The latest Pay for Skills survey results are in. They offer insights that will help accelerate the skills conversation in your company and allow you to benchmark your progress against your peers.


More than 650 organizations from around the world contributed to the survey. They shared their experiences attracting, retaining and rewarding people with the skills they require to advance their business strategies.

What’s driving skills-based talent strategies?

With more companies than ever before prioritizing skills over education, all organizations need to think about developing their skills-based talent management capabilities.


Competition for top talent is fierce. About 45% of companies report a pressing need for skills that are generally in high demand, which makes the search for talent (and talent retention) especially challenging.


Overall, the need for certain skills has moved to the forefront of the hiring process — in some cases ahead of education and experience. As a result, skills-based pay practices are often deployed to attract new talent. However, even though organizations are assessing skills when hiring (with a view to achieving their strategic goals), many companies still have no formal skills-based rewards in place to recognize and drive in-house skills development.


This poses the question: are companies over-focusing on skills during the hiring process, while under-focusing on building and retaining the skills they need to advance their business priorities?

Key strategic purposes for using skills-based pay

  • Strategic necessity to revamp an organization’s key technical skill sets
  • Implicit need linked to strategic goals
  • Entry into new markets
  • Development of new services/products that require a new/enlarged technical skill set
  • Aggressive strategic policy of hiring high-end professionals (e.g., AI and digital)
  • Explicit goal present in the strategic plan
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Approximately half (47%) of companies report that they are yet to develop an approach to the classification of skills at any level of their organization (this is a minimal change since 2021). This key statistic supports Mercer’s experience that many companies are still at the very beginning of their skills journey.
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Get the Pay for Skills survey report

Access insights and benchmarks to accelerate your skills-based talent strategy. Learn why pay for skills is important strategically but difficult to operationalize across an organization.


Five key questions to address

Five key questions being addressed by organizations leading the transformation towards the use of skills-focused talent strategies.


What skills do we need and how will we incorporate a skills taxonomy into our job architecture?

What skill proficiency level do we expect for each role?

How do we assess the skills that will drive our business forward?

How will we reward those with top skills?

How will we operationalize our skills-based strategy?

Mercer’s latest Pay for Skills survey report offers insight into how your peers are progressing on the journey to develop skills-based talent practices. It highlights the most common approaches to building skills taxonomies, tracking skills (both within an organization and in the market), developing proficiency scales, and operationalizing pay-for-skills strategies.

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Traditional pay-for-performance approaches are not going away anytime soon, but many of the more skills-mature companies are looking for ways to weave skills into their established performance-based approaches.
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How to start your pay-for-skills journey

Mercer Skills-Edge Suite is an integrated service offering comprising consulting, technology, and data. The Suite gives you the information and insight you need to advance skills-based talent and pay practices across your company.


  • Partner with Mercer to transform your workforce through skills-based talent practices


    Transformation demands deconstructing jobs into units of skill and updating talent models so skills become the basis for defining work, deploying talent, managing careers and valuing employees. Without accelerating progress on their skills agenda, organizations won’t have the talent to take advantage of emerging new jobs. Leading companies are re-inventing their talent and reward programs around skills.


    Making the move from jobs to skills affects how you approach workforce planning, reskilling/upskilling, performance management, your internal talent marketplace, succession planning, pay and talent acquisition. Partner with Mercer to help you transform your workforce.


    Strategic workforce planning

    Apply internal and external supply and demand skills research data for enhanced insights and redefined talent/skills pools


    Conduct rapid reskilling, targeted by robust assessment capability, without laborious current state analysis

    Skills assessment

    Measure skills and capabilities objectively for talent acquisition, development, succession or a broader people strategy, based on your skill framework


    Invest in future skills and reinvent pay programs with AI-driven pay decisions based on skill demand, supply and criticality

    Performance management

    Know that agile environments require rapid, multi-sourced performance feedback and assessment, so skill proficiency and development activities are even more critical

    Career development/

    Enable employees’ ownership of their careers through skill mapping and adjacencies, which shine a light on actionable career paths

    Succession planning

    Ensure succession pools are informed by individual skills to expand potential talent pipelines and avoid job structures that may limit diversity

    Internal talent marketplace

    Deploy talent to gigs, projects, experiences based on skills supply and demand, promoting internal mobility and diversity of thinking and experiences across the organization

    Talent acquisition

    Select candidates based on skills, using AI-driven skill inferences and simple digital assessment tools to improve the quality of the process and the candidate experience

Download the latest Pay for Skills report

Access insights and benchmarks to accelerate your skills-based talent strategy. Learn why pay for skills is important strategically but difficult to operationalize across an organization.

Or click here to see a quick summary of the report insights first.

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