Skills Management: Understanding its value and taking action

The talent and passion of your employees is, when properly harnessed, one of the greatest assets and points of competitive advantage that you can have at your fingertips. Even though it may be possible to develop a mental map of the skill levels of all employees (for example in a micro business consisting of 1 to 5 employees), many invaluable tools and processes exist that can help you take things to the next level. But when your company grows to 10 or more employees, the lack of an effective skills management model can begin to have an impact, and the company may find itself playing catch-up.

What is skills management?

Skills management is the process of identifying, developing, and aligning employee skills with organizational needs to ensure the right people are in the right roles for optimal performance and job satisfaction.

It involves cataloging your workforce’s abilities and creating detailed profiles of employee skills, knowledge, and qualifications. Enabling you to employ this data for effective resource management and capacity planning. By bridging the gap between current skill sets and job role requirements.

Skills management is all about knowing what skills your employees have, figuring out what skills they need, and making sure they’re in the roles where they can do the best work. It’s a relatively straightforward process to find out what everyone’s good at, help them get even better, and make smart choices about who does what. And a big part of that is identifying skills gaps, so you know exactly where to focus your training and development efforts.

Skills Management, at its core, has three objectives.

Objective 1 - Understanding Employee Skill Levels

The first objective of skills management is to gain a comprehensive understanding which employees are skilled in which areas, primarily through effective skills assessments. For any individual employee, it should be possible to know their level of skill in each of the core competencies unique to the business. The ability to quickly assemble a clear view of an individual’s capabilities and shortfalls brings about a number of benefits. By having a clear picture of the skills available, an organization can more effectively plan projects, assign tasks, and identify areas where skill development is needed. The second part of this objective is to understand which skills are adequately represented within the organization. That is, of the competencies that are core to an organization’s business, how well is the organization able to deliver on those competencies?

Objective 2 - Adapting to Skill Demands and Developing Skills

Once the skill levels of both the organization and its employees are documented and understood, the next step is to identify gap areas for development. This can involve the identification of key individuals who perform certain tasks or roles within the organization and tailoring a specific development program to address gap areas. The flow on advantages of such targeted development programs can offer immediate and high-value benefits, which can be life-long, contributing to their personal growth, work satisfaction and career advancement.

At an organizational level, identifying key skill gaps enables the implementation of more accurate and targeted training programs. To ensure the organization meets its objectives, this may involve creating new roles or making adjustments to existing ones.

Objective 3 - Workforce Planning and Optimal Staffing for Tasks

Understanding which staff are the right ones for a given task is key in both resource planning, as well as the day-to-day management of the business. Having this knowledge readily available is a powerful advantage. Organizations often rely on spreadsheets for a snapshot of employee skills and task assignments. While spreadsheets can offer a basic overview, they often fall short in providing the dynamic, real-time insights needed for optimal decision-making. Moving beyond spreadsheets to more sophisticated methods can significantly improve the efficiency and effectiveness of workforce allocation, tapping into the full potential of the team for every project. Ensuring that the right people are consistently assigned to the right jobs can improve productivity, customer satisfaction, and in turn, the company’s bottom line.

Why is skills management so important?

To be fair it has always been important, skills management of employees is both an enabler and blocker to the changing ways in which we work. Technology moves fast and organizations are being pushed to move faster than ever. Skills management has become an effective way for organizations to keep pace with technological advancements, evolving job roles and changing industry standards. Ensuring that their workforce is skilled, adaptable and ready to meet the challenges of tomorrow.

Skills management isn’t just about identifying and developing the necessary technical skills for a role, it also includes soft skills such as leadership, communication and teamwork. These competencies are important for a cohesive, innovative and resilient modern workforce. Skills management is fast becoming an integral part of strategic human resources management, ensuring that organizations are fully leveraged to achieve their strategic objectives. A detailed understanding of employee skills, targeted development programs and strategic staffing decisions can ensure that organizations have the right mix of competencies to thrive.

Why now? The urgent need for reskilling

Right now, the push for reskilling and upskilling is on everyone’s radar, and here’s why it should be on yours too. A 2021 survey from McKinsey reported that 87% of companies worldwide recognize the challenge – they’re either facing a skills gap right now or anticipate one emerging soon.

