SAP’s Future of Work Trend Report identifies three major areas relevant to work that are undergoing massive changes with the spread of artificial intelligence (AI): future of workforce, future of people practices, and future of HR.

Here Christian Schmeichel, Chief Future of Work Officer at SAP SE, discusses these transformations.

Q: The second half of 2024 has begun, and SAP is positioning itself as a business AI company, including offering an AI assistant for its business software. What do SAP employees think about the company’s increased focus on AI?

A: AI is no longer a new topic within SAP’s workforce. According to an internal study from late 2023, 80% of respondents are optimistic about AI. This has been confirmed. It’s also because we are a software company. There are certainly industries where the workforce is more cautious about AI, but this is less the case at SAP, partly because we place a high value on privacy and data protection. Our employees also see the great opportunity that SAP has with business AI to unlock the next stage of development for our portfolio. This excites many.

Q: As chief future of work officer at SAP, your team is responsible for predicting and managing changes in the workplace. How is the spread of AI currently influencing the future of employees?

A: The race for the future has intensified with AI. Our customers want to know how their workforce structure needs to evolve and what steps they need to take as a company to ensure current and future employees have the skills and qualifications needed to collaborate effectively with AI.

Global megatrends such as climate change and the entry of younger generations into the workforce are additional challenges that interest us at SAP. Like other companies, we are also exploring scenarios to determine what skills we will need in 5 to 10 years, how roles and activities will change, and what level of AI and robotics will be required in different teams. It’s not easy for anyone to imagine where we will be in five years, which keeps things exciting.

Q: What impact does the further spread of AI have on daily work?

A: Unlike other technological changes in the past, the current development in the context of AI is a fundamental shift in the interaction between humans and machines. I believe that learning to work with AI, including learning to delegate tasks, is necessary. We already see generative AI being used in all areas of work, and the topic is becoming very tangible. This ranges from research and data analysis to creating reports, presentations, and meeting minutes. It may turn out that we will take on tasks with a completely different focus in the future. For example, we may do tasks that cannot or should not be entrusted to AI because they require decisions that are currently beyond its capabilities, such as creativity, strategic thinking, or moral judgment.

Q: Can we speak of a shift away from purely role-specific work towards skill-based tasks?

A: Certainly. Depending on the role, whether it’s in development, sales, consulting, or more, there are specific, typical applications of AI. However, it also involves developing a certain mindset that involves a lot of self-reflection: what am I best at and what can I do better than AI in the future? Where can I best apply my skills? I believe this will become increasingly important. With a stronger focus on widely applicable skills rather than rigid role profiles, there is a certain fluidity in the organization. Employees will become increasingly flexible and will not need to switch roles or departments to take on tasks that match their skill set and interests. I see this as a great opportunity to increase job satisfaction.

The second major area involves the corresponding digital application skills. These include practical skills, such as giving a prompt in a way that AI can provide what is needed, as well as knowledge of ethics and compliance.

Q: Such comprehensive changes in a short period of time demand a lot from employees. How can the right people practices support them?

A: An important first step is to be aware of the changes that are happening. We live in an era where there are ever faster and more impactful technological changes happening. Employees need a toolbox to successfully face this massive change they experience every day. Topics such as mental health have been important at SAP for some time, and we see that practical techniques for stress management and adapting to changed work situations are in high demand. However, the use of AI also offers great opportunities to promote a good work-life integration.

Q: How does the application of AI today and in the future affect HR work?

A: There are already numerous exciting use cases for AI in HR that aim to make processes more efficient. For example, in recruiting, AI can generate job postings faster and create tailored interview guides. In the area of learning, there are already good opportunities, such as providing personalized information and individual training.

In addition to possible efficiency gains, AI will help the HR department become even more strategic in the future. Transactional tasks can increasingly be automated and taken on by AI, giving HR professionals more time for strategic tasks. For example, more focus could be placed on providing personal advice for employees, which is currently often hard to do given the many daily demands on HR professionals.

Q: What does the use of AI mean for the work of the People & Culture organization at SAP specifically?

