Skills Management: A Guide for L&D Leaders

Staying competitive means evolving to meet new challenges. For learning and development (L&D) experts, effective skills management is crucial. This process ensures your workforce has the right skills to tackle current and future demands.

Which directly drives organizational success.

Thorough skills assessments let L&D professionals make informed decisions about training, recruitment, and development. But this process isn’t easy, and keeping your strategy up-to-date can be just as challenging.

This guide explores the nuances of skills management, from assessment methods to strategic implementation. You’ll find the tools and insights needed to build a resilient, future-ready workforce.

What is skills management?

Skills management is the process of developing and matching employee skills with the needs of the organization. Done well, the process is ongoing and iterative, evolving to meet the new demands in your particular industry and the wider business world.

It typically involves a structured framework that helps to measure skill attainment among team members. This in turn lets you set out action plans (evaluation, training, recruitment) to keep developing employee skills.

Types of skills

The most important skills to manage and monitor will depend on your business goals and organizational structure. These could include:

• Hard skills, typically including technical know-how to execute a given role.
• Soft skills, including emotional intelligence and interpersonal skills needed to function in a modern business.
• Proprietary skills, which are specific to your organization and must be developed on the job. These might include detailed product knowledge, in-house certifications, and mastery of your systems and processes.
• Transferable skills, which are valuable in any business, and often in virtually any job position. Examples include project management, strategic thinking, and computer skills (especially Excel spreadsheets).

Your skills management plan will include a mix of the above. Some will be equally important for all team members, while others will be role-specific.

Why does skills management matter?

Today, upskilling and reskilling are crucial aims for L&D professionals. Organizational goals and job-specific requirements keep changing, and companies can’t afford to rest on their laurels.

You may have a highly-skilled, top-performing team in place today. But two reasons to think twice:

1. How do you know that’s the case if you can’t measure and manage skills?
2. How will you maintain that level as employees come and go, roles are created and discontinued, and the business itself evolves?

And fundamentally, companies need new skill sets to remain competitive. Industries are constantly upended and disrupted by emerging technologies and ways of working. You must adapt to survive and thrive.

And successfully doing so requires effective skills management.

How to assess employee skills

A skills-based approach to learning requires an accurate understanding of the skills you have in the organization. Both at the individual employee level and across the business.

A skills audit is a good starting place. This lets you define the skill sets you need in each department, and then determine whether or not you have them in place.

Skills assessments should also be built into performance reviews, to help individual employees develop and perform in their roles. Some of the most common ways to assess employee skills include:

• Testing. Many industries have standardized tests for the technical skills required in core roles. But you can easily build course work and tests for your own organization, tailored to each role and experience level. This is essential if you want to have impartial, objective skills assessments.
• Self-assessments by the employee. These are best done prior to the assessment interview (below), to let the employee reflect honestly on their level of attainment, and where they’d like to focus on improving.
• Managerial assessments. Also done prior to discussing with the employee, these let managers evaluate employees’ skills related to expectations and job performance.
• Individual assessment interviews. Similar to your typical performance reviews, these let the employee and their manager review their learning objectives, agree on the current skill level, and create a plan of action.
• Professional interview. Some companies will have a consultant or HR leader discuss skills with employees for a third-party perspective.

These interviews and assessments can then feed into a more formal skills matrix. This is a record of the current skills levels by team, role, and across the company.

Why assess skills?

Good skills management lets you make the most of your human capital. And good skills assessments let you objectively chart the skills levels and competencies you have in-house.

They’re also a great way to help each employee own their own career progression. Skills assessments show them where they are today (versus where they would ideally be), and what specific skills should be prioritized in their development plan.

Most importantly, well-designed assessments create objectivity. Performance and aptitude should be judged impartially, and not just using a manager’s opinions and perceptions.

For the business as a whole, assessments provide a few further advantages:

• Detecting talent. Skills assessments aren’t limited to specific job roles. You’ll quickly see if someone in a certain department shows the skills necessary to succeed elsewhere.
• Identifying managerial skills. It’s particularly valuable to identify who might make a successful manager in the near future.
• Defining training needs. Build training programs based on your company’s real needs, not by copying every other organization.
• Adapting remuneration policy. Ensure those who invest in their professional development are also rewarded monetarily.
• Improving recruitment. See what your organization is missing, and therefore the right skills to prioritize in hiring.
• Boosting employee engagement. Team members want to grow and progress in their careers. Good skills assessments help them discover and get excited about their own abilities, and contribute fully to the work environment.

