Why does every HR person need to know about Skills Inventory?

This is 2023..

Gone are the years when a mere degree or certificate was enough to land a high-paying, well-settling job.

This is the era of skills.

Since we are giving so much weightage to skills, HRs or recruiting managers must maintain a skills directory of all the employees in their organization.

Similar to maintaining a catalog at a supermarket whether they have sufficient supplies to fulfill their customer needs, yes, you guessed it right, skills inventory is like keeping a skill profile of your employees and checking if they are efficient in their roles.

To make it more clear..

Defining Skills Inventory

A skills inventory is a assessment tool used to identify an individual's strengths, abilities, and areas for improvement. It involves making a list of the skills and competencies an individual possesses, categorizing them, evaluating the level of proficiency, seeking feedback, and regularly updating the inventory.

The goal of a skills inventory is to provide an individual with a clear understanding of their strengths and weaknesses, enabling them to make informed decisions about their personal and professional development.

In the words of Karim Kimbrough, Chief Economist of LinkedIn, “skills are the new currency of the labor market”. This statement is backed by LinkedIn data which says, the skill sets for jobs have changed by around 25% since 2015 and this number is expected to double by 2027.

Not only this but OECD(an international economic progress body) estimates that more than one-third of the jobs worldwide are going to be transformed by technology.

This has put reskilling in the driver’s seat and the World Economic Forum believes that by 2030, 1 billion people need to be reskilled.

The question that arises here is why are we talking about skills inventory. Well, skills inventory is that magical tool that can make it possible to maintain the vast data of every employee’s skills profile and make informed decisions about bridging their skills gaps.

Of course, the data listed above are just numbers but to strengthen your belief in skills inventory, below are some benefits of the tool that have been proven to be advantageous for various firms.

Unleashing the Potential of Skills Inventory

1. Detect your Employee's Skills Gaps

With skills inventory at hand, you can detect your employee’s skills gaps and work towards their upskilling and reskilling. The biggest advantage for you as a company is that your workforce will keep strengthening and you will have no loose cords in your circuit.

An example of the same is PWC which created a digital fitness tool to assess their employees’ technical skills gaps and accordingly train them in the respective area.

2. Effective Succession Planning

Succession planning has become a real thing today. With an up-to-date skills inventory, you get an idea of the capabilities and potential of your employees and you can decide if you want to give an internal promotion or go out in the field for your next best hire.

IBM, a leading MNC saved itself from embarrassment when the then-CEO, Samuel J. Palmisano planned ahead of his retirement and Virginia Rometty was internally promoted to become the company's first-ever female CEO. All this was possible because IBM kept a tab on their employee's skills and could make a decision as soon as Palmisano left.

3. Strategic HR Planning

Non-HR people often think that HRs and recruiting managers’ sole responsibility is to hire for the company. Breaking this misconception, yes, hiring is a big part of the HR job role but it is not limited to it.

An HR is also responsible for strategizing the needs and requirements of the company, meaning, when is the right time to hire, when is the right time to reskill, when is the right time to say bye-bye to an employee, keeping the budget of the company in mind and assessing the performances of every employee in the organization.

With so much on their plate, a skills inventory tool comes in handy and helps HR to plan the best recruitment strategy for their organization.

4. Learning & Development

A skills inventory can be used to direct an organization's training and development; think about enrolling staff members in a skills training program to prepare them for the talents the business needs. Additionally, employees could receive training for a range of positions, duties, and responsibilities.

Using the inventory and the employees' interests, training staff to be multiskilled can benefit team members by enabling them to learn from their colleagues while also enhancing their own skill set.

Through targeted and timely investment in learning and development, businesses can acquire the fundamental skills needed for an organization's future success by utilizing skills inventories.

When the skills inventory is regularly updated, it can be a helpful tool for organizing programs for recruitment, learning and development, and workforce optimization. You can make the most of your inventory by establishing a procedure for updating it and making it available to the right people.

It is simpler for firms to link their training objectives with the broader goals of the business when they can see the abilities and skills of their employees. By doing this, employers can be sure that their staff members are content and motivated, and they'll also be able to learn the skills the business needs to advance.

By now you are obviously intrigued and looking forward to creating a skills inventory yourself.

Lifting the cloche from the mystery box..

How do I Create a Skills Inventory?

Step 1: Define the scope

Determine the purpose and scope of the skills inventory and decide what skills are relevant to your organization. The first step is to identify which kind of skills, based on the strategy of your firm, you want to include in your inventory. For instance, you can divide these skills into three categories: leadership, soft skills, and technical skills.

The skills included in the inventory should be applicable, future-proofed, and suitable for every department. Start with one department if you are unsure of how a skills inventory will benefit your company.

Step 2: Gather data

Collect information about the skills and competencies of your employees through assessment surveys, performance evaluations, and job descriptions. Employ different methods such as assessment tests, 360 feedback, gamification, or a mix of all three techniques to efficiently gauge your employees.

Step 3: Create a Skills Matrix

Organize the skills and competencies into categories that are relevant to your organization, such as technical, interpersonal, or leadership skills. Then create a skills matrix in the form of tables, charts, or dashboards to get an overview of the employee’s skills.

It is simple to design a skills matrix because you may rate skills and competencies on a scale. For instance, a company may decide that a 10-point scale is appropriate, with 0 denoting no expertise and 10 denoting "expert skill."

Step 4: Analyze the data

Analyze the data collected to identify strengths, weaknesses, and areas for improvement within the organization.

You must work on finding possibilities for these skills development now that it is evident there are skills gaps. A skills inventory's objective is to assist you in making the most of the skills you already possess and identifying areas for development. Opportunities for skill development include mentoring, micro-learning, and (online) courses.

How can you Save your Skills Inventory from getting Obsolete?

A skills inventory is a useful tool, as is clearly obvious. However, it does require some ongoing care.

Managers must put in place a procedure for routinely updating the skills inventory. As the regular processes of attrition, staffing, and training and development take place, the employee's abilities, knowledge, and experiences will evolve through time. A static inventory will eventually lose its value if it is never updated because a skills inventory is a snapshot of the organization at a particular point in time.

A skills inventory is a straightforward yet extremely useful item for the manager's toolkit when carried out and handled properly. When used effectively, it can help the company achieve its goals and objectives and improve its management and human resource practices.

Over to You

To sum it up, keeping a regularly updated skills inventory will help you with recruitment, learning & development, and workforce planning activities. Make the most of this tool and keep your workplace beaming and rolling.