A: The goal is to fully leverage the potential of AI as part of our transformation to best support our leaders and employees with their daily work. At the same time, it’s about continuously improving the efficiency within certain areas of the People & Culture organization. There is great interest among our employees in working with AI applications. To date, more than 50,000 employees have used the generative AI experience lab tool and submitted over 5 million prompts. It can now be said that AI is seen not only as a collaborative tool but also as a partner for work. Thinking “AI first” is an important aspect for continued success and to achieve our goal of becoming the No. 1 business AI company.

Furthermore, forward-looking HR work aims to create an attractive work environment where employees can do their tasks with a high level of motivation and enjoyment. In the age of AI, it will become increasingly easier to recognize in a timely manner how the workforce is doing and where there may be issues to act accordingly. Survey and feedback formats developed and controlled from the People & Culture organization should, with the help of AI, allow for results much faster in the future, helping to respond promptly to developments and needs within the workforce.

Q: How does the spread of AI influence your own work?

A: As chief future of work officer at SAP, I am excited about the opportunity to be at the forefront of the major changes that AI brings to HR work — and in the People & Culture Board area at SAP, we are actively driving the topic as a showcase for our own SAP solutions. For my role, this means actively shaping the influence of AI on the development of our workforce and the entire HR department alongside my team. This includes strategic workforce planning, modern work methods, and impulses for the further development of the HR organization to guide the future of work at SAP toward an exciting and digitalized future. AI will fundamentally change the work of employees, and the next few years will certainly be some of the most innovative in HR and the larger technology world. This is a great opportunity to significantly shape the development of the working world at SAP.

For more information:

• Future of Work Trend Report 2024
• SAP Responsible AI Handbook
• SAP Business AI

SAP Spend Connect Live returns next month to Las Vegas, and I can’t wait.

Beneath the glow of its famed neon lights, the city is set to play host to the world’s premier spend management conference, where SAP will showcase the increasingly vital role played by AI-enabled cloud solutions in shaping the flow of business-to-business commerce – and in ensuring the transparency needed for trading partners to foster collaboration, gauge sustainability, and bolster resilience throughout global supply chains.

To carry out business processes with confidence and continuity amid uncertain market conditions – from procurement and supply chain to logistics and asset management – organizations rely on an unending stream of data amassed through the routine course of operations. A firm’s growth prospects typically correlate with its access to such data, both its own and that of its trading partners. The higher the quality of that data, the more valuable the insights it contains, particularly when analyzed by emerging AI capabilities. At a time when operational data increasingly determines competitive advantage, businesses have turned to cloud-based networks to harness its potential. Operational data has thus become one of the most precious resources in any organization.

Of course, successful businesses have always set themselves apart by access to scarce resources. But did you know the same holds true for world-class cities as well?

Settled in 1905 as a rail link between Salt Lake City and Los Angeles, the sleepy stopover known as Las Vegas was an unlikely candidate to become one of the fastest growing U.S. cities a century hence. Limited in arable land, much of the region lay fallow in the early twentieth century. But with the opening in 1936 of the Hoover Dam only 50 kilometers to the southeast, a city was born and a spectacular growth story begun. The world’s largest public works project of its day, construction of the dam required 21,000 workers to excavate 4.2 million cubic meters of rock, lay 937 kilometers of pipe, and pour 3.5 million cubic meters of concrete – enough to pave a highway stretching from Lisbon to Lapland.

Completed more than two years ahead of schedule in the depths of the Great Depression, the Hoover Dam soars 221 meters over the Colorado River, irrigating 1 million hectares of farmland in California, Arizona, and Nevada. It provides drinking water for urban centers including Phoenix, Tucson, Los Angeles, and Las Vegas and produces 4 billion kilowatt-hours of sustainable hydroelectric power annually for millions of homes and businesses across the southwestern U.S.

For nearly nine decades, the Hoover Dam has served as a conduit through which water and electricity flow in abundance, giving rise to a thriving city synonymous with legendary entertainment, a resplendent skyline, and limitless opportunity. For its part, SAP Business Network too is a conduit for exponential growth. But the precious resource it distributes is operational data, and its beneficiaries are the millions of trading partners that conduct business through its enterprise applications augmented by new generative AI capabilities.

