Labour markets across OECD countries are undergoing profound change. Digitalisation, demographic shifts, the green transition and evolving business models are reshaping job requirements and the nature of work. Employers report persistent talent shortages, even as formal educational attainment continues to rise. At the same time, many adults struggle to have their skills recognised when moving across sectors, regions or learning pathways. Together, these developments have prompted growing attention to skills-first approaches that place demonstrated skills, rather than credentials alone, at the centre of labour market and learning systems.
This report examines why skills-first approaches to hiring, talent management and skills development are becoming essential to improve labour market functioning and productivity. It explores the foundations required to support such approaches, including, among others, the development of a common skills language, the integration of modular and micro-credential learning into education and training systems, the adoption of skills-first human resource practices within firms, and the role of career guidance and recognition of prior learning in linking learning to jobs. By examining emerging practices and policy experiences across countries, this report aims to inform governments, employers, training providers and other stakeholders seeking to embark on, and continue, their skills-first journey. Placing skills at the centre of labour market and adult learning policies is not an end in itself. It is a means to support economic dynamism, resilience, and social mobility in a period of sustained transformation.
This report was drafted by Shizuka Kato, Michele Tuccio and Roland Tusz from the Directorate for Employment, Labour and Social Affairs. The work was led by Michele Tuccio (Senior Economist) and supervised by Glenda Quintini (Head of the Skills and Future Readiness Division). The authors would like to thank all respondents to the OECD Trends in Adult Learning Policy Questionnaire 2025, as well as the Employment, Labour and Social Affairs Committee, for their valuable feedback. They are also grateful to colleagues from the Centre for Skills-First Practices at the Singapore University of Social Sciences-Institute for Adult Learning (SUSS-IAL) for their collaboration in developing the Skills-First Readiness and Adoption Index. Finally, the authors gratefully acknowledge the administrative and editorial support provided by Saoirse Douglas and Natalie Corry.