Back in 2021, the OECD threw out some big numbers. They predicted that, thanks to automation, about 14% of jobs worldwide could vanish and another 32% could change drastically within the next couple of decades. And that was before the latest developments in AI, like ChatGPT, started making waves. Add to that the World Economic Forum who are suggesting that half of us might need to brush up or learn new skills by 2025, and you’ve got a pretty clear picture of why sitting tight just isn’t an option.

Post-pandemic, businesses aren’t just trying to bounce back; they’re navigating through a maze of new challenges:

  • The economic downturn is squeezing profits
  • Remote and hybrid work models rewriting the rules of office life
  • The battle for top talent is fiercer than ever in a competitive job market
  • And, AI and automation are transforming how (and where) we work at breakneck speed

So, how does skills management fit into all this? It’s our best shot at not just weathering these changes but thriving through them. By getting smart about the skills our organizations need and the talents our people have, we can:

  • Make smarter use of our teams, improving what we do without increasing costs
  • Keep our people growing and sticking around by showing them we’re invested in their futures
  • Get everyone up to speed for the next wave of work, ensuring our teams aren’t left behind as jobs evolve

Skills management isn’t just another task on the to-do list; it’s a strategic advantage. It’s about making sure we’re all ready and able to hit the ground running, no matter what the future throws our way.

Now is the time to get started. Talk to the team and learn more about best practices surrounding your learning and development strategy and how you embed skills management into your decisions.

The benefits of effective skills management

Effective skills management brings significant advantages across the board, enhancing workplace dynamics, streamlining management processes, and solidifying organizational strategy. At its heart, it’s about bringing out the best in everyone – from the ground floor to the executive suite.

An effective skills management strategy brings benefits to multiple parties:

  • For Employees – It empowers individuals by helping them recognize their unique strengths and areas for growth. Encouraging them to set personal goals, and to understand their value and the contributions they bring to the organization (which in turn can boost morale).
  • For Managers – It provides clarity. Gaining a clearer picture of the competency levels of the staff that report to them. Enabling tailored training and development programs and informed staffing decisions. It also offers data-based insights into key staff in each area, allowing for the deployment of the right staff for specific tasks and visibility into any critical knowledge silos.
  • For Organizations – It allows leaders to see where the company stands. Highlighting areas of strength as well as areas of weakness in the organization. Providing a strategic overview that makes planning and skills development prioritization straightforward and effective.
  • For HR Professionals – They benefit from a data-driven overview of the workforce’s skill set, helping them accurately map out all the different talents in the organization. Aligning employee skills with organizational needs and individual career aspirations, enhancing recruitment strategies and creating more effective training programs.

Navigating the challenges of skills management

The pace of change in skill requirements and demands can be overwhelming, but with the right tools the process is more manageable. Effective skills management enables organizations to adapt by conducting skill assessments and adopting a skills-based approach. Offering a roadmap for breaking down traditional roles into specific skill sets, enabling a more flexible approach to workforce development and deployment.

When you’re working within a small team, keeping tabs on everyone’s skills is manageable. It’s easy to remember who’s good at what or to jot down a few notes in a spreadsheet. But as your team grows, this simple system starts to show its cracks. Remembering the varied skill sets of a large workforce becomes an impossible task, and that spreadsheet? It turns out to be less helpful than you thought.

Then, throw in the curveball of remote and hybrid working. Suddenly, those daily, in-person interactions that helped you gauge your team’s skills and capabilities are gone. It’s harder to keep track of who knows what, and talented individuals might not be as visible as they once were.

Unlike the static rows and columns of a spreadsheet, skills management software offers a dynamic, centralized hub for all your skills tracking needs. It doesn’t matter if your team is spread across the globe or working from the comfort of their home; with a few clicks, you can filter through your workforce to find the perfect match for any project.

How to get started with skills management

No matter where you look, more and more people are talking about becoming skills-based and the benefits it can have across talent decisions. It’s often easy to understand the value, but where do you actually start? The reality for many organizations is the lack of skills data to even begin testing with certain teams or roles, this is all while being constrained by time and budgets.

You could spend tens of thousands of dollars on an external consultant to provide a list of skills in a few months – but that doesn’t help you get insights quickly or create buy-in across your organization.

You could try to scrape resumes and web data, but without a clear data schema and software in place, this leads to unreliable, unstructured, unusable data that, at best, provide little value or, at worst, leads you to make poorly informed people choices.