Powerful business networks, not unlike mighty hydroelectric dams, represent marvels of engineering, feats of architecture, and transformative solutions to formidable operational challenges. With this in mind, I’m hard pressed to think of a more fitting backdrop to spotlight our latest SAP Business Network innovations than the gleaming city of Las Vegas and the vivid growth story it embodies. Please join us there for SAP Spend Connect Live from October 14 to 16, where we’ll explore how customers are countering disruption, extending visibility, reducing costs, infusing sustainability, and strengthening resilience throughout their interconnected operations and those of their trading partners. We’ll devote extensive discussion to the broadening set of capabilities within SAP Business Network’s trading partner experience, aimed at optimizing value for all of the disparate parties engaged in business-to-business transactions. You can bet on an engaging, enlightening set of sessions led by peers; and I hope to see you there.

Jörn Keller is executive vice president and chief product officer of SAP Business Network.

Young people from Manhattan to Mongolia are leveraging technology to address issues of climate change. Those most impacted are also the most incentivized to do something about it. Over 1 billion children — half of all children globally — are at an “extremely high risk” due to the impacts of climate change. Organizations that support young people, including UNICEF, are rallying their support around young innovators addressing the opportunities and the risks climate change poses for youth.

SAP is also committed to finding solutions to climate change and working across generations to make it happen. As the world’s largest provider of enterprise application software, SAP plays a complementary role to organizations like UNICEF. With a unique ability to help the world’s largest companies achieve more across their value chains and drive sustainability at their core, there is enormous potential to use SAP technology for good. Coupled with its technological expertise, there is also a long-standing commitment to accelerate solutions by connecting corporate financial and nonfinancial resources with the expertise of young innovators.

Air pollution is a complicating factor of climate change. On International Day of Clean Air for Blue Skies, the world looks at this issue that is not locked within borders, making it difficult to address. It warms the global climate, exacerbating natural disasters and risking the health of millions of underserved people living in vulnerable areas.

In Mongolia, air pollution is particularly problematic as the country deals with rapid urbanization and a harsh climate. The country has a strong reliance on burning coal because it is inexpensive and readily available. Coal represents 90% of the energy used and is a huge economic export, creating jobs and wealth in a high-need country. Even though coal was banned in Mongolia’s capital city in 2019, coal use has led to enormous levels of smog and mounting health risks for thousands of citizens. In a country known as the “Land of the Eternal Blue Sky,” local youth like Enkhuun Byambadorj are not willing to accept this reality.

Enkhuun was just 17 when she co-founded Breathe Mongolia, an organization leveraging data and technology as a differentiator in solving pollution. With family members affected, she had deeply personal reasons to create tangible action. She quickly understood the value of leveraging technology to scale solutions to the masses and built a centralized source of air quality data for Mongolian communities. “These are all tech-based tools that we use to reach more audiences and more people than we could otherwise,” she said. Today, with information available in English and Mongolian, Breathe Mongolia has become a go-to source for air quality data in the region.

With Climate Week on the horizon, taking place during the annual UN General Assembly, SAP will step forward to represent the value of working with young innovators like Enkhuun with GenU. GenU was founded in 2018 as part of UNICEF aiming to equip youth with the necessary skills and resources to participate in key conversations around pressing global issues.

When given the opportunity, youth bring an impressive passion for creating impact, coupled with a digital-first mindset, that allows decision-makers to channel new solutions. Breathe Mongolia is one of the millions of impact organizations operating globally and putting people and planet first. SAP wants to ensure its success and that of the more than 10 million social enterprises operating globally, many led by young people. Together with leading youth social impact partners like Generation Unlimited, ChangemakerXchange, and We Are Family Foundation (WAFF), SAP is hoping to close the opportunity gap and ensure that youth have the resources they need to innovate and fulfill their potential. This commitment for youth inclusion extends beyond Climate Week and UNGA. Throughout the year, SAP and its leadership team lead by example, involving expert young leaders in the company’s innovation strategy and sustainability programs, opening doors that provide them with a seat at the table.

Whether you are attending Climate Week or participating virtually from home, every sector and individual has a role to play to combat issues like climate change. To better understand the challenges that youth face and the potential to incorporate youth voices in challenging projects, leverage The Possibilists global study on young changemakers and WAFF’s global study on intergenerational collaboration.

