Skills and AI: The Symbiotic Relationship Driving the Future of Work

In this article we discuss:

• The Accelerating Momentum of Skills Transformations 
• Lessons From Navigating the Challenges
• The Interdependent Relationship Between AI and Skills
• Preparing Organizations for AI Readiness
• Empowering Humans in the AI Era

You can listen to this episode as audio only on Spotify and Apple Podcasts.

In the HR world, skills are all the rage—and for good reason. Organizations are embracing the benefits of artificial intelligence, but success truly hinges on one factor: how quickly their people can adapt to new skills. 

This is prompting businesses to reevaluate their talent strategy from the ground up.

This was the central theme of a recent Future of Work podcast episode featuring our own Director of Skills-Based Organization Josh Tarr, and Chief Learning Officer (CLO) Chris Ernst. 

Their discussion offered insights into Workday’s own journey to becoming a skills-based organization, echoing a powerful truth from Ernst: “Thriving people lead to thriving businesses. And what makes both of those things possible is skills. Dynamic skills are what business needs to remain agile and what workers want to stay relevant and to grow their careers.” Let’s dive into their conversation.

The Accelerating Momentum of Skills Transformations

Our State of Skills Report reveals a significant shift: 55% of leaders are already implementing skills-based strategies, with another 23% planning to do so within the next 12 months. This rapid acceleration begs the question: what's fueling this momentum? It’s no suprise—AI.

Business expectations are increasing as quickly as AI is advancing. For HR professionals, this momentum presents a compelling justification for investment. The strategic shift toward skills is not just a trend but a ground-level recalibration of how organizations identify, nurture, and deploy talent to achieve business objectives. This is critical for success—especially when considering how quickly business objectives are shifting.

Ernst shed some light on Workday's own internal skills transformation, offering evidence of the tangible benefits organizations can realize:

Faster hiring: By implementing an end-to-end skills-based hiring methodology, Workday saw a 15% reduction in time-to-hire and an 8% increase in acceptance rates for nearly 900 new Workday employees. 

• This directly addresses one of HR's most persistent challenges: efficient talent acquisition.

Increased internal mobility: Utilizing Workday Illuminate to match employees to short-term projects (known internally at Workday as “gigs”) resulted in a 42% increase in internal mobility for participating Workday employees. 

• This not only helped retain high performing talent but also fosters a dynamic, adaptable workforce that isn’t siloed to their resume.

Decreased L&D costs: An enterprise-wide effort to align learning and development (L&D) investments with critical skills on job profiles led to a remarkable 95% decrease in L&D spend. 

• Through more precise targeting, a skills-based approach helped optimize spend and ensure training is actually tied to business needs.

These results are powerful proof-points for any HR leader seeking to build a business case for skills transformation. Demonstrating clear ROI across talent acquisition, internal mobility programs, and talent development efforts helps to create buy-in for a shift in talent strategies that directly impact the bottomline. 

Lessons From Navigating Skills Challenges

The path to skills transformation is not without its hurdles. If you’ve ever heard the term “building the car as we’re driving it,” you get the gist of how most HR teams feel about AI right now. 

Both Ernst and Tarr candidly addressed the challenges Workday faced with these three key lessons:

• Creating an aligned organizational vision: A skills strategy must extend beyond HR and L&D to engage the entire organization in understanding the value skills play as an organizational capability.
• Investing in high-quality skills data: As Ernst emphasized, "Data is everything." Accurate skills data is essential for driving good results. 
• Prioritizing progress over perfection: The ability to run pilots, collect data, iterate, and continuously improve is crucial. Ernst advised, "nothing helps build momentum around your skills-based efforts more than early wins."

In order to capture some early wins, Tarr recommends focusing on solving specific business problems for people who are just starting. He noted that the greatest successes came when leaders "keyed in on a specific problem that is important for the business." 

However, he did caution that, "getting caught up in the infrastructure work that goes into building a skills-based organization often led to a loss of momentum.” This serves as a vital reminder for HR professionals to ground their skills initiatives in tangible, real-time business needs to easily articulate the value of the shift clearly—and quickly—to stakeholders.

