Skills Inventory: Definition, Purpose & Steps to Create

A skills inventory is a powerful tool that compiles the work-based and educational information of your employees. It serves as a strategic asset, enabling you and your company to:

• Make progress on your corporate strategy
• Equip workforce to adapt to changes
• Enhance workforce performance
• Help attain business goals
• Operate business efficiently

This article will dive deeper into everything you need to know about skills inventory and the top skills assessment tools to measure them.

What is Skills Inventory?

A skills inventory is a centralized database that records the skills, qualifications, and experiences of employees within an organization. It details both technical and soft skills, educational background, certifications, and work history. By maintaining an updated skills inventory, organizations can assess workforce capabilities and identify areas for improvement.

Importance of a Skills Inventory for Organizations

It is vital for strategic workforce planning, aligning talent management with business objectives. It helps identify skills gaps, streamline talent acquisition, and tailor training programs to current and future needs. Additionally, it supports succession planning by identifying high-potential employees for leadership roles.

A centralized skills inventory enhances decision-making, employee development, and organizational agility. For more insights on the benefits of a skills inventory.

Key components of a Skills Inventory

A skills inventory encompasses various elements that provide a comprehensive overview of employee capabilities. These components include:

1. Work Experience: Includes past and current job roles, responsibilities, and industry exposure, offering insights into an employee's professional journey.
2. Educational Qualifications: Captures formal education credentials, degrees, and academic achievements, highlighting the foundational knowledge of employees.
3. Licenses: Encompasses official permissions granted by regulatory bodies, such as professional certifications, ensuring compliance and expertise.
4. Certifications: Represents industry-recognized credentials that validate expertise in specific skills, like PMP or AWS Certified Solutions Architect.
5. Soft Skills: Focuses on interpersonal abilities such as communication, leadership, teamwork, and problem-solving, essential for effective collaboration.
6. Hard Skills & Training Attended: Covers technical competencies and specific skills acquired through education or training programs, crucial for job performance.
7. Skilled Hobbies: Includes personal activities that contribute to professional skills, such as coding, blogging, or graphic design, showcasing diverse talents.

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Purpose of a Skills Inventory

A well-maintained skills inventory serves multiple strategic purposes within an organization:

• Strategic Planning: Helps organizations determine if current employees can meet company goals, aligning workforce capabilities with business objectives.
• Training and Upskilling: Identifies areas where investment in training is needed to fill skill gaps, ensuring continuous employee development.
• Hiring: Assists in identifying future hiring needs by pinpointing skills shortages, guiding talent acquisition strategies.
• Task Delegation: Facilitates the delegation of tasks to the most suitable individuals, optimizing productivity and efficiency.
• Team Building: Supports the creation of strong teams by matching complementary skills and fostering collaboration.

How can you create a Skills Inventory?

Before your company traverses the extra mile to create a skills inventory, it is essential to understand why your organization needs one.

So, take your time and ask why your company need a skills inventory. What will be its purpose?

To answer these queries, you must first work on your company’s objectives and ensure they align well with your business goals and requirements.

While creating a skills inventory for your company, ensure that you are not concentrating on static skills. Instead, it is best to align it with the ever-changing skills needs.  

However, creating such an agile and dynamic skills inventory is no small feat.

Therefore, instead of turning over every stone, it can be in your best interest to prioritize skills and competencies that can enhance your company’s business strategies in the short-term and long term.

It indeed sounds a bit intriguing.

But, in reality, this isn’t that bad. In most cases, you won’t be starting from scratch. This is because your company already has a lot of information regarding its employees in the HRMS, talent reviews, portfolios, project management databases, etc.

And nowadays, you can rely upon artificial intelligence to create skills inventories, as traditional methods are time-consuming, expensive, and can get outdated in no time.

As a starting point, your company can begin with general skills and then move forward into the specifics while identifying the skills crucial for your organization. And these skills will vary based on your business type, industry and the growth plans for your company.