If you are a young climate innovator based in North America or Sub-Saharan Africa, we also encourage you to check out resource support through Changemakers for the Planet.

Selina Henn is a strategy and operations associate for Corporate Social Responsibility at SAP.

Over the past five years, the topic of skills has emerged as a key trend in HR strategies. Organizations are starting to see how crucial it is to understand and use skills effectively to ensure they have the talent they need to be successful. A skills-based approach can truly revolutionize workforce management, boost productivity, and drive business success. But it’s important to remember that there’s no one-size-fits-all solution. Every organization will have its own path to integrating skills into its HR practices, shaped by its industry, culture, and specific needs.

At SAP SuccessFactors, our HR research scientists have conducted five years of research to understand how skills can be effectively incorporated into HR strategies. After speaking with 278 HR leaders and surveying 9,432 global employees and managers, we’ve identified four key strategies to integrate skills into your people practices to become a skills-focused organization. Let’s explore these approaches and the technologies that can support them.

1. Skills-Implied Approach

In a skills-implied approach, organizations use traditional criteria like candidates’ or employees’ previous job titles, educational background, and past experience to make decisions instead of using skills data. Here, work is centered around job roles, and decisions about hiring and pay are based on job titles and levels. Learning and development is tailored to current roles, and promotions follow standard paths tied to credentials and tenure. Workforce planning tends to focus on short-term headcount needs, with minimal use of skills data for deeper analysis.

This approach is best for roles requiring specific certifications or highly specialized skills that are either externally regulated or require extensive training, such as lawyers, certified public accountants, and pilots.

In terms of tools and technology, job architectures can help clarify roles and align jobs based on the type of work performed. For example, the job profile builder in SAP SuccessFactors solutions helps manage job elements such as descriptions, experiences, qualifications, skills, competencies, behaviors, education, and certifications. It can offer a flexible, intuitive way to identify and share job description components across an organization.

2. Skills-Included Approach

In a skills-included approach, work is organized around job roles with an emphasis on a few key technical skills. Hiring focuses mostly on traditional criteria like education but includes some skills assessment as well. Pay is generally based on job title and level, though skills might impact bonuses. Learning and development targets skills that are crucial for current or future roles. While skills are considered in workforce planning and reported in broad terms, they’re not connected with other data sources for deeper insights.

This works best for roles where required skills remain mostly consistent, but the prioritization and application of those skills evolve over time, as in, for example, sales and people management.

Recruiters can use AI-enabled recruiting tools to consider an applicant’s technical and professional skills during the hiring process. For example, the SAP SuccessFactors Recruiting solution’s AI-assisted applicant screening can provide a skills compatibility score, allowing recruiters to view how well an applicant’s skills match job requirements. Candidate profiles include details on exact skills matches, additional relevant skills, potential skills, and missing skills to help recruiters quickly and effectively screen the best applicants.

Learning management systems can support targeted skill development for current roles. SAP SuccessFactors Learning, for example, can offer AI-driven learning recommendations and a dynamic search feature that filters by criteria such as duration, mobile availability, and specific skills. This helps promote continuous learning and can guide employees in developing skills for advanced proficiency levels. Additionally, SAP Content Stream applications by Skillsoft offer over 1,250 expertly curated learning paths aligned with high-demand skills and competencies. These include areas like AI and generative AI, cybersecurity, data management, leadership, first-time management, and performance and culture. Learners can refine their skills through various methods, including reading, watching, listening, and active practice.

3. Skills-Led Approach

In a skills-led approach, jobs are defined by a mix of technical and professional skills. Hiring looks at a range of skills, along with traditional criteria. Pay is linked to both the skills employees bring to the table and their performance. Learning and development is customized based on skills data and personal interests, helping to create personalized plans and internal mobility opportunities. Workforce planning becomes strategic, focusing on closing gaps between current and needed skills, and skills analytics are used to dive deep into skill levels and how they connect with other data.

This is best for roles where critical skills are specific or uncommon but proficiency can be inferred from adjacent skills, such as in marketing and operations.