Clear benefits of skills management

On top of the benefits to organizations and employees mentioned above, there are a few key strategic advantages to an effective skills management approach:

• Identify skills gaps. The most immediate advantage of a conscious skills management plan is that you can spot organizational weaknesses and create training programs or hiring to close skills gaps.
• Limit recruitment costs. As above, well-defined skills help recruiters and hiring managers find the right people.
• Retain employees longer. The flow-on effect of a more engaged workforce is that employees tend to stay with the company for the longer term.
• Reduce job silos. Because skills can be transferable between roles, you give all teams a common language and a way of understanding each other’s contributions. And a focus on transferable skills also helps team members move between positions where appropriate.
• Encourage adaptation. The demands on workers keep evolving, and a skills focus helps them adapt to the disruptions of a changing environment.
• Align people management. You want consistent management styles and performance measurements across all departments. While that’s never going to be perfect, skills offer a common language and let employees locate their own performance more easily.
• Strengthen collective intelligence. Another benefit of a skills-based language is that team members can help each other grow through a common understanding of the organization’s goals, and how L&D helps you achieve these.

Limits and perspectives

Skills management must be central in any successful organization. But it’s not easy.

Implementation requires:

• A significant investment of time
• Aggregating data and ensuring information flows smoothly
• Regular updates of skills data, and the skills framework you build
• Effective communication, particularly where employees need reassurance and guidance around their own performance
• Sometimes slowing focus and investment in other areas, as you set the foundations

An HR department cannot manage all of this information alone. It is therefore crucial to centralize information in real time and update constantly.

This almost always requires great tools. We’ll explore these shortly.

How to create a skills management strategy

At the risk of needlessly repeating the point, you need an intentional skills strategy. Many (or most) of the skills you need may already be in place. Others may be easy to train or to hire for.

But if you don’t prioritize skilling and build a focused plan, you can’t ensure success.

1. Create your skills framework

Using a hybrid and dynamic framework is one of the bases of skills management. It lets you map the important skills for each job or role in your structure, including management positions.

This is also sometimes known as a skills matrix or skills ontology.

The idea is to list all technical and transferable skills in a document, which is used by HR and managers in hiring, training, and performance reviews.

At the company level, you have a clear map of the skills you need, where you’re already strong, and where to target your development and recruitment efforts.

And individuals have objective, comparable data points to understand what they do best, and how they can perform better.

Done manually, it’s a lot of work. Which is why the next point is crucial.

2. Incorporate skills management software

A good learning management system (LMS) is invaluable. A collaborative platform is even better. And one that puts skills-based learning first is an absolute gem.

Using an LMS for skills management lets you:

• Automate processes, from skills mapping and frameworks, to assessments, to performance tracking.
• Use dynamic, up-to-date data, which is far better than relying on biannual updates. These in themselves can take a quarter or more to complete, by which point they’re already out of date.
• Encourage employee buy-in, by making the process effective, fun, and (critically!) free from friction.
• Communicate internally and share your common skills language easily.
• Schedule easy check-ins, assessments, and updates for the whole business.
• Develop training plans and build new courses faster than ever - empowered by AI-learning tools.
• Involve subject-matter experts in the process to legitimize your training, get unique insights, and foster collaborative learning.

Implementing a new skills management platform is your opportunity to streamline decision-making, and to break down the barriers between skills to benefit the entire organization.

3. Set up strategic workforce planning

The upshot of a strong skills management plan is you can get much more strategic about workforce planning. You’ll know the constraints in your internal and external environment, and can allocate skills in the right place and at the right time.

Which is the exact goal of strategic workforce planning.

In practice, this means asking questions such as:

• What are the essential skills of tomorrow, and how do we acquire them? 
• Which of these can be reallocated in-house, versus needing to hire specifically for them?
• How do we maintain a high level of existing critical skills, while also building on the future?
• Are our job descriptions up to date? Do they reflect our most pressing needs?

Much like skills management itself, strategic workforce planning requires focus and effort. But with a solid skills approach, you have the information and framework you need to make these informed, strategic choices.

Get the tools to put your plan into action

This guide delved mostly into the theory and benefits of good skills management. But in truth, it’s the tools that make the difference. Without a great LMS at your side, there’s an immense amount of work ahead of you.

360Learning is the only solution that combines collaborative learning strategy and skills management. With this approach, your internal experts can create personalized training, adapted to each context, with minimal effort.

L&D managers are easily able to:

• Build an easy-to-update skills ontology - made even faster with our AI-enhanced tools
• Understand skills gaps within the organization, and create the specific resources required to close them
• Find new learning content fast, and work with internal experts to create it
• Launch skills development or reskilling projects.
• Monitor overall and individual performance from a single dashboard.

Chat with our skills management experts to find out more. We can’t wait to show you around.