You could also stay using your trusted spreadsheets to track, manage and report on skills, but we all know they can be unreliable and difficult to keep up to date (not to mention when you’re looking at hundreds of thousands of data points).

That’s why you’re here, right? You have had the aha moment and realized that your skill tracking spreadsheet is broken, unwieldy, and just not solving the core problem.

Understanding the hype around becoming skills-based is one thing; figuring out where to start is another. Many organizations find themselves at a crossroads, recognizing the need but lacking the data or resources to act on it. Here’s a streamlined guide to navigating this path without breaking the bank or drowning in data.

Step 1 – Identify Needed Skills

Begin by clarifying the skills your organization needs for the future, aligning with senior leaders on the vision and upcoming projects. This step is about understanding the gap between current capabilities and future requirements.

Step 2 – Audit Existing Skills

Take stock of the skills your workforce currently possesses. If you haven’t already, setting up a central skills register is a good start. This should detail each employee’s skills, experience, and qualifications.

Step 3 – Assess and Measure Current Skills

With your skills inventory in place, now it’s time to get measuring. This step is all about evaluating how well your team’s skills stack up against what’s needed. This is where you really get a sense of the skill levels at play and where to focus your training or recruitment efforts.

Step 4 – Close the Gaps

With a clear view of what skills are in demand, it’s time to strategize on closing the gap. This might mean leveling up your current team’s skills, hiring new talent, or maybe even a mix of both.

Step 5 – Focus on Reskilling and Upskilling

There’s a lot to be said for nurturing the talent you already have. Upskilling and reskilling your team not only fills those skill gaps but also boosts morale and loyalty. Given that limited career progression is a key reason people leave their jobs, actively upskilling your team is a smart move.

Step 6 – Recruit with a Skills-Based Approach

When upskilling isn’t enough, or you need to expand your team, adopt a recruitment strategy that focuses on skills over traditional credentials. This means looking for candidates based on their ability to perform and contribute to specific projects and roles, rather than solely on their past job titles or educational background.

Step 7 – Leverage Technology

Finally, tie everything together with the right skills management software. Choose a platform that not only allows you to track and match skills within your organization but also integrates with your planning and project management processes. This technology should support your strategy, making it easier to deploy the right people on the right projects efficiently.

Choosing the right skills management software

There are a few things you need to look for in skills management software to best support training and learning interventions. At a fundamental level, you should consider if the software has a way to:

  • Track and manage skills across the board
  • Accurately measure skill levels
  • Provide a clear visualization of skills within your organization
  • Connect skill gaps directly to targeted training opportunities
  • And, re-measure and update skills in a fast and dynamic way

People Leaders need a quick and easy way to understand the true picture of their team’s skills so they can begin measuring and acting on skill insights sooner.

That’s why we created the Skills Base Library, and why we’ve made it free for anyone to use.

The Skills Base Library is a curated list of skills that comes pre-mapped to various roles. This is configured using skills management best practices across logical groupings and skill descriptions.

Whether you import one, or one thousand skills, they are yours to use. Add additional skills, remove what’s there, or just get a sense of what we recommend on a daily basis to hundreds of organizations using Skills Base.

Our goal is to give anyone the ability to experience the value of becoming skills-based sooner. And by sooner we mean days, not months.

How it works, skills ready in seconds

Open up your skill directory page, click on open the Skills Base Library, choose the desired roles, and import. It’s that simple.

If you want to start exploring the benefits of skills management and the impact it can have on your talent decisions, Skills Base is free for up to 25 users and 250 skills.

Head across and create your account here.

Or, see everything Skills Base has to offer by scheduling a demo with the team today.

Over to you

Whether your organization is large or small, think about how an effective skills management strategy and program could bring you efficiency, and potentially, competitive advantage. Leverage the benefits whilst identifying weaknesses, and allow this to feed into and drive strategic programs that assist the organization in playing to its strengths.

Ready to kickoff your skills transformation project?

Our skills experts are here to help you make it a reality — Book now for a no obligation meeting.


Ready to start benefiting from skills management? Book your free 30-minute meeting with a skills expert today. 

A Skills Base Whitepaper

The Skills Base Methodology
A Framework for Skills-Based Organizations and Teams