How skills data is reshaping workforce strategies: Insights from Sandra Loughlin

The workplace is evolving rapidly, and traditional job structures are no longer enough to keep up with business demands. Companies are shifting towards skill-based organizations—where skills, rather than job titles, determine career paths, hiring decisions, and workforce planning. 

But how do we transition from traditional talent management to a skills-first approach? And what does it take to make this shift work in practice?

We spoke with Sandra Loughlin, PhD, Chief Learning Scientist at EPAM Systems, to explore how organizations can successfully implement skill-based strategies, the role of learning and development in this transformation, and why this shift is critical for future-proofing businesses.

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Many companies aspire to become skills-based organizations, but what does that truly mean in practice? 

A skills-based organization is fundamentally about leveraging data—on both people and work—to make informed decisions across the talent lifecycle. This means hiring based on verified skills rather than degrees or job titles. Once employees are in the company, skills data is used to match them to work—whether that means placing them in the right role, shifting their responsibilities, or engaging them in gig work or projects. The goal is to continuously align talent with business needs, benefiting both employees and the organization.

Skills data is also crucial for strategic workforce planning. Instead of focusing on headcount, companies take a skills- and task-based approach to determine future needs and optimize existing resources. Perhaps most importantly, skills data is used to manage performance—evaluating employees based on demonstrated, verified capabilities. This fosters continuous learning, a necessity for agility and long-term business success.

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What are the most common misconceptions about skills-based organizations?

Several misconceptions exist, some stemming from early misinterpretations of the concept. 

• One is the belief that skills-based organizations are purely an HR initiative. In reality, they are a strategic approach to optimizing talent in alignment with business goals. Simply improving talent acquisition doesn’t drive significant business impact; skills-based organizations must be integrated across the entire business strategy.
• Another misconception is that technology alone can solve the challenge. Many assume that purchasing the right tools will automatically transform an organization into a skills-based one—but without the right strategy and implementation, technology alone won’t deliver results.
• Additionally, many discussions focus solely on skills while overlooking the work itself. Skills must be paired with an understanding of tasks and responsibilities to be truly effective.
• Early narratives also incorrectly suggested that a skills-based future meant eliminating traditional job structures, which caused unnecessary resistance.
• A final misconception is failing to connect skills to broader business transformations, particularly AI adoption. As AI automates aspects of work, organizations must rethink workforce planning—reskilling employees, redefining roles, and identifying new work opportunities. Leaders must view skills as a core tactic for business transformation, not just an HR function.

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What are the essential skills that every organization must cultivate to remain competitive and resilient in the face of constant change?

The most critical skill is the ability to learn effectively. Many people mistake memorization for learning, but true learning involves critical thinking—questioning sources, identifying gaps, recognizing patterns, and making connections between concepts. Organizations must foster a culture where employees continuously build and refine their learning capabilities to stay adaptable in a rapidly changing landscape.

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What strategies should companies adopt to accurately identify skill gaps within their workforce?

The biggest challenge is obtaining verified, high-quality skills data. Most companies rely on self-reported skills or manager assessments—both unreliable. The long-term goal should be to build an infrastructure that infers skills from multiple validated sources, such as AI-driven analysis of work history, project experience, learning platforms, and assessments.

Validation methods should include expert reviews, AI-based work analysis, and meaningful certification exams. Increasingly, companies will use real-world scenario testing, where AI evaluates an employee’s ability to perform tasks in authentic work environments. Investing in skills validation at scale is challenging but essential for making data-driven workforce decisions.

Once high-quality data is in place, companies can more effectively support upskilling by identifying gaps between current and required skills. This enables personalized career pathing, where employees with a strong skills foundation in one area can be strategically developed for new roles. Without verified data, organizations risk making poor decisions based on incomplete or inaccurate information.

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How is AI transforming the role of L&D professionals? 

Historically, L&D has focused on providing access to training programs. AI will automate much of this content delivery, shifting the function’s focus. If AI reduces the time spent on traditional training to just a fraction of what it was, the question becomes: What should L&D focus on instead?

The future of L&D lies in facilitating real learning—beyond training sessions—by fostering social interactions, mentorship, experiential learning, and reflective practices. AI will also play a crucial role in assessing learning outcomes rather than just content completion. The challenge will be ensuring that L&D evolves from a training provider to an architect of comprehensive learning environments within organizations.

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If you could make one bold prediction about the future of L&D, what would it be?

L&D will become one of the most critical functions in an organization. In a world where AI accelerates business change, companies that succeed will be those where employees learn rapidly and effectively. This means L&D will be held to a much higher standard—not just managing training but engineering environments where employees know what they need to learn, are motivated to learn it, and are supported in doing so. The companies that get this right will have a significant competitive advantage in the future of work.

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Building a future-ready workforce: Why skills must take center stage

As organizations navigate rapid change, skill-based strategies are no longer optional—they're essential. By prioritizing skills over titles, businesses can adapt faster, retain top talent, and build future-ready workforces. The move toward a skill-based organization is not just a trend—it’s a necessary evolution in how companies manage talent. By prioritizing skills over rigid roles, businesses can build a more agile, dynamic, and future-ready workforce. The question isn’t if companies should embrace a skills-first model—it’s how fast they can make the shift.