Over half of Hong Kong organisations shift towards skills-based strategies amidst concerns over future talent shortages

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Organisations are transitioning from traditional talent management methods, instead adopting a more agile, data-driven approach.

More than half (51%) of global business leaders are worried about future talent shortages, and only 32% feel confident that their organisation has the skills needed for long-term success, according to The Global State of Skills by Workday.

This concern is even more pronounced in Hong Kong, where 60% of local business leaders share the same sentiment, and only 28% are confident they possess the necessary skills.

As AI continues to transform various industries, the skills required to thrive in the workforce are evolving fast. As such, organisations are moving away from traditional talent management approaches that focus on job titles, degrees, and previous companies worked for.

Instead, they are now shifting towards skills-based talent strategies, which prioritise individual capabilities and adopt a more agile, data-driven approach to hiring, developing, and deploying talent.

Fortunately, 74% of organisations in Hong Kong said they have high visibility into the existing capabilities of their people, outperforming the global average of only 54%.

A majority (91%) of local leaders agreed that adopting a skills-based approach can drive economic growth by improving productivity, innovation, and organisational agility. Therefore, over half (57%) of Hong Kong organisations have already begun transitioning to a skills-based strategy, with an additional 20% planning to start this year.

Furthermore, 53% of organisations expected improved employee performance and productivity as a result of adopting skills-based strategies.

The adoption of AI also boosts this shift. Two-fifths (42%) of Hong Kong leaders reported that streamlining repetitive tasks is the main benefit of incorporating AI into a skills-based hiring strategy.

"AI is undoubtedly transforming the workplace, but it’s not replacing the need for uniquely human skills – it’s amplifying them,” said Daniel Cham, General Manager for Workday Greater China.

While technical skill sets are in high demand, the research highlighted an equally critical need for uniquely human skill sets, including social skills like communication and teamwork, as well as individual skills such as resilience and creativity. From a Hong Kong perspective, social skills are prioritised over individual skills.

In the process of adopting skills-based strategies, Hong Kong business leaders have identified several challenges:

• the time required to reskill employees (38%)
• challenges in aligning skills strategy with business objectives (33%)
• connecting and consolidating data across systems (32%)
• resistance to change (31%)

To overcome these challenges, the research emphasised the need to shift the mindset to drive adoption across organisations through effective change management (56%) and leadership alignment and support (44%).

Want to explore the best practices to redefining skills-based talent management for tomorrow's workforce? Join us on 11 June for HRO's Transform Talent Hong Kong 2025. Register now to secure your spot and transform the future of talent with industry leaders.