The world is changing rapidly. The old way of assigning people to projects is more and more detached from the job titles. Instead, individual skills management is becoming more important in deciding who can perform different tasks. Read on how to handle employee skills management.
Introduction
Employee skills management is gaining more attention in modern workplaces. Today’s projects are more complex, require different combinations of skills, and collaboration of many people. If you’re not aware of your employees’ skills, it becomes impossible to execute business operations effectively. Knowing your team’s strengths is crucial for success in both winning new business and managing ongoing projects and services.
Job titles can’t express a wide variety of individual skills, and organizations that stick to job titles only may lose the potential for growth, agility, and innovation. Many organizations already experiment with the roles as a collection of skills that are needed to perform tasks. When an organization has put skills at the center of their structure, they are called Skills-Based Organizations (SBOs).
89 % of executives say skills are becoming important for the way organizations are defining work, deploying talent, managing careers, and valuing employees.
Source: Deloitte Skills-Based Organization Survey, May–June 2022.
In this blog, we explain in depth why employee skills management has become one of the most important functions in organizations that aspire for success in the future.
Keep reading or select one of the sections to jump forward:
The Foundation of Skills Management
Challenges in Skills Management
Strategies for Successful Skills Management
Benefits of skills management
You can achieve several benefits when applying skills management methodologies in your organization:
- Place talented people where they work best: Make sure projects and services have the right skills to achieve their goals effectively.
- Keep the top achievers in your team: If you can give people work tasks that they’re good at, they’re more likely to stay in the organization. When you have a good balance between the skills that you have already mastered and new skills to learn, you will feel engaged and motivated in the work.
- Be ready for change and respond quickly: Competence requirements can change fast, like with Artificial Intelligence. You must notice those changes and adapt quickly on the organizational level.
- A positive and enjoyable work experience: Staying motivated is easier when you get to do what you’re good at, learn new skills, and feel valued for what you bring.
- Innovate: By breaking free from strict job titles, anyone with the right skills can bring innovation, adding more diversity to collaboration.
The foundation of employee skills management
Defining skills management
Skills management can be defined as a strategic approach that organizations use to identify, develop, and optimize the skills of their workforce. It encompasses a range of activities, from assessing the current skill set of employees to providing training and development opportunities. The goal is to align individual skills with organizational objectives, fostering a more agile and adaptable workforce.
Categorizing skills
When you start employee skills management, you usually start by listing individual skills in a skills inventory. Depending on the organization, there can be tens, hundreds, or even thousands of finest-level skills, and you will soon notice that you will need some categorization. There are many ways to categorize skills, and you can learn one high-level categorization from the following chapters. Under these categories, there will be more and more fine-tuned categories.
Hard skills are the foundation of expertise
Hard skills are often referred to as job-specific or technical skills. They form a basis for expertise in a particular field. These skills are tangible, quantifiable, and usually acquired through education or training. Examples of hard skills can be for example a software developer’s coding language skills or an accountant’s financial analysis skills.
Non-technical skills define collaboration
Non-technical skills are often referred to as interpersonal or people skills. Sometimes they are even called soft skills, which is a misleading term because these skills can be hard to master. Non-technical skills include skills such as communication, teamwork, adaptability, and emotional intelligence. These are important to organizations’ success because these skills contribute to effective collaboration, leadership, and a positive working environment. You should recognize and nurture these as well as technical skills because they have a significant impact on professional growth and the organization’s culture.
Transferable skills are used across jobs
Some skills can be used in different job positions across different industries and these are called transferable skills. These skills include for example critical thinking, problem solving, and organizing skills. Understanding and improving transferable skills is important to help people to be ready for different jobs as careers change.
The key components of employee skills management
Skill identification and assessment
To start the systematic employee skills management in your organization, you need to first identify the skills required for various roles within your organization. Modern skills management systems can take input of skills from various sources and categorize them automatically. You can use already made CVs, hour tracking systems, LinkedIn profiles, and such as a quick source of skills information.
Once you have identified the current skills within the employees, you should also understand the level of each skill. Traditionally, this has been done through surveys, performance evaluations, or specialized skill assessment tools. The process can be extensively time-consuming and the modern tools with Artificial Intelligence (AI) can automate this process significantly.
This is also a good phase for identifying the skills that the individuals don’t have yet, but that they would like to learn. When you track also the desired new skills, you foster a culture of continuous learning. With this, you can support employees’ motivation and give them the confidence to grow in their careers.
Skill gap analysis
After you have identified the current skills, the next crucial step is to conduct a skill gap analysis. This involves comparing the skills that employees possess with the skills that are required for their current or future roles. In this step, pay attention to who will identify the skills for the future.
If you need upskilling, that is usually the task of HR or People Operations. Or the person who is responsible for ensuring that people have the skills and competence needed for their current work tasks. On the other hand, if you need reskilling, that is the employees should learn new skills on a larger scale, you will need that information from the Business Leaders. The Business Leaders are responsible for following the future trends, understanding the technological advancements and shifts in their industry, and foreseeing the skills that the organization will need in the future.
Figure out what’s missing, and you can decide on the best ways to train and help people get better at things they need for their jobs.
Training and development programs
After you have finished the skills gap analysis, you can design targeted training and development programs. You can organize the training initiatives in various forms such as workshops, online courses, mentorship programs, and on-the-job training. The aim is not only to fill skill gaps but also to ensure continuous learning and improvement.
