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Shannon Toe

What is a Skills Inventory? An All-Inclusive Guide

Missing people's skills on projects and finding it difficult to assign the right people to complete work? A skills inventory comes to the rescue.

Skills inventory is a game-changer for companies trying to effectively and efficiently manage their resources and build a powerful workforce. It's one of those things that are cross-functional — it can be used by many departments within a company and will usually bring both financial and non-financial benefits.

So what is a skills inventory and how can you leverage it to increase your company's outputs? We'll be breaking this down step by step.

What is a skills inventory?

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 at what level.

skills inventories that show employees skills

Why a skills inventory is important for strategic HR planning

Skills inventory brings order where there's chaos, and it is something many people within an organization can use, from resource managers to individual employees and HR professionals.

Here, we're going to elaborate on the things a skills inventory can bring to people in recruitment.

Facilitates better recruitment decisions

Most companies hire by role and someone's seniority within that role, but the effectiveness of that strategy leaves a lot of questions behind. Hiring by skills and their levels, however, is a different approach. One that comes from the angle of successful project deliveries instead of an 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.

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.

Simplifies skills gap analysis

As a rule, HR professionals work with qualitative data — they can interview people, gather feedback, and assess someone for cultural fit. But those things rarely guarantee strategic success. Using a skills inventory means bringing more specifics to the table — 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.

Needless to say, matching the dots becomes much easier. If there is a resource manager who made a list of skills required to deliver the project, conducting a skills gap analysis to pinpoint the missing skills and their levels is a matter of seconds — and that's your recruitment plan right there.

Identifies reskilling and upskilling opportunities

Hiring new people is not always an option. Sometimes there is no budget, sometimes there is no time, and sometimes HRs simply have no availability to take on another open 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 and just need a bit more training to meet the required seniority level. 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.

Resource optimization is a resourcing strategy for businesses trying to grow above their competition.

➡️ Related: What Is Upskilling & How it Can Future-Proof Your Business

Makes succession planning bulletproof

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, which can easily derail the company's projects. When this scenario comes to life, looking for a replacement can take months, even if you prioritize recruitment for that role.

Succession planning, which heavily relies on skills inventories, helps you spot 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 story, skills inventory helps you spot that succession candidate within a few minutes.

Improves employee motivation and morale

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:

How to manage a skills inventory

Create a list of skills

certain skills listed out in a skills inventory

Once you have a rough draft of the project and the skills required to complete it, go to your inventory to list all of those skills out.

For example, if you are working on a project like designing a new website, you need someone with UI/UX skills to create the design, Figma knowledge to visualize it, copywriting skills to create content that sells there, etc. Add seniority levels to specify just how much expertise you will expect your resources to have.

What you choose to define as a "skill" is completely up to you — you're creating something of a data system that should make it easy to manage human resources later on.

Match skills to people

Once that skills list is created, you are ready to see whether you have enough people with the right skill sets. This exercise will also help you uncover the weak spots in your talent pool (skills gaps).

If you don't have this information available at hand, ask your resources to list out their skills and update your inventory accordingly. When adding resources to projects, you usually start with their roles, and some managers stop there altogether. But in order to ensure strategic capacity planning, you need to have that granular view of each employee's case.

Identify expertise levels

This step speaks for itself and is usually fairly easy to complete if you're using a system built to manage skills-related information. When surveying people about their skills, be sure to specify their seniority levels and define their skills accordingly.

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.

Continuously track and update skills information

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.

As their career paths unravel, your people will be upskilling and reskilling — and you need to keep track of the changing picture so your understanding of the talent pool remains strong.

Skills inventory example

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.

Closing thoughts

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.

Try your free 14-day trial with Runn today — your skills inventory is only a few clicks away!

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