A skills audit identifies strengths and areas for improvement within a company, helping to align workforce capabilities with business goals. This article outlines key steps, benefits, and methods for conducting individual and group skills audits efficiently.
By Brad Nakase, Attorney
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In times of talent scarcity, it can be helpful to undertake a skills audit to identify the strengths and areas for improvement within your company.
Disruption from digitization, changes in work habits, and organizational structures all have an effect on how companies foster innovation while maintaining continuity of operations. Organizations must ensure that their workforce skills are up-to-date and improved, while also recruiting individuals with the necessary new abilities to navigate these changes.
In order to find out where an employee could use some training or improvement, a skills audit looks at their current set of abilities and knowledge. At the organizational level, a skills audit is a great way to get a feel for the current workforce’s strengths and areas for improvement by taking stock of everyone’s abilities. Later on in the piece, we’ll go over the two main categories of skills audits.
In most cases, a skills audit will involve an interview or questionnaire administered by HR. There are, however, a number of alternative places to look for data, such as archives, LMSs, certifications, performance records, etc.
An organization can greatly benefit from doing a skills audit to determine which abilities are now available and which ones are not. In many cases, workers possess abilities that their employer is blissfully unaware of and has thus far failed to capitalize on.
In times of organizational change, such a reorganization, a skills audit can be quite useful. To illustrate the point, picture a bank that is implementing new technology to do away with the need for tellers. You won’t need to know how to run a bank anymore. On the other hand, tech-savvy workers will be in high demand at the bank in the years to come.
You can find out what people already have the skills for and if they’re applicable to other parts of your company by conducting a skills audit. Expanding a company’s offering or penetrating new markets or areas also necessitates new skill sets.
Since businesses are always changing, it’s best to think of the skills audit as an ongoing process rather than a one-time exercise. The strategic focus of any HR team should include this crucial tool, rather than just conducting it. The goals and strategy of the company should also inform your skills audit.
To avoid wasting time and effort, HR professionals should differentiate between a skills audit and a training needs analysis.
Two sorts of skills audits are available to HR, as previously stated:
It is possible to gain an understanding of an individual’s degree of proficiency in a particular or general skill by conducting a personal skills audit. It brings to light any issue with the employee’s skill set.
Individuals might benefit from conducting personal skills audits when they are trying to figure out their ideal career path, starting a new job, or just trying to figure out how to improve themselves. It is also possible to include results from an individual skills audit into a group skills evaluation.
Conducting a skills audit on an entire team or company is known as a group skills audit. The most common usage for this tool is compiling a list of employees’ abilities at work.
The people on your team are not the same as they were 5 years or even a year ago. Changes in the workforce, employee turnover, and operational methods all impact the necessity for new skills. Therefore, a skills audit is most effective when:
An entirely new role emerges: human resources must now determine what new abilities are required of a position, as well as what qualities are ideal for a new recruit.
A worker takes on a new responsibility: If a person wants to be successful in their new position, they should conduct a personal skills audit to see where they excel and where they need improvement.
A member of staff switches departments: When a person moves laterally to a different department, it’s a good idea to check if their abilities are still applicable by doing a skills audit.
Special skills are needed for a new project: Determine whether team members have the necessary skills to successfully complete the project.
Within the framework of performance management: Employee development is the goal of any effective performance management program. To find out if a worker is falling short or going above and beyond, a skills audit is a good tool to use.
It takes time, energy, and excellent teamwork to complete a skills audit. Get the most out of a skills audit by summarizing and analyzing the data using technology.
For a better grasp of your company’s capabilities
Learn more about your employees’ skill sets, the relative importance of different departments’ skill sets, etc.
A wide variety of employees’ abilities may go unrecognized by the company, including supplementary abilities gained through education, work experience, or extracurricular activities. The company can make use of these underutilized assets.
In order to identify areas where people lack required abilities
Eighty-seven percent of businesses are aware of a skills gap or expect to see one in the near future. You can find out if there is a deficiency of skills in the company as a whole, in certain teams or divisions, by conducting a skills audit. Human resources and upper management are in a better position to make more strategic decisions about allocating resources to individual teams and projects.
Predicting outcomes also benefits from a skills evaluation. Take this scenario: some company’s products will use AI technology sometime in the next five years. Companies can start reskilling their employees sooner if they start identifying gaps in AI-related skills like data science, data management, coding, machine learning, etc.
To support your efforts to improve employee skills and knowledge
Human resources training and upskilling initiatives can greatly benefit from skills audit data. Make better use of ongoing efforts or concentrate on developing training programs for priority skills using this data.
In order to enhance the recruiting process
A skills audit can help you improve your hiring practices, among other things. Insights like these will help HR decide who to recruit to round out the team.
With this information, you may refine your hiring processes. Simply adding more “identical” people to your workforce won’t cut it if you’re in need of a specialist.