Continuous update of the skills base
Employee skills management doesn’t end with training; it’s an ongoing process. In organizations where learning is built into the culture, the employees learn new skills every day. Employees update the skill base continuously with new skills so that they will be available for others. This way, for example, salespersons know exactly the available skills in the organization, and the HR is aware of which skills the company is lacking and where to embark on new learning or recruitment.
Too often, no one updates the skills base, or employees and managers update it only once a year during performance discussions which decreases its significance over time. When selecting a tool to maintain the skills base, this is one of the most important features to look at. Employees should have easy access to directly maintain and update their skills information within the tool.
Read more in our blog: Update of skills data: How often is sufficient?
Challenges in skills management
If you have already tried skills management, you may have encountered some challenges that typically arise in this context. While the concept of skills management is undoubtedly beneficial, implementing it comes with its set of challenges.
Dynamic nature of skills
One of the primary challenges that you will face is the dynamic nature of skills. In today’s fast-paced business environment, skills that are relevant today may become obsolete tomorrow. Adapting to these changes requires organizations to adopt agile skills management practices, enabling them to quickly identify emerging skills, be able to track current skills and their levels like a real-time fitness tracker, and adjust their training programs accordingly.
44 % of core skills will change in the next five years
Source: World Economic Forum, Future of Jobs Surveys 2023
It is simply not anymore enough that the manager reviews skills once a year in the performance review. You should monitor them constantly, and it should be extraordinarily easy for employees to keep their skills data updated with the most recent skills and skill level changes.
Skills data is hard to create and even harder to maintain
Employees might resist skills management initiatives, viewing them as additional burdens or fearing that the skills base becomes outdated. It is not uncommon that creating a skills hierarchy and selecting the right skills among hundreds of other skills for each employee has taken hundreds of hours from even a small or mid-sized organization. It does not help that after this huge effort, not many find the task of consistently updating their skills to be motivating.
You can use traditional approaches such as effective communication about the benefits of skills management, transparency about the organization’s goals, and involvement of employees in the process. These methods can help mitigate the resistance to some extent.
However, the most efficient way is to make the skills updates by employees as easy as possible. It is most beneficial if the employees can update their skills easily in a chat-like environment, for example by chatbots in a messaging app that they are already using daily.
Resource constraints
Implementing comprehensive skills management requires investment in technology, training programs, and resources. Small and medium-sized enterprises may face challenges in allocating the necessary resources. These companies can benefit from a skills management tool that uses extensive Artificial Intelligence to automate the skills tracking process and has integrations to the key systems of the organization to draw information on skills advancements.
Measuring skill levels
There can be some debate about how to measure the skill levels, and what is the meaning of different levels. Many organizations rank their skill levels on a scale of 1-5, and they find it sufficient. Others find it more useful to express them as years or months of experience. Also, there are some special teams where you need to understand if the knowledge is wide (covering widely a certain skill) or deep (covering a narrower but very in-depth area of a skill).
Unlike technical skills, soft skills such as communication, teamwork, and adaptability are often harder to quantify. Finding effective ways to measure and assess these skills is a common challenge in skills management.
One easy way to use the numerical levels is the following:
- Level 0: No experience
- Level 1: Understanding of the basics
- Level 2: Good level of experience, but still learning
- Level 3: Professional experience, person can work independently with this skill
- Level 4: Lead experience, a person can also guide others on how to use this skill
Strategies for successful skills management
Aligning skills with business goals
Remember that organizations must align skills management closely with the overall business strategy. With this alignment, you ensure that the skills developed within the employees directly contribute to achieving organizational objectives. Regularly reassessing and realigning skills based on changing business needs is crucial for sustained success.
Read more: Skills management tool: when should you purchase one?
Embracing technology
In the digital age, technology plays a pivotal role in skills management. Utilizing advanced analytics, artificial intelligence, and learning management systems can streamline the process of skill identification, assessment, and gap analysis. Technology also enables personalized learning experiences, catering to individual employee needs and preferences.
Cultivating a learning culture
A learning culture is fundamental to the success of skills management initiatives. Organizations should foster an environment where continuous learning is not just encouraged but ingrained in the company culture. This involves promoting a growth mindset, recognizing and rewarding learning achievements, and providing accessible learning resources.
Additionally, ensuring skills transparency and visibility to all plays a pivotal role in cultivating a learning culture. It fosters collaboration and encourages individuals to share their knowledge and expertise, contributing to the overall growth of the employees. Furthermore, it enhances accountability as employees can see the skills valued and recognized within the organization, motivating them to actively participate in their own skill development.
Empowering employees
The HR department does not solely bear the responsibility for skills management. It is crucial to empower employees to take ownership of their skill development and continuously update their skills information. Organizations can achieve this through self-assessment tools, personalized development plans, and platforms that allow employees to access learning resources independently and update their skills information effortlessly. Ensuring that employees actively participate in their own skill enhancement improves the overall effectiveness of skills management.
Conclusion
In conclusion, skills management is becoming more integral in rapid business environments, and the significance of simple titles will decrease. Skills management requires a strategic and adaptive mindset from the management. It should be embedded in the company culture in the form of constant learning, innovation, and efficiency, and employees should have a clear role to add and update their skills frequently. When selecting a tool to be used for skills management, it should align well with company business goals and fit seamlessly into daily operations.
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