Developing skills and managing talent in the productivity debate


Enterprises, governments and individuals all invest significantly in education and training. However, developing skills is only part of the story. Ironically, at a time when skills shortages are headline news, many employees believe they are over-skilled for the job they do.

In a small-scale study published in 2009, 42 per cent of Australian workers reported that they felt their skills were moderately or severely under utilised. Many employers agree. Another study, from last year, found 37.1 per cent of employers viewed the skill level of their employees as above what is required for the job at hand. How skills are used in the workplace is critical to maximising the investment for all participants.

Organisations of any size or sector can lift productivity by better utilising employees’ full range of capabilities. Skills utilisation is about how well employers harness and develop their workers’ abilities and talents to gain maximum value. This is often triggered by tight labour markets and the need to attract and retain employees when faced with strong competition for skills and labour.

Skills Australia’s Better use of skills, better outcomes: Australian case studies showcases 11 organisations tailor-made initiatives to benefit both the business and employees themselves. This qualitative research has identified links between strategies to maximise the skills of workers and benefits to employers. By adopting effective practices, organisations can lift profitability, improve staff retention, and deliver better job satisfaction and rewards for employees who show personal initiative. Our research has found that when an employee feels their skills are being used and their talent nurtured it pays dividends in innovation, business efficiency and productivity.

The value of employees 

Designing work to maximise the value of employee skills and experience can make workplaces capable of generating innovative business processes and ultimately enhance competitive advantage. This requires organisations to have cultures that espouse open communication, have effective HR practices in place and supportive leadership. With this culture employees are more likely to be satisfied at work and motivated to perform at their best. As a result staff in the case studies felt valued, had access to career paths and were more likely to stay with their employer.

The enterprises featured in our case studies come from a wide range of industries including resources, health, construction and finance. They range from oil and gas exploration and production company Woodside to RSPCA Victoria.

Skills utilisation benefits employers by directly affecting businesses’ bottom line. Of the showcased organisations, all reported improved productivity and/or profits and reduced operating costs or better retention. Small employers benefited from their ability to be flexible, adaptable and innovative, while large employers were able to provide employees with a diversity of job roles and experiences.

Enterprises seeking to harness and develop their workers’ abilities should address how work is organised and how their skills are aligned to the needs of the business. One common practice across the organisations is enabling staff to apply their education and training to contribute to the broader business goals. As a result, the organisations benefit by harnessing the knowledge and creativity of those who are often best placed to identify better ways of doing things.

Many of the organisations profiled have developed a supply of skilled staff despite chronic skill shortages in their sector. Woodside runs a skill-pool strategy where staff are developed and rotated to meet the company’s long-term needs. Staff are supported by a skills-pool manager whose remit includes supporting their career path. By developing staff through an internal strategy, Woodside has reduced its need to fill vacancies on the open market.

Other examples of improved business outcomes include significant cost savings due to decreased staff turnover and decreased work-related injuries and lower insurance premiums.

The organisations involved in the research use a multitude of practices to make the most of the skills of their employees. Some have a range of approaches that work as part of an overall package of initiatives. Others focus on one particular approach. Initiatives undertaken across the case study organisations can be summarised into five broad steps:

  • Know the skills and talents you have and may require in the future by conducting a skills audit.
  • Develop existing skills and acquire relevant new skills through training and mentoring.
  • Apply new skills in practical ways.
  • Give employees flexibility and autonomy, and involve them in decision-making.
  • Change the job to suit the range of skills you have in your workforce.

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Developing skills and managing talent in the productivity debate


Enterprises, governments and individuals all invest significantly in education and training. However, developing skills is only part of the story. Ironically, at a time when skills shortages are headline news, many employees believe they are over-skilled for the job they do.

In a small-scale study published in 2009, 42 per cent of Australian workers reported that they felt their skills were moderately or severely under utilised. Many employers agree. Another study, from last year, found 37.1 per cent of employers viewed the skill level of their employees as above what is required for the job at hand. How skills are used in the workplace is critical to maximising the investment for all participants.

Organisations of any size or sector can lift productivity by better utilising employees’ full range of capabilities. Skills utilisation is about how well employers harness and develop their workers’ abilities and talents to gain maximum value. This is often triggered by tight labour markets and the need to attract and retain employees when faced with strong competition for skills and labour.

Skills Australia’s Better use of skills, better outcomes: Australian case studies showcases 11 organisations tailor-made initiatives to benefit both the business and employees themselves. This qualitative research has identified links between strategies to maximise the skills of workers and benefits to employers. By adopting effective practices, organisations can lift profitability, improve staff retention, and deliver better job satisfaction and rewards for employees who show personal initiative. Our research has found that when an employee feels their skills are being used and their talent nurtured it pays dividends in innovation, business efficiency and productivity.

The value of employees 

Designing work to maximise the value of employee skills and experience can make workplaces capable of generating innovative business processes and ultimately enhance competitive advantage. This requires organisations to have cultures that espouse open communication, have effective HR practices in place and supportive leadership. With this culture employees are more likely to be satisfied at work and motivated to perform at their best. As a result staff in the case studies felt valued, had access to career paths and were more likely to stay with their employer.

The enterprises featured in our case studies come from a wide range of industries including resources, health, construction and finance. They range from oil and gas exploration and production company Woodside to RSPCA Victoria.

Skills utilisation benefits employers by directly affecting businesses’ bottom line. Of the showcased organisations, all reported improved productivity and/or profits and reduced operating costs or better retention. Small employers benefited from their ability to be flexible, adaptable and innovative, while large employers were able to provide employees with a diversity of job roles and experiences.

Enterprises seeking to harness and develop their workers’ abilities should address how work is organised and how their skills are aligned to the needs of the business. One common practice across the organisations is enabling staff to apply their education and training to contribute to the broader business goals. As a result, the organisations benefit by harnessing the knowledge and creativity of those who are often best placed to identify better ways of doing things.

Many of the organisations profiled have developed a supply of skilled staff despite chronic skill shortages in their sector. Woodside runs a skill-pool strategy where staff are developed and rotated to meet the company’s long-term needs. Staff are supported by a skills-pool manager whose remit includes supporting their career path. By developing staff through an internal strategy, Woodside has reduced its need to fill vacancies on the open market.

Other examples of improved business outcomes include significant cost savings due to decreased staff turnover and decreased work-related injuries and lower insurance premiums.

The organisations involved in the research use a multitude of practices to make the most of the skills of their employees. Some have a range of approaches that work as part of an overall package of initiatives. Others focus on one particular approach. Initiatives undertaken across the case study organisations can be summarised into five broad steps:

  • Know the skills and talents you have and may require in the future by conducting a skills audit.
  • Develop existing skills and acquire relevant new skills through training and mentoring.
  • Apply new skills in practical ways.
  • Give employees flexibility and autonomy, and involve them in decision-making.
  • Change the job to suit the range of skills you have in your workforce.

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