EY and iMocha report: 83% employees likely to stay with firms prioritizing a Skills-First approach

• 87% of the employees believe that their organizations do not fully use their skills
• Organizations embracing a skills-first approach can experience up to 5x higher transformation efficiency compared to traditional role-based methods

22 August 2024, Pune: EY, the leading professional services organization and iMocha, the leading skills intelligence and skills assessment platform, today released their third report in their ‘Tech skills’ series titled, ‘Driving economic impact and realizing value with skills intelligence’. The report highlights that 63% of HR leaders observed a positive impact on talent retention, and 58% saw improvements in employee performance due to Skills First Transformation (SFT) initiatives. A notable 83% of employees believe they are more likely to stay with companies that adopt a skills-first approach.

It further notes that traditional methods often overlook the full spectrum of costs associated with workforce transformation. Skills intelligence provides a more accurate and holistic view, enabling better cost management and can yield up to 5x times the efficiency in transformation efforts, a crucial advantage as industries grapple with rapid technological changes.

The report reveals four pivotal insights:

1. Typical accuracy rates for current hiring, training, and attrition processes are at 70-80%, which can be further improved by 10-20% through skills intelligence.
2. The true costs of workforce transformation are often underestimated. When typical accuracy rates and hidden costs are factored in, they can drive up full unit costs by 3 to 10x of their typical values.
3. Regardless of the transformation type, an uplift in accuracy rates with skills intelligence can deliver 1.5 to 5 times higher transformation efficiency.
4. Realizing the value from skills intelligence starts with a unified business case and requires collaboration across HR, business, and finance leaders.

Reflecting on the report findings, Priyanka Gupta, Partner, People Advisory Services, EY India said, "As skills intelligence gains traction, leaders need concrete data on its impact to move beyond initial trials. Companies should monitor their accuracy rates in hiring, training, and attrition to gauge their true costs and the improvements possible with skills-first transformation (SFT). As more organizations embrace SFT 2.0, we'll see industry benchmarks emerge, reflecting the real-world impact of skills intelligence."

Amit Mishra, CEO of iMocha, said, "As organizations face an accelerating pace of change, driven by AI and digital transformation, the ability to harness skills intelligence has become a decisive factor in achieving sustainable growth. Our latest report demonstrates that a skills-first approach not only addresses the pressing challenge of the skills gap but also unlocks significant economic value by improving the accuracy and efficiency of workforce transformations."

With increased accuracy from skill-intelligence in hiring, training and employee attrition across organizations, the economic loss due to friction in workforce transformations can potentially be reduced significantly, while improving employee engagement from its low global average of ~23%.

The report concludes that to address the global skills gap affecting ~80 million job roles by 2030, companies worldwide must enhance their workforce transformation efficiency. With the integration of skills intelligence and SFT 2.0, there is a collective effort to significantly reduce the anticipated $8.5 trillion in lost annual revenues by 2030.

The report draws on in-depth interviews with HR and business leaders, as well as survey data from over 240 HR leaders and 340 employees across 175 unique companies.

About EY

EY exists to build a better working world, helping create long-term value for clients, people and society and build trust in the capital markets. Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate. Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data, and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com

About iMocha

iMocha, a leading Skills Intelligence Platform, empowers organizations with a skills-first approach. Since 2015, iMocha has led skills management, offering AI-powered solutions for skills validation, skill matching, and skill inference. With over 300 global customers, including 15 Fortune 500 companies, iMocha helps streamline talent acquisition, optimize skill development, and drive performance. For more about iMocha, visit www.imocha.io