The Interdependent Relationship Between AI and Skills

When describing the relationship between AI and skills, Ernst drew on a symbiosis, stating "skills are now the currency of work. And what skills and tasks enable an organization to do is take the world of work... and organize it in a way that AI can understand and interpret." 

In turn, AI can map skills relationships and direct employees to opportunities. "Skills and AI need each other," Ernst affirmed. "They're opening up types of employee experiences that were unimaginable just a few years ago and we're just getting started."

Ernst emphasized this notion when explaining "the real opportunity for AI is to elevate humans to do what we do best, to be able to create environments where teams can problem solve in new ways and innovate in new spaces...to lead differently, to collaborate differently, to create amazing things together." 

Workday's research supports this, finding that 93% of participants said AI is already enabling them to focus on higher-order, more strategic responsibilities. This reframing is crucial for HR professionals to communicate; AI is not just about efficiency, but about unlocking higher-value work and fostering human ingenuity.

This powerful relationship means that HR's investment in defining and tracking skills directly fuels the capabilities of AI in the workplace, enabling more intelligent talent management, learning, and organizational planning.

Enhancing Individual Skills With AI

For individual employees, the advice is clear: embrace AI as a "knowledgeable, helpful companion." Ernst encourages listeners to leverage AI to become even better at what they do. 

Tarr shared a compelling personal example, where he leverages AI to get feedback on a proposal from the perspective of various executive roles, simulating diverse viewpoints before a critical meeting. 

This illustrates how AI can accelerate personal and professional development by providing on-demand, targeted insights.

While AI is the engine, humans are still in the driver’s seat. Key human skills that are vital to the future of work include:

• Social skills: Teamwork, problem-solving.

• Individual skills: Adaptability, creativity.

• Digital skills: Digital literacy, proficiency with AI tools.

• Interpersonal skills: Ethical decision-making and moral judgment, emotional intelligence and empathy, relationship building, and conflict resolution.

This emphasizes that while AI handles repetitive or data-intensive tasks, it elevates the importance of uniquely human capabilities. For HR, this means prioritizing development programs that cultivate these essential human skills, positioning employees as the ultimate differentiators in an AI-propelled, human-driven world.

Preparing Organizations for AI Readiness

For C-suite executives, the conversation has moved beyond simply adopting AI. It's now about truly preparing your workforce to embrace and enable these powerful technologies. 

Workday's largest L&D effort to date, EverydayAI, aims to equip all 20,000 employees with the skills, habits, and mindset to effectively use AI daily. Our ambitious goal is a 20% increase in AI tool adoption month-over-month, leading to increased productivity and innovation.

Ernst offered several key recommendations for organizations to increase their AI readiness:

• Be clear on the problem to solve: Resist the urge to adopt AI tools without first understanding the specific business problems they will address.

• Attach HR and technology teams at the hip: AI enablement requires a deep partnership between these two functions. Our EverydayAI initiative at Workday is a testament to this, with our CIO and CLO co-leading the charge. 

• Put your people in the spotlight: Showcase real employee use cases, stories, and examples. Peer-to-peer learning is a powerful driver of adoption.

• Get everyone in the game: AI technologies are not exclusive. Organizations should encourage all employees to set goals for integrating AI into their work.

These recommendations provide a practical roadmap for HR leaders to drive successful AI adoption and upskilling initiatives within their organizations. 

Empowering Humans in the AI Era

Ernst left listeners with a clear, powerful call to action: be open to continuous learning. He emphasized that in this era of AI, "it's less about what you know and it's more about how you learn, adapt, and continually grow."

In essence, it’s the journey that matters. This is the core empowerment message for individuals and a guiding principle for HR strategy. The future of work is not about mastering a static set of skills, but about cultivating the agility to continuously acquire new ones.

The synergy of skills and AI isn't just driving technology forward; it's fundamentally redefining the human element of work. For HR professionals, this moment offers an unparalleled opportunity to truly take the wheel. By fostering agile, skilled, and human-centric workforces, you're not just preparing for the future—you're actively shaping it.

Feeling the strain of rapid market changes on your talent strategy? Develop a plan to define goals, evaluate possible vendors, and unlock workforce potential with the right skills technology in this Workday Buyer's Guide.