Skills Audit Best Practices: A Comprehensive Guide for HR and L&D Professionals

Every successful organization boasts a talented team with a rich array of skills and experience. Your people are your most valuable asset. 

But spotting those skills — and any that may be missing — isn’t easy. 

A skills audit is a great way to take stock of the skills within your organization and identify gaps to close in future. It’s both valuable and necessary work. But it’s also time consuming and labor intensive, requiring data and feedback from all corners of the organization.

As a result, too many audits are rushed, poorly executed, and quickly go out of date. 

This post gives you a better way to conduct skills audits. It looks first at the common process companies use, and offers some best practices to make it more effective in future. 

What is a skills audit?

A skills audit lets you analyze and assess your team’s current skills and competencies. This is useful at the individual level, for performance reviews and development plans. It’s also critical at the overall company level, to ensure you have the necessary capabilities to succeed in your market. 

Your audit can (and should) include hard skills like cold calling, software development, or scrum methodology — depending on the role, of course. You could also audit soft skills like negotiation, feedback, and time management. 

An audit makes sense once you have a clear skills ontology in place. If you know what’s required to succeed in each role (or for the company more broadly), an audit will uncover likely strengths and weaknesses. 

From there, you can build an employee development plan to address these. 

What are the benefits of a skills audit?

As a prerequisite to building a great organizational learning program, a skills audit is key to unlocking all the true benefits of L&D. But plenty of organizations skip this step and try to build employee training schemes through intuition or past experience. 

Here are the specific benefits of including an audit as you develop your training plan:

• Remove the guesswork. You might think you know the most-needed skills in your organization, but an audit is far more precise. 
• Find real areas of opportunity. Build an L&D plan based on real data, rather than a top-down plan built on best guesses. 
• Find fact-based reference points for career conversations. When employees want to know how they can grow into the next phase of their careers, managers can lean on facts.
• Have a comparison point for future audits. Hopefully your goal is to fill some of the skills gaps you find. An audit gives you a baseline. 

And a skills audit is useful beyond your learning and development plan. It can impact your hiring strategy and areas of investment, and may also inform core business strategy. If you discover hidden talents within the organization, this may provide the push to explore new markets or services. 

So while this post will focus mostly on impact on learning and development, L&D itself influences the entire business.

How to conduct an effective skills audit

Having just explored the steps involved, let’s look now at some of the keys to making this work most effective. 

1. Set objectives & define the scope

For L&D professionals, the purpose of a skills audit may already seem obvious. But you’ll need to partner with subject-matter experts, managers, and their teams, so it pays to set clear expectations. 

And the audit’s scope is also a key consideration. There are endless skills you could potentially evaluate at a granular level. While many (or all) of them might be valuable one day, the audit should focus on your most pressing issues now. 

Your audit should be efficient and completed in a timely manner. Clear objectives and a well-defined scope are essential. 

2. Get stakeholders excited

Your skills audit won’t get off the ground — let alone succeed — without the engagement and buy-in of other team members. You’re particularly reliant on subject-matter experts who’re crucial in defining the core skills and key differentiators in company roles. 

But as above, you’ll also need contributions from managers and their team members. Every stakeholder involved is busy and, if we’re being honest, has higher priorities on their list. Which is why it’s not enough to get them involved — you need to get them excited. 

L&D programs flourish most in a collaborative learning environment. Show them how this audit leads directly to higher-performing, more engaged, and more motivated team members. 

If you need more ammunition, share with them these reasons why L&D is so impactful on talent.

3. Refine your skills ontology

A well-defined skills ontology is really a prerequisite to conducting an audit. You need a list of relevant skills — and their definitions — before you can assess the extent to which they exist in the company. 

Assuming you’ve done this work in the past, it’s important to review and revise it before beginning the audit. Are the same skills still relevant, and have new ones emerged?

Your audit serves to measure the attainment of each skill in your ontology. So it only makes sense to have a clear ontology first. 

