Businesses in Singapore are not short on talent but they are racing against time. They need to equip their workforce with the right skills – fast.

While employers in the city-state recognise the need for new capabilities, the latest report from Workday reveals a pressing challenge: 52% of business leaders say their biggest obstacle is the time it takes to reskill employees.

Many organisations are, in fact, struggling to get a full picture of their workforce’s existing skill sets. Only 46% of leaders say they have a comprehensive view of their employees’ competencies, and this makes it difficult to pinpoint training gaps, according to Workday’s report, The Global State of Skills.

“We are in the age of AI, where the rules of employee engagement and the skills required to succeed are completely different,” said Fabio Tiviti, Group Vice President, APAC & Japan Field Operations, Workday.

“That said, the human element has never been more essential. Organisations in Singapore will need to fully embrace a skills-first mindset to address the talent shortage challenges in today’s workforce,” Tiviti said.

“This will allow organisations to truly unlock the full potential of AI and ensure the workforce is well-equipped to tackle the challenges of tomorrow.”

Skills over school credentials

Companies are also moving away from traditional hiring models that focus on degrees and job titles. Instead, they are shifting to a skills-first approach and prioritising practical abilities over credentials.

Workday’s report finds that 36% of businesses have already adopted skills-based hiring, and another 24% plan to follow suit within the next year.

For many organisations, this transition marks a new business strategy: 64% of leaders believe hiring based on skills rather than job titles enhances performance and fuels productivity and innovation.

Digital skills vs soft skills?

As organisations execute their digital transformation agenda, technical expertise is in high demand. A striking 64% of business leaders in Singapore identify digital skills as crucial for the future.

However, while companies are rushing to sharpen their tech capabilities, they are also facing a growing gap in human skills. More than a third (34%) report that soft skills – such as communication and teamwork – are sorely lacking.

This creates a conundrum. AI may be streamlining tactical operations, but it still cannot replace the human touch.

Organisations are realising that to truly thrive in an AI-driven workplace, they need employees who can collaborate, think critically, and adapt to change.

AI as both disruptor and enabler

AI is facilitating the transition to a skills-based economy, but it also shouldn’t be thought of as a magic bullet.

In the move towards a skills-driven future, the biggest hurdle that employers face is still resistance to change. Nearly half of leaders cite workers’ reluctance to embrace new ways of working as a major roadblock.

On top of this challenge, there is also growing anxiety around future talent shortages. Some 43% of business leaders in Singapore are concerned about potential skills gaps, while only 30% are confident their organisations are prepared for long-term success.

Overcoming resistance to change

Despite the momentum behind skills-first strategies, business leaders acknowledge that success hinges on more than just new hiring practices. A fundamental shift in mindset is required. According to Workday, two factors will be critical in driving this transformation:

• Clear communication: 58% of leaders stress the importance of explaining the benefits of upskilling to gain buy-in across all levels of the organisation.
• Effective change management: 46% believe structured approaches are necessary to embed a skills-first culture and navigate the transition smoothly.

It’s a wake-up call for organisations: while technology will be a key driver, the success of a skills-first approach ultimately depends on human adaptability.

This means that a skills-first mindset – which allows for greater dexterity in the face of change – is no longer optional but necessary for survival.