Organisations have discovered the perfect business model: demand highly specialised skills from workers whilst accepting zero responsibility for developing them. It’s rather like opening a restaurant that requires diners to cook their own meals but still charges full price.
Welcome to the skills-based economy, where companies proclaim the urgent need for capabilities they refuse to create, workers bear sole responsibility for acquiring expertise nobody will teach them, and everyone pretends this represents progress rather than the largest cost-shifting exercise in modern employment history.
The training boycott
ManpowerGroup’s survey of more than 40,000 employers across 42 countries reveals that temporary workers now handle 24 per cent of specialised tasks versus 39 per cent for permanent employees. Industry leaders celebrate this as “workforce agility.” Let’s call it what it actually is: organisations discovered they can demand premium capabilities without investing in their development by simply hiring them temporarily when needed. Why train employees when you can rent expertise?
Companies spent decades reducing training budgets, eliminating mentorship programmes, and treating employee development as discretionary expense. Now they lament the “skills gap” as though it’s a natural disaster rather than entirely self-inflicted. It’s rather like defunding fire departments and then expressing shock when buildings burn.
Traditional employment, for all its flaws, included implicit training obligations. Organisations invested in workers they expected to retain. The flexible talent model eliminates these mechanisms entirely. Companies declare they need specialised capabilities, then sit back and wait for them to materialise. When they don’t, organisations complain about skills shortages whilst steadfastly refusing to address them through actual investment.
The competency shell game
Here’s where it gets clever. Skills alone aren’t enough, organisations insist—workers need “competencies.” Knowledge plus skills plus attitude plus business acumen plus emotional intelligence plus that indefinable quality of “culture fit.”
Notice the pattern? Every additional criterion creates another reason why nobody deserves decent compensation.
India produces millions of engineering graduates annually. Employers reject them wholesale—not because they lack knowledge, but because they lack “competencies” that, coincidentally, nobody offers to teach them. The solution? Workers should somehow acquire these mysterious qualities on their own whilst working low-paid jobs to survive.
The competency framework isn’t about identifying valuable capabilities—it’s about creating unfalsifiable criteria ensuring workers always fall short. Without objective measurement, skills-based hiring becomes pure negotiation theatre. Those skilled at self-promotion command compensation disconnected from contribution. Talented individuals lacking networks get systematically undervalued. The meritocratic promise is complete fiction.
More fundamentally, objective measurement would create obligations organisations desperately want to avoid. Clear frameworks identifying valuable skills would require transparent development pathways. Workers could legitimately demand training in capabilities worth premiums. The ambiguity isn’t a bug—it’s the entire point.
The scarcity scam
Skills-based pay, we’re told, rewards valuable capabilities meritocratically. In practice, it applies only where extreme scarcity forces organisations to pay premiums. IT, green technology, electric vehicles—sectors where capabilities are desperately rare command higher compensation. Everyone else continues under traditional structures.
Notice who escapes skills-based scrutiny entirely: senior leadership. C-suite hiring remains about “strategic vision” and “executive presence”—the same vague criteria they deny everyone else. A CEO can fail spectacularly at three companies and still command eight-figure packages based on “experience.” A young engineer with proven skills gets told they lack “competencies.” The skills economy applies downward, never upward.
Consider the numbers: 4.7 million US independent workers earned over $100,000 in 2024—impressive until you recognise these represent just 6.7 per cent of America’s 70 million freelance workers. The remaining 93 per cent compete in commodity markets where “flexibility” means precarity.
The skills economy isn’t creating broad prosperity—it’s enabling spectacular success for a tiny elite whilst everyone else faces deteriorating conditions. For 93 per cent of workers, skills-based hiring means the same inadequate compensation wrapped in meritocratic rhetoric.
India’s perfect storm
India faces uniquely catastrophic exposure because it combines maximal skills-based hiring rhetoric with minimal supporting infrastructure. Companies demand specialised capabilities whilst the country lacks platforms connecting talent with opportunities, financial products for irregular income, or social safety nets independent of employers.
Workers get shoved into flexible arrangements with nothing protecting them. Education remains disconnected from market needs. And organisations accept zero responsibility for any of this.
The inequality implications are staggering. Urban, English-educated populations access networks creating skill premiums. Everyone else gets trapped in commodity markets where small advantages cascade into unbridgeable gaps.
The reckoning
The shift toward skills-based hiring represents the largest cost externalisation in modern employment history. Organisations discovered they can demand highly trained workers without training them, specialised capabilities without developing them, and premium performance without paying for it—at least for 93 per cent of the workforce.
This isn’t making labour markets more efficient—it’s transferring risk from organisations to individuals whilst eliminating support structures that made that risk bearable. Workers who develop rare, valuable skills through luck or privilege can thrive. Everyone else faces deteriorating conditions disguised as opportunity.
The solution isn’t mysterious. Organisations benefiting from skilled workforces should invest in creating them. Revolutionary, we know. But until companies accept responsibility for developing capabilities they demand, the skills economy will remain what it currently is: an elaborate scheme enabling organisations to capture value they refuse to create.
The great skills heist is underway. The only question is how long before workers realise they’re the ones being robbed.