To improve the skills of an organization
Organizational capabilities (OC) are the intangible yet important assets that every company has built in its own special way. They allow the company to carry out its business strategy and keep satisfying its consumers.
An organization’s capacity to operate in its markets depends on the talents and abilities of its employees, especially in the area of operational capabilities. Over time, these qualities condense into what the corporation now calls its competitive edge.
Gaining and keeping a competitive advantage for a company depends on figuring out what kinds of skills go into these operational competencies.
To coordinate personal and group objectives
Organizations have been dealing with quickly evolving business environments in the last few years, which has led to the obsolescence of talents that were once considered vital. Picture this: you employ an events manager at the tail end of 2019 and all of a sudden you have to organize and carry out online gatherings.
Human resources can then conduct a skills audit to determine which abilities are essential for the new position and then provide the appropriate training to bring everyone on board with the company’s latest priorities.
The effort, time, and materials required to carry out a skills audit are substantial. Therefore, include stakeholders, a project manager, defined roles and duties, a timeline, and a set of goals while conducting the skills audit.
Think about the prospects, threats, and objectives of your company:
Just what kinds of difficulties are you encountering right now and going forward?
In what ways can your company expand its reach?
What is it that you hope to accomplish?
You can narrow your audit focus by knowing the answers to these questions.
To guarantee buy-in and engagement from the start, incorporate the correct stakeholders while creating goals. Although HR is providing support, this is more of a business necessity than an HR effort. Communicate with key opinion leaders across the whole company, from the front lines to the back end (in areas like operations, finance, IT, etc.).
When conducting a skills audit, do not define a broad scope. Auditing every single skill in your organization is pointless. The fact that you know which workers are proficient with typewriters is unlikely to benefit your company. Rather, you should first classify your organization’s strategies before defining the scope of your audit. Take this case in point:
Think about what kinds of data you’ll be collecting and include them in the scope.
To maintain consistency both now and in the future, it is best to use a competency framework when evaluating employees’ abilities. An organization’s competency model is a compilation of all the skills and knowledge needed to do a certain job. Your competency model provides human resources with a structure for analyzing skill gaps and developing your abilities.
One further tool for figuring out what a team or project needs in terms of abilities is a competency matrix. You may see the difference between the abilities and competences needed by a team and those that are available to you using this grid.
When doing the skills audit, there are a number of options for gathering data. To get useful insights, use a mix of the following:
Do one-on-one interviews with workers: Give them a list of questions to help you figure out what they’re good and bad at. In order to have a group-wide grasp of the abilities, make sure to use the same method with every employee. Although it may take some time, this method is effective.
Provide your staff a self-assessment questionnaire to fill out: Workers evaluate their own proficiency by placing a number on a scale. To encourage truthful responses from staff, it is helpful to provide explanations and examples. Employee honesty is essential when it comes to self-assessment surveys.
Gather existing data — You can gather data on employees that already exists, such as their training history, performance reviews, certifications, degrees, etc.
Offer a formal skills exam: To determine the talents needed by the organization, administer a formal skills test.
Start small, as with a single department or team, if you aren’t sure a skills audit would be useful or if you’re short on time. These findings can inform your decision to extend the audit to more teams and departments.
Get the proper authorization to gather data and set up safeguards to keep employees’ private information safe. The collection and use of data must adhere to stringent protocols and be in line with local legislation. Companies that undertake skill audits have a responsibility to safeguard their employees’ personal information and prevent its misuse. At the very least:
When gathering information about your employees, there is a certain order to things:
The outcomes of a skills audit can guide the development of initiatives for training, education, and skill enhancement, both in the near and far future. Enrolling your personnel in a workshop to improve their software skills is one short-term option. Over the long run, you can work on ways to enhance training for new hires or create more accurate tests to use during the hiring process.
The skills audit can also include making an evaluation report. In a nutshell, this report could state:
Share this data with the recruiting team and hiring managers so that they can address the audit-identified skill gaps in their existing recruiting efforts.
You may better plan for the future of your company’s leadership, identify and fill skill shortages before they become an issue, and get a better picture of how your staff should advance professionally with an accurate and current skills inventory.
When you’re auditing employees’ abilities, don’t forget to include HR. You may increase your HR team’s key competencies and prepare them for the future by conducting an audit of their current skill sets.
Since they will be the ones to spearhead the audit, your HR department is a good place to start before spreading it to other divisions. This will guarantee that the audit team has the expertise to carry out the audit (such as knowledge of how to conduct interviews, gather and analyze data, handle conflicts, etc.).
When it comes to hiring, training, and upskilling, a skills audit is a great tool to have at your disposal. You can use the tool to train your staff in areas that will benefit the company as a whole. This will allow your company to acquire the operational capabilities necessary to get a competitive edge.
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