Anyway, collecting your employees’ skills data through different sources is essential, striving to avoid discrepancies and bring in consistency. It can be highly beneficial to rely on skills intelligence. It is because skills taxonomies present within it can facilitate you with the relevant terminologies and languages to bring forth consistency in skill names and descriptions.

Skills data of your employees can include self-assessment data, manager’s assessment, social data (including LinkedIn, GitHub), internal system data (including project history), and validated skills via skills assessments.

In self-assessments and manager’s assessments, there can be subjective and/or objective approaches.

In a subjective approach, your employees or managers can mark the proficiencies at different levels (for instance, you can have it as beginner, intermediate, proficient). But accuracy can be a concern.

Coming to an objective approach, your employees or their managers must validate the skills mentioned with relevant project-based scenarios, focusing on how they have applied these skills fruitfully. Similarly, your company can further validate the skills by conducting assessments from which you can obtain measurable results and analytics.

Once your organization has collated your employees’ skills data, you can analyze it and measure their results with a systematic approach. Besides, you can make the best out of it and attain your business goals by seeking the assistance of skills intelligence.

What a Skills Inventory for IT looks like

In the IT industry, a skills inventory can be customized to reflect the specific demands and future trends of the sector. Here are some illustrative examples:

1. Technical Proficiencies: This includes programming languages like Python, Java, or C++, as well as expertise in cloud platforms such as AWS or Azure, and familiarity with DevOps tools like Jenkins or Docker.
2. Certifications: Industry-recognized certifications such as Certified Information Systems Security Professional (CISSP), Microsoft Certified: Azure Solutions Architect, or Cisco Certified Network Associate (CCNA) validate an employee's technical skills.
3. Project Management Skills: Proficiency in methodologies like Agile, Scrum, or Kanban, and tools such as JIRA or Trello, which are essential for managing IT projects efficiently.
4. Cybersecurity Skills: Knowledge of network security, ethical hacking, and threat analysis, which are crucial for protecting organizational data.
5. Data Analysis and Management: Skills in handling big data technologies like Hadoop or Spark, and expertise in database management systems like SQL or MongoDB.
6. Software Development Lifecycle Understanding: Familiarity with the full cycle of software development, from requirements gathering to deployment and maintenance.
7. Innovative Problem-Solving: The ability to troubleshoot and resolve complex technical issues, often requiring creative and out-of-the-box thinking.
8. Collaboration and Communication: Effective communication skills for working in cross-functional teams, often necessary in IT project environments.

Role of Skills Inventory in achieving Skills Intelligence

Consider a skills inventory as a map and skills intelligence as the GPS that guides you. A tech company, for example, uses its skills inventory to identify employees with emerging technical skills crucial for an upcoming project. By leveraging skills intelligence, they pinpoint team members with overlapping skills who can be quickly upskilled to meet project demands. This proactive approach reduces the need for external hiring and accelerates project timelines.

Similarly, a retail chain utilizes its skills inventory to analyze the soft skills of its workforce. Skills intelligence reveals that employees with strong customer service skills can be cross-trained to improve sales performance. As a result, the company enhances customer satisfaction and boosts sales, demonstrating how a well-managed skills inventory can drive better business outcomes.

Conclusion

To conclude, skills inventory significantly enhances your business on different levels, primarily when used with iMocha Skills Intelligence. It can assist in various funnels of human resource management, ranging from recruitment to employee retention. These factors can help your company steer through challenging times as well as build a future-focused skill-first workplace.

FAQs

What are the best methods for collecting skills data?

Surveys, self-assessments, manager evaluations, and skills assessments are effective methods for gathering comprehensive skills data from employees.

What tools are used to create and manage a skills inventory?

HR software, centralized databases, and AI-powered Skills Intelligence platforms are commonly used tools for creating and managing skills inventories.

What are the challenges of maintaining a skills inventory?

Challenges include keeping data updated, ensuring accuracy, and integrating with other HR systems efficiently.