Skills Management That Scales: All You Need to Know

A huge part of making sure that your service business succeeds today is skills management. But what is skills management and how can you map your employee's skills in a tangible way?
Mae Angeline
June 27, 2022

Since the pandemic hit the world in 2019, the corporate sands have shifted massively. According to McKinsey, 50% of leaders are now facing business problems due to an unforeseen skills gap. Becoming better at skills management is now a must to surface hidden upskilling and reskilling opportunities and keep the business afloat. But where do you start? We've answered this question and many more in our complete guide. Read on. 

First things first, what is skills management?

Skills management is a process that allows you to catalog, organize, and track the skills of your workforce. Importantly, it provides you with information about what skills exist within your organization and where they are needed most. This way you can understand whether there are any gaps in your workforce and how to fill them.

A proper skills management process will help you keep tabs on your team's expertise and assign tasks to the right people, rather than on an ad hoc basis. Because you will match people with projects they are passionate about and competent enough to handle, you'll experience a new level of creative energy from your workforce. 

All in all, skills management is an ongoing process that helps you:

  • Identify required competencies needed for success in your organization or department
  • Assess employee performance against these competencies
  • Identify gaps between current and desired capabilities
  • Develop plans for addressing any identified gaps or weaknesses

When you know where you're falling behind, you can also identify potential training opportunities and develop strategies to help your employees improve their skills. 

Alongside that, skills management done right has many benefits. 

The benefits of skills management

The benefits of skills management are numerous. Here are some of them:

1. Locating the right fit for the project

For one thing, skills management is essential in helping you match people to projects. The employee profile will make it easy for you to know who is suitable and available for any particular task at hand and who isn't.

It's important to have a clear picture of what each employee can do and what their limitations are. This way, you can better plan your workload and assign tasks accordingly. Do you have someone who excels at writing but has zero organizational skills? Then don't give them the responsibility of managing schedules or keeping track of deadlines!

2. Determining skills gaps in your workforce

The skills gap is the difference between the skills required for a job and the skills that someone has. 

The costs of dealing with an understaffed team can be high. When you're short-staffed, there's increased pressure on existing employees, which can lead to burnout. You may also experience delays in your projects or see quality slip. Your company could also get a bad reputation for not meeting deadlines or delivering on commitments.

When your team has gaps in skills, it's important to address them quickly. Otherwise, they'll affect productivity and impact your bottom line.

When putting together a team, skills management will help you identify missing vital skills. You can close the skill gap by either training an in-house employee, hiring a qualified employee, or hiring an independent contractor.

3. Keeping up with the demand

According to McKinsey, the next 10 years will see fundamental changes to the working world, and employees will need to acquire new skills to remain successful.

Skill management gives you an accurate picture of your team's skills, which ones they need to develop, and how long it will take to learn them. With this information, it's easy to predict how many hours of work your team will use to complete a project in a given period, so you can keep up with the demand.

As your company grows and you add new employees, you need to ensure that they're trained on the latest skills required by your industry. If you're not keeping up with the latest trends and technologies, your competitors will have an added advantage over you.

4. Providing relevant training

Training is one of the best investments you can make in your employees' careers. They gain experience and knowledge directly applicable to their jobs, and become more valuable members of your team. Employees who see good opportunities to learn and grow are known to be 2.9 times more likely to be engaged, HBR reports. Companies with high employee engagement, in turn, are known to be 21% more profitable. It also means your team is prepared for specific tasks the business needs in the future, which will save time looking for other employees when the need arises.

Employees trained to improve their skills usually have higher motivation, are more likely to be more productive, and deliver quality work. Training helps you retain your current employees and attract new ones by showcasing your company as an employer of choice.

5. Diversifying workforce

From a business perspective, skills management can help you develop a more diverse workforce that is better equipped to deal with the changing needs of your business. People don't change as quickly as the market, so you have to be prepared to address demand with different skill sets. If you have all your eggs in one basket, when that basket breaks, so does your business model.

From an employee perspective, skills management offers valuable benefits such as career progression and development opportunities.

6. Finding replacements quickly and easily

If you have a good understanding of what skills are needed and where they are missing, then it's easier to find candidates who can fill those roles. This is particularly important if you're hiring for a highly technical role or one that requires specific experience.

Skills management will help you scout for new talent to replace an employee on sick leave, parental leave, or after someone left. In this way, you will safeguard organizational continuity and stick to your deadlines.

7. Improving employee productivity

As we've mentioned, employees that get to use and improve their skills are more engaged. This translates into increased productivity, which leads to higher profits for your business.

That's why it's so important to encourage employees to take on new challenges and learn new things - it will be a boon for your company in the long run!

