo are registered trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.

Forward-looking Statement
This press release contains forward-looking statements including, among other things, statements regarding Workday's leadership, innovation, transformation, and potential. These forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control. If the risks materialize, assumptions prove incorrect, or we experience unexpected changes in circumstances, actual results could differ materially from the results implied by these forward-looking statements, and therefore you should not rely on any forward-looking statements. Risks include, but are not limited to, risks described in our filings with the Securities and Exchange Commission ("SEC"), including our most recent report on Form 10-Q or Form 10-K and other reports that we have filed and will file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by law.

Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday's discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.

 

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SOURCE Workday Inc.

FAQ

What percentage of organizations are transitioning to skills-based talent models according to Workday's research?

55% of organizations have already begun the transition, with an additional 23% planning to start in 2025.

How many business leaders are concerned about future talent shortages according to WDAY's report?

51% of business leaders express concerns about future talent shortages.

What are the main challenges in implementing skills-based strategies according to Workday's study?

Key challenges include time required for reskilling (43%), resistance to change (38%), lack of infrastructure (28%), and inadequate skills measurement tools (28%).

How is AI contributing to skills-based talent management according to WDAY's research?

AI contributes by streamlining routine tasks (52%), enhancing decision-making (52%), personalizing learning programs (47%), and predicting future skills needs (45%).

What percentage of organizations have clear visibility into their workforce's current skills according to Workday's report?

54% of leaders say they have a clear view of the skills within their workforce.