Introduction
A skills management tool is a system that enables the tracking of the skills of the employees in a company. Skills matter more than job titles when you need tasks completed. Therefore, employee skills management is becoming more important than job titles in dynamic work environments. Mastering skills management is already a vital part of company daily operations in many Skills Based Organizations (SBOs). The question is how long you can handle skills manually and when it is more effective to purchase a dedicated tool.
Why companies need a skills management tool
Consultancy and staffing companies need a skills management system in an early phase
When you first establish a company, the first thing in your mind is seldom the skills management system. In bigger companies, the employee skills management strategy is a fundamental part of the operations. The company business area largely determines how soon a company will need systematic skills management. If you offer consultancy services for customers or establish a staffing agency, you’ll need a skills management system early. In these business areas, you can have quite large offerings with different skill sets of employees. On the contrary, many product development companies can manage without a skills management system for much longer.
In the IT sector, there can be dozens of programming languages, front-end techniques, and other technical skills that one person masters. Also, customer demands can be specific on the technologies they use which requires specific in-depth knowledge of the skills. As an example, software development is rarely a skill that can be sold to an IT project. The programming language skill, such as Java, Python, or C#, is a much more relevant skill to customers.
Companies need skills management for functions across the units
In your company, you will need the skills data for different purposes. Skills management function is not solely the responsibility of HR as still so often perceived.
- Sales: Salespersons need skills management to generate CVs and understand the skill levels in the company. They need this information to be able to sell projects and services to prospective customers
- Project management: Project managers need information on who has the skills needed in the project, and when these people are available.
- Competence development: HR or people operations require information on people’s current skills. They form a companywide skills matrix evaluate skill gaps, and plan training needs accordingly.
- People development: Managers need information on employee skills and their ambitions to agree employees’ learning targets in the development discussions.
- Business development: Business leaders predict the skills that will be needed in the future. They rely on their knowledge of market situations and changes.
When skills management tools become useful
Companies that grow will need a skills management tool
Small companies know well their skills
Often, the company’s first employees know each other’s competencies so well that there is no need for any skills system. In this phase, you can manage with an Excel list or matrix to list all the competencies in the company. Also, employees find it as easy to find the right people just by communicating directly or via online communication tools.
In a consultancy company, you have most likely asked your employees to prepare their CVs with their competencies and projects. In a small company, one person might handle the knowledge of the skills for the sales. Another person might handle the project staffing. These are centralized ways to handle the matching of the people and projects. These methods work well for you as long as the number of employees stays small or the skill set is narrow. As the company grows to more than 20-30 employees, you will have it harder to remember everyone’s skills. But you can still manage it. When you reach over 60 employees, you start to think about skills management tools seriously.
Growing companies have need for robust skills management systems
As the company grows over 50-100 employees, demand for skills management tools increases. There will be requests from the sales, project managers, or staffing managers and you need to start the process for purchase. Handling skills in Excel, by chat inquiries or person-centric solutions, become increasingly inefficient.
Some regulations affect skills management. In Europe for example, the staffing agencies need to comply with General Data Protection Regulation (GDPR). You need to have strict procedures for how you store people’s personal information such as CVs. If you handle all this data manually, you will find yourself in an inefficient situation and unable to scale. Manual approaches rely also on subjective data, including greater risk for human error, and data inconsistency or data security issues. All that you can usually easily handle by a dedicated skills management tool.
The importance of skills management in mergers and acquisitions
As mentioned, you often take a skills management system into use when your company grows. If the employee turnaround is quite small, you can manage quite a long with the manual methods.
Another case when the company size grows is in the situation of mergers and acquisitions. If you merge with another company, there will be a bunch of new colleagues with new skills. Managers might be unfamiliar with the skills of the other half of the company. Examples include IT a service company acquiring a design company to help design customer journeys for IT solutions they already provide. Managers might be familiar with the new terminology on a high level but require additional knowledge of the skills. In these situations, you will find a skills management tool that can help to describe different skills and their regular use to be effective.
Company reorganization benefits from skills management tools
After your company has grown, it is often time for an internal reorganization to align better with the business targets. Skills information is needed to form the new units and the new managers will need competence information for their new teams.
In these situations, also past experience, hidden knowledge, and skills acquired in free time and hobbies might be emphasized. Often, the employees know well their colleagues’ skills that they have been using in their current positions. But in many cases, the employees are not utilizing all their skills in their job tasks. Managers might never know these skills that their employees possess.
People with long careers have performed tasks in various environments and learned a lot. Therefore, their total skill base can be much wider than that managers have recognized in their current position. Understanding all the employees’ skills is necessary when establishing a new department and staffing it efficiently. Hidden skills can also be a source of innovation.
How to choose and implement a skills management system
Prepare a project plan for purchase and roll-out
When you have reached the point that you start looking for a skills management system, there are several points to consider. You can start a project for the tool purchase and appoint a project manager as a responsible person. The simple project plan could be the following:
- Define objectives: Define a clear objective for the usage of the skills tool. Based on the objective define requirements/features that should be in the skills management tool
- Compare tools: Search for alternatives and shortlist it to max 5 tools for comparison. Evaluate features, pricing, support, and other aspects you require. If the tools provide demo or trial environments, use those to get concrete knowledge of the tools
- Select the vendor and create an implementation plan: Select the tool and implement it according to the vendor guidelines, perform system configuration and customization. Set clear milestones.
- Installation and setup: Migrate the existing data to the system and integrate it with the needed internal systems.
- Educate the personnel and establish a support function. Educate the usage of the tool to the employees. Ensure there is a clear channel for asking questions and requesting support.
- Evaluation and closing: Gather feedback and evaluate the usage of the tool, perform any actions needed, and close the project.
Prioritize the requirements
When considering which features are the most important, consider at least the following:
- Input and update the skills: what is the method of input of the skills, can you input manually a new skill, how easy it is to import as a batch a set of new skills, are there any possibilities to import from existing data, such as CVs, how easy it is to update the skills by employees.
- Categorization of the skills: how the skills can be categorized, are there any categories available in the system, do you need to invent your own categories, is the categorization automated.
- Skill levels: How skill levels are described, is there a scale or can you give the level as months or years, is there a possibility to add a target level or desired level even for skills that the person doesn’t yet have.
- Search function: how easy it is to search persons with specific skills and skill levels, is it possible to search for individuals or can you search for entire teams by giving a project description.
- Reporting: how the reports are organized, are you able to visualize skills by persons, by teams, or by managers, how easy it is to view the skills matrix and gaps, are there any benchmarking possibilities.
- Integrations: what integration possibilities exist with other common systems, does the system have an API interface that allows you to create your own integrations with your IT systems.
Conclusion
In summary, you will consider a skills management tool when your company grows organically or through mergers or acquisitions. Also, regulations or organizational changes emphasize the need for a proper skills management tool over manual efforts. When you choose a tool for your company, you have several aspects to consider. You should organize the selection and roll-out as a project to lead it properly from the beginning to the end.