4. Develop a skills map

If you haven’t done this already, it’s also important to design a skills map for each team and/or role. This will essentially become the output of your audit: a clear map of the desired skills for each role, and the current level of attainment in each. 

Prior to the audit, this matrix will be more aspirational — where each team member would land in a perfect world. And the audit itself will reveal the truth about skills gaps (or lack thereof) across the organization. 

Your audit then gives you the actual attainment of each of these skills.

5. Start with a pilot group

The eventual goal is likely an audit of the entire company. But because this is a large and administratively complex task, that’s a lot of work. Before diving in with two feet, you need to be sure that your approach will work. 

Take a small group — perhaps one company unit with relatively uniform job descriptions. See how difficult it can be to audit even a few handfuls of people. 

• Do they understand (and complete) the survey(s)? 
• How many reminders and polite requests do you need to make? 
• Are the results useful? And do they seem credible?
• Will this same approach work on a broader scale? 
  

Getting others to buy in is a constant struggle for L&D leaders. An audit is no different, so it pays to start small. 

6. Design for repeatability

This is often overlooked, but incredibly important in any kind of research or analysis. A one-off audit might be helpful, but ongoing audits and updated skills matrices are far more valuable. 

As you build out this first installment, keep in mind that you’ll want regular follow ups and to keep reassessing skills gaps. What can you do to make this work as easy, fast, and ideally automated as possible? 

This is where modern tooling becomes so valuable. You can create a regular audit cadence, with updates and refreshes built into the workflow. 

We’ll explore tools in more detail — and AI in particular — shortly. 

How to identify skills gaps

We have an entire article dedicated to identifying skills gaps. To summarize it briefly, you have two main options. 

The traditional approach

The typical steps to finding skills gaps include: 

• Surveying team members and managers for their perceived skills gaps
• Conducting employee assessments and measuring their competencies
• Using company-wide KPIs and metrics to spot areas of opportunity or poor performance.
• Accessing external benchmarks and industry best practices
• Completing skills gap analyses, both for individuals and teams

These are all valid and useful, but each takes a significant amount of time and effort. In fact, the work can take so long to complete that it’s out of date when you launch into action. 

The AI-enabled approach

AI technology is advancing at breakneck speed to overhaul any manner of slow, manual work. And the traditional approach to skills audits (above) includes plenty of that. 

Generative AI and automation have virtually eliminated the hours of effort that go into identifying core skills and assessing their impact on your business. 

This manifests in the following ways:

• AI will identify the most likely skills gaps based on your roles, team experience, and tenure. It does the external benchmarking for you, instantly. 
• It also incorporates proprietary knowledge and your company’s goals and KPIs. Rather than a generic skills ontology, it’s based on your real roles, the institutional knowledge required, and what the company is working towards.
• It then analyzes these skills at the individual level. You get a more customized, tailored learning approach, without the sheer amount of effort this would normally take.
• The tools update skills gaps in real time. You never have an out-of-date skills strategy or action plan. 

Move past manual skills audits with AI-enhanced tools

Skills audits can be time consuming to conduct, and go out of date quickly. But as we just saw above, new AI tools can take most of the heavy lifting off your plate. 

Skills by 360Learning is a great example. Our AI-powered skills suite: 

• Maintains an organization-specific, dynamic skills ontology. Whether you use our industry-standard starting point or input your own.
• Maps key skills to your existing job descriptions automatically.
• Includes a Skills dashboard which shows you gaps to close, and finds subject-matter experts who can help.
• Helps you create standard benchmarks across the organization.

Most importantly, you don’t need to conduct regular or one-off skills audits. You have a clear inventory of skills and skill gaps in real time, which is always up to date. 

Executives can track the big picture at a glance, while HR and L&D teams can make specific plans to recruit new talent and upskills the teams you have. Everyone can focus on what they do best, and not on data entry or Excel sheets. 

Take a look around Skills by 360Learning today.