Skills inventories to the rescue! Assign the best-fit people to your projects, surface upskilling opportunities, and hire with laser-focused precision.
Using a skills inventory is a game-changer for companies trying to efficiently manage their human resources and build a powerful workforce.
It’s a cross-functional intiative that touches many departments within a company. But, done well, it ushers in both financial and non-financial benefits. As Oli Meager, Co-founder of Skills Collective, told us:
Skills management isn't just an HR initiative, it’s a critical business initiative. And without a structured approach to it, organizations of all shapes and sizes are going to face costly inefficiencies around skills and around people (their human capital, in short).”
So what is a skills inventory and how can you leverage it to increase your company’s outputs? Let’s break this down step by step, based on our experience in resource management, and hard-won lessons from industry experts who’ve built skills management processes, and have valuable insight to share based on what they've seen.
A skills inventory is a list or a database that compiles the education, experience, skills, and seniority levels your people have. This inventory helps you assess your existing talent pool, plan resources, spot gaps, and make realistic predictions on the company goals your people can or cannot achieve.
In essence, all of this comes down to strategic planning efforts: you need to know how feasible your projects are, what skills your team is missing to reach certain targets, what kind of projects your team can take on to begin with.
Here is what the skills inventory looks like in Runn. You can look people up by role to then see what skills each person within that role has, and you can choose to assign a proficiency level to indicate how experienced that individual is in the skill area.
There are many compelling use-cases for corralling your employee skills data and making it organized and searchable in an inventory. From resource managers to individual employees and HR professionals, different segments of the business will notice tangible benefits of having this system in place:
Using skills and competency data to influence hiring decisions creates a more precise approach to hiring – one that comes from the angle of successful project deliveries instead of just overall headcount increase.
With the help of skills inventories, HR experts take an analytic look into their talent pool. They mix and match the skills their team has with the skills required to hand in individual projects.
This makes it significantly easier to identify skills gaps and make informed hiring decisions, ensuring that the time of your new employees is maximized and fully utilized.
Learn more: How to Conduct a Skills Gap Analysis ➡️
By leveraging a skills inventory, you can also determine whether your company is equipped with the necessary skills to create standout products in today's competitive market, thereby future-proofing your organization against skill deficiencies and ensuring uniform resource utilization.
Because using a skills inventory means bringing more specifics to the table, it makes matching the dots so much easier. You have all the people, roles, and skills recorded in a simple dashboard. Skills are being tracked, assessed by managers during skills assessments, and constantly updated.
This allows managers to quickly match the right people to the right tasks, improving efficiency and ensuring that resources are allocated effectively. By basing decisions on documented skills rather than assumptions, it helps reduce bias and promotes fair, balanced team compositions.
This is also an area where direct cost benefits can be seen. Correctly assigning the right people to the right projects reduces project risks and increases billable utilization, as Julie McKelvey, the Chief Executive Officer at Gem Resource Management Solutions, notes:
If you can make that accurate assignment in the beginning, you eliminate most of the risks in project delivery, reassigning, giving away work for free, making concessions and pieces like that. The other thing is, knowing what skills your teams have and making sure you're utilizing those in the right places also maximizes their billable utilization.”
Hiring new people isn't always an option. Sometimes there is no budget, sometimes there is no time, and sometimes HRs simply have no availability to start the hiring process for another role.
But a reliable skills inventory can help you out there, too. When you have all the skills information at hand, it's easy to see what resources already have the skills you are looking for – including folks who might just need a bit more training to meet the required proficiency.
At the same time, it's easy to find someone who already has similar skills and might find it relatively easy to expand their skill set even further and get reskilled for another role.
Related: What Is Upskilling & How it Can Future-Proof Your Business ➡️
Succession planning is an HR practice aimed at developing business stability and resilience. In recent research, Deloitte found that 86% of leaders believe that succession planning for managerial roles is an 'urgent' and 'important' priority.
It preemptively prepares you for the prospect that some resource – usually one in a high-standing managerial position – might become unavailable at some point. Perhaps they are transitioning into retirement, preparing to take parental leave, or reducing their hours for any number of reasons.
When this scenario comes to life, finding the right replacement can take months, even if you prioritize recruitment for that role.
But succession planning helps you prepare potential replacements. Looking for resources outside of the company is one option, but you can also look inwards, into the company's existing resources.
If somebody has the leadership skills, critical skills, technical skills, and soft skills to make a good succession candidate, you'll be able to spot it with a well-managed skills inventory.
Not having a good grip on your employees, their skills, aspirations, and talents can cause disengagement, morale drop, and even burnout — all things that can negatively impact productivity and performance.