Thinking about tools and technology, skills platforms can be useful to support this approach by tracking and analyzing skills across the workforce. The SAP SuccessFactors talent intelligence hub, for example, uses an AI-driven framework to integrate skills data from multiple sources, enabling organizations to make data-driven talent decisions. In addition, learning platforms provide development opportunities tailored to individual skills and career goals. For example, SAP SuccessFactors Learning offers AI-driven recommendations and peer suggestions for personalized learning. Skills tagging and the search for skills help to foster a habit of curiosity and a culture of continuous learning. Additionally, talent marketplaces like SAP SuccessFactors Opportunity Marketplace can offer experiential learning opportunities through AI-driven suggestions for mentors, short-term assignments, dynamic teams, and job openings.

4. Skills-Based Approach

In a skills-based approach, jobs do not exist – instead, work is organized entirely around the skills required to complete it. Hiring is all about evaluating skills instead of sticking to traditional criteria. Pay is tied to the skills employees currently have, with bonuses for skills that will be valuable in the future. Learning and development focuses on preparing for future skill needs, and internal mobility is driven by moving employees where their skills are most needed. Workforce planning is strategic, looking ahead to forecast what skills will be needed, and skills analytics keep track of trends and how skills connect with other business data.

This works for roles that rely more heavily on technical skills, roles that use certain tools or processes that are common across organizations or industries, and roles where skills can be gained outside of an educational setting, like HR, IT, and finance.

Integrated talent management platforms take care of all aspects of skills development and deployment in this approach. With SAP SuccessFactors solutions, organizations can use an AI-driven, unified skills model that covers everything from recruiting to learning, performance, and succession planning. The SAP SuccessFactors talent intelligence hub helps organizations get a clear view of their workforce by linking individual skills, strengths, and preferences with the right people and experiences across the platform. This can make managing skills throughout the employee lifecycle much easier and more effective.

As organizations work to weave skills into their HR strategies, understanding these four approaches can help them create a skills-based plan that fits their unique needs and goals. Whether you’re starting with a skills-implied approach for specialized roles or aiming for a skills-based framework for more dynamic functions, the key is to align the strategy with your organization’s specific context and objectives.

By exploring these approaches and using the right tools and technologies, organizations can build people practices that boost efficiency, transparency, and overall success. Finding the right mix and approach for your specific needs is key to unlocking the full potential of skills-based management.

Read the full report to dive deeper into our skills research. Want to see how focusing on skills can unlock an organization’s potential? Learn about Erie Insurance’s journey to becoming a skills-based organization.

Business leaders are increasingly making skills a top priority for their organizations as they strive for agility in a complex world. However, many are running up against a looming skills gap that threatens to undermine business continuity. In fact, the World Economic Forum predicts that 44% of workers’ skills globally will be disrupted in the next five years. Organizations cannot afford to simply wait and see how their industries will be affected; the risk of being left behind in the marketplace is too great. SAP SuccessFactors’ 2024 HR Trends research reveals the costly choices that organizations must now navigate to acquire new skills – whether to build, borrow, buy, or bot. 

Norsk Hydro, a global aluminum and renewable energy company based in Norway with 33,000 employees in 40 countries, is one example of an enterprise that is on a journey towards becoming a skills-based organization. Jeanine Fremstad, Norsk Hydro’s global lead for Skills and Learning, explains why the company is taking a proactive approach to skills development and learning: “We need to keep up with the evolving landscape of workforce skills to remain competitive and at the forefront of our industry.” 

Upholding a long-standing tradition of sustainable industrial development, Norsk Hydro has ambitions to pioneer the transition to “green aluminum” powered by renewable energy by the end of the decade. To get there, the organization decided to take a structured approach to skills and learning by undertaking a pilot project using SAP SuccessFactors solutions.

Fremstad says the initiative is essential to Norsk Hydro’s business strategy and to attract and retain people. “We need to know what skills we already have in the company in order to know what skills we need to attract. We also need to know what skills we need to develop,” she says. “Being able to offer attractive learning and development opportunities is key to retaining people.”

She offers a straightforward assessment of where the organization stands and why change is necessary: “Our internal research shows that one in three employees are unsatisfied with the opportunities for professional development, future careers, and equal opportunities. And we just think that’s not good enough; therefore, we started on a skills transition journey.”

