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Hannah Taylor

How to Create a Skills Matrix in 6 Steps

Help your employees shine! Use a skills matrix to understand where they are at their best, how they want to upskill, and where they are able to coach others.

Every employee has a unique set of skills, capabilities, and experiences that they can leverage in their work. So, if your business doesn’t have a systematic approach to identifying and measuring these skills, you’re missing a trick.

Understanding exactly what each team member brings to the table can help your HR team identify skill gaps, aid your resource manager in matching talent to projects, and much more.

In this article, we’re exploring skills matrices, their benefits and challenges, and how to create a powerful skills matrix that supports workforce development.

What is a skills matrix?

A skills matrix is a valuable tool HR professionals use to track employees’ skills and competencies. This handy yet deceptively simple tool creates a searchable database of each individual and team’s skills, qualifications, experience, and proficiency.

Skill matrices are often used in HR teams to support skills management by creating a visual representation of skills gaps to be filled or the competencies required for specific job roles. 

They’re also popular among resource managers as they make it easy to identify which team members have the right skills to take on specific projects or tasks.

How does a skills matrix work?

Skills matrices are built as grids, with your company’s team members listed on one axis and its list of skills on the other.

The grid is populated with numbers representing your employees’ proficiency in each skill, with levels ranging from 1 (no proficiency) to 4 (advanced proficiency).

As a bonus, you can also add a column to track employees’ interest levels - this can help inform decisions about training programs and upskilling opportunities that align with your employees' professional development goals.

Skills matrix example

Not clear how a skills matrix might look? Well, here's an example of a skill matrix mapped into Runn.

Notice how each skill has a level assigned, which indicates the employee's level of competency in that skill.

Need a developer who's confident using Javascript? You're best bet in this org would be Bob Dylan 🎸

Case study: a skills matrix in practice

In a recent webinar, we caught up with Sarah Koegler and Tabea Soriano, seasoned transformation consultants from the future-of-work consultancy The Ready.

The Ready is renowned for experimenting with new methodologies in order to break away from the status quo of organizational design. And one of the methods they've put into play is skills-based project staffing - underpinned by skills matrices.

So, what does this look like in practice?

Well, it started when the team decided that they wanted to be able to align staffing efforts through better quality information about everyone's skills:

We went through a process where we identified the ten core skills we think are most relevant and important to our consultants, and people assessed themselves [against that]...we got really clear about what good looks like... and gave everyone an opportunity to map themselves to those skills." - Sarah Koegler, Transformation Consultant

For The Ready, these core skills include coaching, self-management, sales, facilitation, project leadership, and organizational design expertise. Consultants rate themselves from Beginner to Expert against these skills.

Following on from this self-assessment process, the team works together to peer-view the assessments and give feedback. This works best, Sarah notes, when you get a diverse range of opinions "from people who work like you, but also people who don't work like you!"

Once this process is complete, the skills profile is agreed (subject to an annual review), and is used in The Ready's staffing process - which is largely self-directed, based on matching skills suitability to the needs of incoming projects.

This means that rather than having a manager allocate them to a project, The Ready's consultants can raise their hands to be put onto different projects, based on their skills matrix and the skills required to be successful on a certain project.

This way, rather than filling incoming projects from the bench in a kind of "first in, first out" manner, we have a marketplace that allows for a little bit more agency in terms of individuals picking what projects they want to work on." - Tabea Soriano, Head of Transformation

Autonomy and self-management are important principles at The Ready, and introducing this method of skills-based staffing has only helped drive these home.

Using skills matrices also means that professional development and upskilling opportunities are always in the conversation. If people identify a particular skill that they want to develop, they can seek out opportunities where they will be working alongside someone more expert than them, for example.

Want to learn more? ➡️ What We Like About The Ready's Staffing Model.

The benefits of creating skills matrices for your team

At first glance, skills matrices have one obvious benefit: creating a searchable database of your workforce’s skills and competencies. That’s just the tip of the iceberg. Here are six surprising benefits of skills matrices.

Remove subjectivity

Hiring and firing decisions have the power to change lives, so it’s important that they are made as objectively as possible. Yet, assessing skill levels and competencies is largely subjective — when you don't have the right tools to support the assessment process.

Building a skills matrix helps remove subjectivity, providing a standardized method of measuring aptitude.

Plus, a skills matrix provides greater visibility of what skills are required for what roles, allowing team members to be objective when they're not assigned to a particular project or granted a promotion.

Informs skills tracking

Skills tracking — the process of documenting and evaluating the various skills employees possess — helps businesses with workforce planning, including identifying training needs and informing employee development initiatives, and even impacts resource allocation.

Your skills matrix provides a foundation for this process and a baseline against which progress is measured.

Identify skills gaps — and fix them

Skills gap analysis is a clever way to identify gaps between your employees’ skills and the core competencies the business needs to deliver successful outcomes to clients.

With up-to-date information on your workforce’s skill sets at their fingertips, your HR team can easily identify which missing skills aren’t currently being fulfilled.

HR teams can then use this data to inform the creation of development programs aimed at upskilling existing employees or plugging skills gaps through the hiring process. This will result in a more highly skilled workforce and better outcomes for all.