With a skills inventory dashboard, you can spot opportunities for growth, see where your people might need mentorship, and how you can further develop their career paths within the company. Come to think of it, showing that level of care will also help your people develop company loyalty and increase retention rates.
Not tracking skills yet? Read all about skills management here:
Lastly, effective skills management also helps improve cost flow — cutting back cost inefficiencies. It’s for this reason that Oli Meager from Skill Collective goes on to say skills management is more a “critical business initiative” than an HR initiative alone. Oli explains the resulting cost inefficiencies:
It could be organizations over hiring due to the poor visibility of internal talent or because you haven’t got a skills management system in place, which could lead to things like mismatched staffing and project staffing, which is going to lead to things like low job satisfaction and higher turnover rates.”
Oli notes that cost inefficiencies grow from a learning and development standpoint, too. Organizations may roll out expensive upskilling projects, but if those programs don’t target growing skills aligned with business priorities, they’ll only add to the expenses.
What you choose to define as a "skill" in your organization is completely up to you — you're creating a data system that should make it easy to manage human resources later on.
But in order for the skills inventory to make your work easier, your definition of what a “skill” is, and what skills are going to appear in your inventory, needs to be fit for purpose. These factors will depend on:
One thing to bear in mind here is to “make sure you have enough details to make an accurate assignment, but you don’t have too many [overwhelming] details,” Julie notes. Oli seconds this:
There's no point having 65,000 skills in your skills taxonomy. It just makes a system too complex to actually be useful. But at the same, you can’t be too basic, because you need to be able to go to a granular enough detail to match the right people to the right work.”
It’s a fine line of details to balance, and it ensures the skills inventory you make is both usable and manageable. Ultimately, your skills inventory’s ease of use is what’ll make it easy to update and maintain.
This sounds like a small consideration. But you’d be surprised how much of an impact this will have on whether your skills inventory flies or flops.
Anyone who adds to the skills inventory should be using agreed, standardized phrasing in order to keep things tidy and workable. Otherwise, searchability can be compromised, and cross-functional intelligibility will be extremely limited.
What does this look like in practice? Well, Oli has a great example of what it looks like when you’re getting it wrong:
If one system says I've got great ‘teamwork skills’, but then in another system it says ‘teaming’, and then another system calls it ‘working together with other people’...what you need to do is have this common language that can sit across all of those systems, so that those technology platforms can extract the skill data in the right way to drive a really common experience.”
When surveying people about their skills, be sure to specify their seniority levels and define their skills accordingly.
You could use either numbers (1-5) or words (beginner, intermediate, or advanced) to rate individuals’ expertise.
But once again, just be sure to keep things unified and simple. Julie notes:
Just like everything else in your skills inventory, you want to keep this kind of simple, I would say no more than five ratings to specific proficiency levels.”
Regardless of how you track proficiency levels, Oli points out the importance of being clear and specific with it:
The actual description of that proficiency level is more important than the proficiency level itself, because if we think we’re going to be self rating [or using peer rating, it can get very, very subjective, and that’s where you get inaccuracies of skill data. But if the description is very clear, it allows for more objectivity in that process.”
This will come in handy when you have complex projects that require several people with the same skill, but someone needs to take a junior hands-on role while their senior teammate does management and takes care of more strategic questions that require that same skill.
As a last but possibly most important step, you need to keep coming back to your skills inventory to make sure all information remains relevant.
Both Julie and Cyd emphasize the fact that the skills inventory will never be “one and done”. You will need to return to it regularly to update, iterate, and improve:
You should be updating this quarterly, so there's always room to make changes and to add,” recommends Julie, “And as you go through and you start using it more, you’ll maybe find things like obsolete technology, or a certain soft skill that you thought was really important, but you’re not using anymore. You can always delete those things. You can always add things. You know, this is a living, breathing document that will constantly change.”
And as your employees’ career paths progress, they will be upskilling and reskilling — and you need to keep track of the changing picture so your understanding of the talent pool remains strong.
A skills inventory can be anything from a simple list or an elaborate Excel sheet, to a sleek dashboard. The bigger your company and the bigger the resource pool, the more sophisticated and well-organized your inventory needs to get.
Skill inventories are not only used in the workplace, they also help people in their studies and overall self-development.
For HR professionals, for example, a skills inventory could be a list of skills they are looking for in a potential new hire. They can build their interview around it to see if the potential candidate checks off all the crucial boxes. If you're hiring someone for a managerial role, make an inventory of leadership skills you believe will help them succeed in that role within your company.
But skills inventories can be much more advanced, complex, and multifunctional if you want them to be used by different departments in the organization.
Let's take a closer look at Runn's skills inventory for a good reference.
Resource efficiency is not only about the way you manage people and their time — it is also about the hires that join your company and the skills they bring along with them.