Selecting a Trusted Partner for AI-Driven Skills and Learning

In April 2024, Norsk Hydro began a pilot to offer its workforce access to AI-driven skills and learning recommendations for their professional development. With 100 employee participants in various countries, the company’s HR team has purposefully set the bar for success high. “We believe that for Hydro as an organization, success will mean we will see improved employee experience and engagement, reduced attrition, and that we will have better insights from data for workforce planning,” Fremstad says.

Norsk Hydro selected SAP as its trusted technology partner and joined the SAP Early Adopter Care program because of a shared vision for people-centric skills and AI-enabled learning. It is working closely on the project with SAP partner TalenTeam, taking advantage of its Skills Transformation Suite to speed innovation.

Transitioning to a Skills-Based Organization

The first step in Norsk Hydro’s skills journey was to build the company’s skills library based on a curated skills library from an external provider. The AI-assisted curation process analyzed Norsk Hydro’s job architecture and 33,000 job titles and identified likely relevant skills from the external skills library. As a result, approximately 4,000 skills relevant to Norsk Hydro were mapped against job families. The central project team is working to validate and refine these results.

Next, Norsk Hydro used SAP SuccessFactors talent intelligence hub to help gain the power and simplicity of a single skills model from recruiting, onboarding, learning, and development through to performance and succession. The talent intelligence hub can connect skills, attributes, strengths, and preferences to both people and experiences throughout SAP SuccessFactors solutions. Each employee has a growth portfolio of skills, which helps empower them to own their learning and career development. Employees can also manually add role-specific skills and skills of interest for their development. Norsk Hydro is applying a trust-based approach that allows employees to maintain their skills profiles and build their development plans based on their prioritized skills. While certain skills may need to be validated and assessed for legal compliance requirements, the employee generally may decide their proficiency levels for most skills.

As a third deliverable in the project, Norsk Hydro updated its internal development process to ensure that skills are an integral part of the leader-employee dialogue. It aims to tighten the connection between skills, goals, performance, and learning.

Also, Norsk Hydro recently implemented the new integrated learning experience from SAP SuccessFactors Learning. Embedded AI can enhance the employee’s experience with relevant skills-focused learning recommendations that are unique to each employee based on their needs and interests. Norsk Hydro’s offering of learning opportunities comprises a broad set of both internal and third-party channels. On the organization’s new learning homepage, all courses are now automatically tagged utilizing TalenTeam’s Skills Transformation Suite, so that relevant learning to close skills gaps is easy for employees to find and access.

The project team has taken away some good learnings on the journey to becoming a skills-based organization. For example, Fremstad recommends taking the time to validate the skills library to ensure the correct level of granularity for skills and establishing only one skills library to make certain each employee has a single skills profile. Different vendors use different skills taxonomies, which can cause problems when integrating them. She underscores that it’s important to constantly work towards delivering the best user experience possible.

A key element to the success of the pilot is continuously testing and collecting feedback from users, she says. Pending a successful pilot, Norsk Hydro’s long-term ambition is to implement the SAP SuccessFactors Opportunity Marketplace solution – offering AI-driven recommendations to help match employees with assignments, career opportunities, and mentors – and a broader rollout of the talent intelligence hub to all employees. Employees will benefit from having a “single pane of glass” overview for all learning and development opportunities across the organization.

Elevating Skills as the Red Thread in HR

Norsk Hydro is building a skills-based organization rooted in a learning culture that will ultimately deliver benefits to employees and leaders alike. Employees will gain the autonomy, leadership support, and growth mindset to set them on a path of lifelong learning and development, so that they have the skills they need to build their careers and ensure future employability. Leaders will benefit from having data-driven insights that support workforce planning and match the right people with the right task to achieve business goals. They will also be able to attract and develop talent by offering a more compelling career proposition that includes skills growth and re-skilling.

“We believe by doing this,” Fremstad says, “we are creating the foundation for a skills-based organization by starting with learning and development. Long term, we would like to see skills as the red thread throughout our HR processes.”

Find out about talent management with SAP SuccessFactors solutions and the integrated learning experience from SAP SuccessFactors Learning.