Davos is a quiet Alpine ski-village surrounded by majestic peaks and fed by the crystal clearLandwasser river about a two-hour drive from Zurich. However, this idyllic township rapidly transforms into the commerce capital of the world when the World Economic Forum makes it its home for a week.
The World Economic Forum’s annual meeting in Davos is the preeminent gathering of geopolitical and business leaders to address the world’s most pressing challenges. From a business side, the clear themes at Davos this year were trade, tariffs, skilling and, of course, AI. These themes got an extra boost by the US presidential inauguration in the same week and President Trump’s virtual address to all the World Economic Forum leaders. While the timing was serendipitous, it ended up defining the agenda for many conversations and alliances made during the event.
One moment that stood out to me personally was having lunch with the CFO, CIO, and CHRO of one of the world’s largest banks—an institution supporting more than 200,000 employees. The conversation quickly made one thing clear: skills are not just a challenge for learning teams; they are a fundamental business issue being actively strategized at the board and C-suite level. Every business unit is grappling with how to grow and scale its talent, whether through internal mobility, reskilling, or hiring. There is a growing recognition that sustained growth isn’t just about acquiring new talent—it’s about optimizing the workforce, ensuring that skills are fluid across functions, and that roles can evolve to meet the needs of the business.
The week in Davos reinforced to many that in the future of work, organizations need to win on a global stage amidst increasingly national and regional changes. In this new world order, influence and power take on new meaning – and the measure of this power, believe it or not, will not just be monetary. Instead, the source of power is talent – fueled by the ability to skill, reskill, and upskill employees to excel in this new paradigm.
The best way to quantify this power is to evaluate the acquisition of skills. The new US administration’s focus on “merit-based” or MEI: Merit, Excellence and Intelligence systems, is a directive for federal agencies to adopt skills-based approaches. This isn’t a new concept; as Heads of State have long been looking at government-led skills programs as key solutions to their region's skill shortages, improving unemployment rates and boosting their local economies. Look no further than Skills England, or Singapore SkillsFuture, or organizations such as Abdulla Al Ghurair Foundation (AGF) that launched a skill-based upskilling and job matching program aimed at connecting Emirati and Arab youth with career pathways and employment opportunities.
Whether companies are navigating government restructuring, managing a migrant workforce, or focusing on locally manufactured goods in the face of tariffs, the pace and efficacy of skilling programs will ultimately determine organizational survival.
So, how do you approach architecting a merit-based, skills-based people strategy?
There are three fundamental questions organizations must answer to design a skill-based people strategy:
1. What skills do we need to drive our business strategy and competitive advantage?
Review your business strategy, assess challenges, opportunities, and threats, and analyze the competitive landscape to understand what your leaders and people need to be able ‘to do’ (skills) to solve these problems and drive growth.
2. What skills do we currently have in our workforce compared to the broader labor market?
Start with measurement; create employee skill profiles with the assistance of AI alongside skills focused performance conversations. Validate and measure skills through peer and management assessments, creating skills-based credentials alongside existing organizational performance metrics. Benchmark against the overall skills supply and demand of the labor market, helping identify emerging gaps.
3. What are the best ways to close identified skill gaps (e.g., recruitment, development, mobility, etc.)?
Leveraging this data, evaluate your build, buy, borrow strategy against these skills. Assess which skills are readily available on the open market and can be acquired through recruitment. Determine which skills need to be developed internally within the specific context of your organization through training and development programs. Identify existing skills within your organization that can be re-deployed to more business-critical areas.
For instance, at Davos, I heard from Legislators and CEOs that the proliferation of AI’s advancement may meet the needs for technology skills gaps, but there is still a gap in open-minded, agile, strategic leaders who can best apply technology’s rapid advancement to address business, solution or consulting needs. This is not surprising, considering our research into job demand found that human skills, or soft skills, such as leadership, communication, and emotional intelligence, consistently exceeds the need for digital skills – globally by 2X more in demand than digital skills. Knowing what you need to target allows you to hone into solving this issue, upskilling your workforce and creating the necessary embedded culture change towards a merit-based approach.
While skills-strategies have been discussed for many years now, organizations have delayed their move in this direction because it's easy to become quickly overwhelmed in thinking they must have every question answered, every process re-designed, and all technology integrated to become skills based. To start, identify the skills use case that best supports your business whether it is a cross-functional pain point, department, or line of business specific. As skills become embedded in the new way of working, you can continue expanding your use cases.
If skills are the key to succeed, or one of the “new” currencies of global businesses, then in the last few weeks following Davos and the Trump Administration’s early executive orders, this currency suddenly went up in value. The time to wait for a skills-centric approach is over.
Our whitepaper, "Building a More Agile Workforce," provides practical strategies to embed learning, leverage technology, and embrace skills-based planning to stay ahead of disruption. Learn more.