Supporting recognition and wellbeing

What’s more, building a skills matrix makes it easy to identify your most skilled employees and those who develop the most over time. This makes it easy to reward your most valuable employees, creating a culture of recognition and happier employees.

Uncover opportunities

A skills matrix also reveals opportunities for employees to improve their skills. Your HR department can use this data to plan training initiatives while individual employees are invited to consider alternative ways to apply their skills, opening up opportunities to take on new challenges.

On the impact of skills matrices on resourcing at The Ready, Sarah and Tabea say, “This skills matrix is allowing us to talk about our different skill profiles and how we want them to change and then finding partnerships or projects where it’s safe to go in and try to practice that skill.”

Optimized resourcing and improved client outcomes

Sarah points out, “If our skills matrix is working, we’re staffing strategically on projects, and we’re giving people an opportunity to go where they want to learn, we should see client outcomes improve.”

In addition to a baseline level of skill expected across the workforce, understanding each employee’s specialized skills and experience allows resource managers to match individuals to clients and projects strategically.

The challenges of building a skills matrix

Skills matrices may seem simple enough, but building an effective matrix doesn’t come without its challenges.

Keeping it manageable yet relevant

Maintaining your skills matrix is easy — if your industry never evolves. However, in today’s digital world, few industries are still considered slow-moving.

Keeping your matrix relevant is especially difficult in high-growth environments or industries where requirements are constantly changing, such as the IT and software industries, where employees are expected to keep up with evolving technologies.

A time-consuming process

Developing an effective matrix requires time and effort. This can feel overwhelming when you don’t have a plan, but what’s important is that you start the process. As Sarah puts it, “If you’re waiting for it to be perfect, you’re never going to start.”

Luckily, in the next section, we’ll walk you through the steps to create a comprehensive skills matrix.

Subjectivity in standards

Assigning an employee a skill level is a subjective judgment. What one team lead considers to be a great level of skill may not register on another’s radar.

We recommend agreeing on a process for assessing skill levels ahead of time to avoid creating an inconsistent system.

How to create a skills matrix

Now, let’s get into what you’re here for — the nitty-gritty of creating a detailed, effective, and flexible skills matrix.

Define the core skills each team, role, and employee needs

Your first step is to define what skills a particular role or team requires to achieve their goals. This will include listing the core skills critical to success and additional nice-to-haves.

There are countless skills you can track in your competency matrix depending on your industry, business objectives, and target clients. The types of skills you’ll include can be broken down into these categories:

  • Soft skills: essential skills, e.g., communication, conflict resolution, team leadership
  • Hard or technical skills: role-specific skills, e.g., Javascript, copywriting, Photoshop, Trello
  • Qualifications: educational or professional qualifications, e.g., Bachelor’s degrees, industry courses, leadership training
  • Languages: written and spoken languages, e.g., English, French, German
  • Experience: proven experience working on specific projects (e.g., eCommerce) or with specific industries (e.g., FMCG)

Your first port of call should be collaborating with team leaders to understand the skills required and expectations for each role. For example, a software engineer must be skilled in programming languages, development methodologies, database management, testing, and more. Team leaders may also look for nice-to-haves such as project management experience or an understanding of AI.

Create a skills inventory

Your skills inventory acts as a digital record of all the relevant skills, experience, and qualifications present across the organization.

Using a handy skills management software like Runn to keep track of your organization’s skills makes this process a breeze. You could use a spreadsheet (that’s your prerogative), but a purpose-built digital tool provides greater connectivity with resourcing and supports report generation using up-to-date information.

With Runn, you can set up as many skills as you like, and there’s no limit to the number of skills an employee can be assigned. Plus, you can easily add more skills as requirements change or delete those you no longer need.

Decide on a rating system

Deciding on a clear rating system before you move on to the next step can nip potential issues in the bud, helping avoid biases or subjectivity. We like using a 1 to 4 rating scale, which breaks down as:

  1. No competency
  2. Basic competency
  3. Intermediate competency
  4. Advanced competency

Assess employees’ skill levels

Assessing your employees’ skill levels is potentially the most challenging and time-consuming part of this process, but it’s worth it in the long run.

We've broken down several ways to assess competency below. Remember, you can always use a mix of these methods, depending on what works best.

  • Manager feedback
  • Self-evaluation
  • Peer feedback
  • 360-reviews (taking into account all of the above)
  • Graded skills assessment or tests

Add your data

Using the skills matrix template above, map out each employee on one axis, with your skills on the other. Assign each employee the skill level you determined in the previous step, and voila, you've successfully created a skills matrix!

Don’t forget to update your matrix

After all that work, don’t forget to update your skills matrix regularly. This tool works best when it’s regularly reviewed, as business growth, shifting client needs, and emergent technologies can change your teams' priorities.

Decide on a review cadence that works for your organization - but remember, whether you review your matrix once a month or once a year, what's important is that you don't let it stagnate!

Create a skills matrix today

Using a skills management tool like Runn makes this process ridiculously easy with intelligent, responsive reports filtered by skill, team, and even skill level.

Try these handy skills management and reporting features for free today! ➡️

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