8. Reducing employee turnover

Lack of skills can lead to low morale among employees who feel like they're being held back from reaching their full potential at work.

Allowing employees to develop their skills, in turn, helps them feel more satisfied with their jobs and more loyal towards your company. If they feel like they are growing within their position, they will be more likely to stay with your company for a longer period of time — which means less employee turnover in general!

Effective leaders understand the importance of identifying and nurturing the skills base of their team. Good training programs can help ensure that new hires don't leave after just a few months because they weren't qualified enough.

9. Preventing bottlenecks

You'll be able to avoid bottlenecks if you know what capabilities are necessary at each project level. This can be done by ensuring enough time for staff members to complete their tasks or bringing in additional staff members. In some cases, you may even need to outsource some work if it becomes too complex or time-consuming for employees within your company.

10. Creating better timelines

You may be asking yourself, "How does skills management offer flexibility in planning timelines?" Knowing exactly how many people will be working on each stage of your project and their level of expertise can make planning timelines much more straightforward than if everything were left open-ended.

How to improve the skills management process

The skills management process means using tools and techniques to identify, assess, improve, and manage the skills of team members as they work on projects. As a result, you will have a plan for every skill that each member may require at any given time. 

This process is helpful when screening candidates before hiring them or even during training sessions. It is also used for determining what other training needs employees have so they can grow professionally through continuous learning.

The skills management process is an integral part of the HR function, and it is a complex and integrated area that covers recruitment, selection, and development. If you want to get the best out of your employees, you need to understand how to manage their skills effectively.

The following are some tips for improving your skills management process:

1. Assess the supply of the current skills

One way to get a clear picture of your employees' competencies and expertise is by creating profiles that match relevant skills to employees and show their qualifications and experience. Employee profiles will let you know if a particular employee is qualified enough to handle a specific task or whether they are an expert in the field. Remember to keep their profiles updated so you are current with their skills.

2. Scout for skills in demand

Now that you created your employee profiles with their roles, skills, and competencies, it's time to look closer and see which skills are overutilized. Most likely, they are in high demand. Another way to do it is to ask yourself two important questions:

  • How many tentative projects with placeholders for new roles do you have in your pipeline? 
  • What is the chance of closing new deals? 

Doing a bit of scenario planning can take you a long way to assess skills gaps in advance. 

3. Compare the company's current skills with the demand

What insights can you surface, comparing the skillsets that you have to the ones in demand? What has changed business-wide? 

4. Look inward

Every business has a low-hanging opportunity to reskill or upskill the workforce that has been sitting on the bench or underperforming instead of hiring new people. According to a WEF cost-benefit study, it is in the best interest of American firms to upskill at least 25% of workers who face job loss. 

Research proves it's a lot faster and cheaper to engage employees in development and training programs than look for talent outside. Gallup proved that the costs of upskilling aren't as significant as hiring and onboarding someone new, The average cost of employing a new person in the United States is $4,425, which includes recruiting and advertising expenses, TechTarget has found.

5. Use one platform for skills management and resource planning

It's not just your team who need a range of skills: your project manager's planning skills will either make or break the project. One of the best ways to do this in practice is to use an effective tool for skills management and resource planning.

A successful manager knows how important it is to have the right people. A lack of staff or a mismatch between what your organization needs and what candidates can offer can negatively affect productivity and profits. Influential leaders understand this and use tools that help them with skills management.

In the leadership role, it is vital to have access to accurate data on your workforce—not just related to their skills but also their availability to plan and avoid bottlenecks or gaps in service delivery.

Using one platform for skills management and resource planning helps you get the most out of your workforce. It also allows you to work with all the information in one place, making it easier to manage your workforce. You won't have to juggle between different tools to know who is available or who has the particular skills you need.

When you can see the availability of your staff, you can make informed decisions about hiring new people, training existing staff members, and working with contractors.

Here is a recap of why you need to use a single tool for skills management:

  • It's easy to schedule staff when you have a single place where all your employees' availability is visible.
  • You can reduce the amount of time you spend scheduling by using automated rules based on an employee's availability, skill level, and other factors.
  • You can better understand your workforce by performing resource analysis, such as considering how many hours each employee is working and how often they're getting booked.
  • You can better manage heavy workloads to determine which employees are assigned to each job.

One of the most critical challenges for HR and talent management professionals is how to develop a talent pipeline that can meet the ever-changing needs of your business. Combining skills management with a resource management system helps you plan your tasks and know whether you need to hire outsiders for the job or train your team. This will help you fill any gaps or bottlenecks that may hinder the success of your business.

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