In the words of Johanna Bolin Tingvall, Global Head of L&D, “Learning is the new pension.”

Businesses in our modern workplace should be able to change directions fast if they are to attain the kind of agility needed for success. But what is required to enable these almost instantaneous pivots?

Many business executives understand that skills are the ultimate fuel for releasing agility. To quickly redeploy people to meet new priorities as they arise, businesses require a complete understanding of the capabilities of their workforce. However, most businesses lack a centralized, exhaustive source of information to illuminate the skill sets of their employees.

This brings us to the fundamental question, What is Skills Taxonomy?

What is Skills Taxonomy?

A skills taxonomy refers to a classification system for skills, knowledge, and abilities that can be used to describe and categorize the various types of skills that individuals and organizations possess. 

This taxonomy can help individuals to understand their own skills and identify areas where they may need further training or development. It can also be used by organizations to assess their employees' skills and identify areas where they may need to offer training or development programs.

There are many different ways to categorize skills, and the specific taxonomy used can depend on the context in which the skills are being used. Some common categories used in a skills taxonomy include:

Technical skills:

These are specific skills that are related to a particular job or field, such as programming, data analysis, or graphic design.

Soft skills:

These are interpersonal skills that are important in a variety of work contexts, such as communication, teamwork, and leadership.

Transferable skills:

These are skills that can be applied in a variety of work contexts, regardless of the specific job or field, such as problem-solving, time management, and critical thinking.

Industry-specific skills:

These are skills that are specific to a particular industry or field, such as medical billing for the healthcare industry or financial analysis for the finance industry.

The specific categories used in a skills taxonomy can vary based on the context and the goals of the classification system. The important thing is that the taxonomy is designed to help individuals and organizations to understand and categorize the skills they possess and identify areas where they may need further development.

Elements of Skills Taxonomy

A taxonomy typically includes three levels:

1. Domain or Area of Expertise:

 This level represents the broad areas of knowledge and expertise, such as business, technology, or education.

2. Skill Category:

 This level defines a group of related skills within a domain, such as project management or software development.

3. Skill:

This level represents a specific ability or knowledge, such as agile project management or programming in Python.

For example, in a technology domain, a skill category could be software development, and a skill within that category could be programming in a specific language like Java or Python.

Benefits of Skills Taxonomy

1. Better Candidate Assessment

The hiring process is made easier when the skill set required to succeed in a particular role is well-defined. Recruiters or HR professionals can more properly determine a candidate's suitability for the position once they are aware of the abilities required to succeed in a certain capacity. This minimizes Time to Hire by ensuring the best candidates are selected.

An employer's employment process is changed by the skills taxonomy to emphasize a skills-based approach. This strategy refers to a method where recruiters or HR specialists concentrate on finding people with the necessary competencies rather than on a specific role.

2. Insight into Skill Gaps

When properly implemented, skills taxonomy gives employers useful insight into the skills required to carry out a certain job and to prosper within the organization. This information streamlines skills gap analysis, making it much easier to find the best candidates through skills assessments.

3. Customizable Upskilling & Reskilling Programs

Organizations can better identify the specific talents required inside the company by investing in skill taxonomies. When developing educational programs for employees in the form of upskilling or reskilling, this knowledge can be leveraged.

Not every learning and development program, however, can assist you in future-proofing your company and ensuring that both the company and its people benefit.

Employers can pinpoint the skills required to succeed and fix them using a skills-based strategy by conducting a thorough skills and gap analysis. Employing this knowledge will enable businesses to get the most out of their learning and development initiatives.

4. Reduced Bias

Internal promotions assist employees to feel like their hard work is appreciated while lowering hiring expenses and onboarding time. However, it can raise questions about a lack of transparency and deliberate prejudice on the part of the company, favoring current workers.

A skills taxonomy provides guidelines for the hiring procedure, performance evaluations, and promotions. This increases transparency for internal mobility plans and lessens systematic bias overall.

5. Optimizing resource allocation

Organizations can better deploy resources with the appropriate abilities to meet the demands of a given activity with the aid of skill taxonomies.

By mapping the skills and evaluating them, the preparation that goes into developing a skill taxonomy helps businesses pinpoint the specific capabilities that are needed. Employers who take a skill-based approach can produce reports outlining the organization's strengths and weaknesses.

Employers choose people with job-specific skills and degrees of ability within that skill set throughout the recruitment process rather than matching candidates to the requirements of the role to maximize resource allocation.

Step-by-step Guide to Building a Skills Taxonomy

Here's a step-by-step guide on how to build a skills taxonomy:

1. Identify the purpose of the taxonomy

Determine the purpose of the taxonomy, whether it is for a particular job or a general taxonomy for the organization. This will help you to focus on the most relevant skills and knowledge areas.

2. Gather data

Collect information about the skills and knowledge required for the job or role in question. This can come from job descriptions, performance appraisals, industry reports, or through discussions with subject matter experts.

3. Create a list of skills

Based on the data collected, create a list of all the skills and knowledge areas relevant to the job or role.

4. Categorize skills

Group similar skills together into categories. For example, you might have categories such as "Technical Skills," "Interpersonal Skills," and "Leadership Skills."

 5. Develop a hierarchy

Within each category, create a hierarchy of skills, with the most general skills at the top and more specific skills at lower levels. For example, within the "Technical Skills" category, you might have "Programming Languages" as a top-level skill, with "Java" and "Python" as sub-skills.

6. Refine the taxonomy

Review and refine the taxonomy, ensuring that it accurately reflects the skills and knowledge required for the job or role.

7. Test and validate

Test the taxonomy with a small group of employees and make any necessary adjustments based on their feedback.

8. Implement and maintain

Implement the taxonomy and make it part of the organization's systems and processes. Regularly review and update the taxonomy to ensure it remains relevant and up-to-date.

By following these steps, you can create a skills taxonomy that accurately reflects the skills and knowledge required for a particular job or role and provides a consistent and standardized way of identifying, tracking, and assessing employee skills and development needs.

Over to You

The first step to reaping the benefits of a skills-based strategy is creating a skills taxonomy. Now is the time to step up your HR efforts, whether you're preparing for a digital transformation project, seeking to build a more adaptable and resilient organization and workforce, eager to improve employee experiences, or seeking to provide more value to your customers.