Why leaders need to think less about building skills, and more about how quickly capability can move to where the business needs it

Australia’s job mobility rate has just fallen to its lowest level on record: only 7.2% of employed Australians changed jobs in the year to February 2026, the fourth straight annual decline, down from 7.7% the year before. This is a phenomenon some are now calling “job hugging”. (Australian Bureau of Statistics)

At the same time, skills shortages remain widespread on both sides of the Tasman. In the latest Hays Salary Guide, 83% of Australian and 75% of New Zealand organisations reported a skills shortage in the past 12 months. (Hays, via iStart)

Put those two facts together and something odd shows up: capability isn’t scarce so much as stuck. People aren’t moving between roles, teams or organisations anywhere near the rate the work itself is changing. If you’re short on skills while the people who might have them sit still, the problem isn’t only the skills gap, it’s how slowly capability moves, and it’s the half of the problem most leadership teams still aren’t naming.

The usual language – not enough digital capability, leaders who aren’t ready, can’t recruit what we need, need to reskill faster – may all be true, but it only describes half the story: not simply whether an organisation has the skills it needs, but whether it can identify, build and move those capabilities quickly enough to keep pace with changing work.

LinkedIn’s 2026 Talent Velocity Advantage Report gives this a useful name: talent velocity; an organisation’s ability to see the skills it has, build or acquire what it needs, and mobilise talent in real time. Its finding is striking: 86% of organisations lack adequate talent velocity (LinkedIn).

That reframes the question for senior leaders: not “do we have the capability we need?” but “how quickly can we create and mobilise the capability we need next?”. Your capability model may simply be too slow for the future of work and, going by the ANZ numbers above, too slow to move even when the people are already inside the building.

The old model made some sense

Most organisations still think about capability in a fairly predictable way: strategy shapes structure, structure creates roles, roles carry requirements, people are assessed against them, and gaps trigger recruitment, learning or development. It’s logical, and it worked reasonably well for a more stable world.

The problem is that the world underneath the model is becoming less stable. Jobs are changing faster, AI is altering the tasks inside them, skills are crossing functional boundaries, and new combinations of human and technological capability are emerging, while organisations are asked to respond faster at the same time. Mercer’s 2026 Global Talent Trends research found that 98% of executives are planning organisational design changes over the next two years, and 65% expect 11–30% of their workforce to be redeployed or reskilled because of AI in that time (Mercer).

Against that backdrop, the traditional annual cycle – define capability, assess gaps, design development, wait for performance to improve – starts to look a bit slow. It’s as if the map is changing while we’re still drawing it.

Maybe we don’t just have a skills gap

One of the most useful things about talent velocity is that it moves the conversation beyond training and development, into three separate challenges: can we see the capability we already have, can we build or acquire what’s missing, and can we move it quickly to where it creates value? That last question may be the most important.

Most organisations know a lot about people’s jobs, and far less about what those people can actually do. Someone may carry expertise from a previous role, a qualification, a project, or something learned outside work, but if it isn’t relevant to their position description, the organisation may never see it. Then there are the organisational barriers: business units, reporting lines, budgets, role boundaries, career pathways, managerial ownership. An organisation can technically possess the capability it needs and still behave as though it doesn’t.

That’s why the next capability challenge isn’t just about developing more talent, it’s about releasing the talent already there. Deloitte’s research on skills-based organisations found that one large technology firm it studied discovered nearly 40% of its existing employees had skills going unused in their current roles (Deloitte), exactly the mismatch behind Australia’s job-hugging numbers and New Zealand’s skills-shortage figures.

AI makes the problem harder to ignore

AI is accelerating this shift, but in my view it isn’t really an AI story, it’s a work story. The simplest version of AI adoption looks like existing job + AI = greater productivity, but the biggest value probably isn’t there. Better questions: what work actually needs doing, which parts should be done by people, which by AI, which by people working with AI, and what capability does that redesigned work require?

Mercer argues that realising value from AI depends on intentionally redesigning work, not simply handing people new tools (Mercer). The Conference Board makes the same point more explicitly: agentic AI and skills-based work redesign are one transformation, not two separate agendas (Conference Board).

Technology doesn’t automatically create value. Imagine AI removes 20% of the administrative load from a manager’s role. Does that time go into coaching and customers, or simply disappear into more meetings and email? Technology creates capacity, leadership decides what happens to it.

Don’t become obsessed with skills

There’s another danger. Once organisations realise jobs are changing, they can become obsessed with mapping skills; a huge taxonomy, competency levels, categories, assessments, dashboards. It can look sophisticated. It can also become another bureaucracy.

Skills are not the strategy. They only create value when connected to work that matters. It’s an obvious but not  necessarily common understanding that it has to be rooted in “what are we trying to achieve?”, then work backwards: what work needs to happen, what capability does it require, what already exists, and how quickly can we move it into the work..

Capability 1.0, 2.0 and 3.0

Capability management is moving through three stages. Capability 1.0 was about jobs; what does this role require? Still useful, since jobs aren’t disappearing. Capability 2.0 is about people and skills; what can this person actually do, including outside their formal job? That opens up far more flexibility. The emerging challenge is Capability 3.0: velocity; how quickly can we connect changing priorities with the human and technological capability required to deliver them? That’s a different muscle, and it moves capability much closer to strategy execution.

The Talent Velocity Audit

Use this with your leadership team against any priority capability gap; a critical role, an AI rollout, a redesign. Where does the honest answer sit: closer to the slow-model column, or the velocity column?

If most of your honest answers sit in the left-hand column, you don’t have a training problem. You have a velocity problem.

What leaders can do about it

Each row of the audit converts into something a leadership team can act on this quarter, not a multi-year change programme.

On seeing capability: run a skills inventory that captures what people can do beyond their position description – prior roles, qualifications, projects, learning outside work – and make it visible to whoever plans the next piece of work, not just HR.

On building capability: shift at least one major development investment this year from generic training onto a live business priority, so the build and the need for it happen in the same conversation.

On moving capability: this is where most organisations stall, because it runs into leadership behaviour, not process. Managers have traditionally thought in terms of my people, my team, my vacancies.

Talent velocity requires a different mindset: our capability, our priorities, our opportunities. That sounds straightforward. It isn’t. Managers understandably want to keep their best people, business units protect budgets, and career pathways reinforce functional silos.

So one of the biggest barriers to talent mobility can be the very managers responsible for developing it, part of why Australia can post a record-low mobility rate and a widespread skills shortage in the same year. If I develop someone brilliantly and they move to another part of the business, have I won or lost? That’s a genuine leadership tension, not an excuse, which is exactly why it needs a real answer, not a memo about “one team.”

On ownership: make “capability contributed beyond the team” a formal, visible part of how you assess and reward your senior leaders, not a nice-to-have next to their delivery numbers.

On redesign: before rolling AI into a role, ask what the work should look like now, before asking what tool it needs. The sequence matters more than the technology.

Before your next planning cycle

Pick one capability gap that matters to your strategy this year – a critical role, a redeployment, an AI rollout – run it through the five rows of the Talent Velocity Audit with your leadership team, and fix the weakest row before you sign off the plan.

Then ask the room the question that actually tests whether you’ve closed the gap: “If I asked our strongest people today whether they could move to where the business needs them most, would they say yes, and would we let them?”

Because having capability is one thing. Moving it at the speed of the business is another. The organisations that figure this out won’t necessarily have more skilled people than their competitors, they’ll just be faster at putting the capability they already have where it matters most.

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