Does your workforce have the skills to compete in a rapidly transforming marketplace? It’s a question many companies are asking themselves these days and the answer is too frequently a resounding no.
Employers have been facing a troubling skills gap for years and the problem has grown as the pandemic accelerated the adoption of digital technologies across industries. A recent Salesforce survey found that 76% of global workers don’t feel ready to operate in a digital-first world.
Companies aren’t just facing gaps in tech skills either. McKinsey estimates demand for social and emotional skills, such as leadership and empathy, could increase by 25% in the U.S. over the next decade.
“Every job is being flooded with new tools, new systems, and new applications,” says Josh Bersin, global industry analyst and dean of the Josh Bersin Academy. “People who knew how to do a given job two years ago, if they’re not continuously refreshing their skills, they’re definitely falling behind.”
In the face of these challenges, organizations must decide whether to “buy or build,” whether to recruit or retrain employees. But before taking any course of action, companies need to know what skills they have and what skills they’re missing.
Enter the skills audit.
A skills audit is the process by which employers gather information on their employees’ skills and look for shortfalls. “If you’re going to be investing in training and reskilling to empower workers,” says Eric Dingler, the chief learning officer for Deloitte U.S., “you need data to ensure your investment is being used wisely.”
Read on to learn about the steps you can take to better assess your workforce capabilities and chart a course for filling in the gaps.
1. Lay out your strategic goals and the skills you’ll need to achieve them
A successful skills audit starts with employers articulating their near-term and long-term objectives. Company leaders should consider what they hope to achieve over the next three to five years and then map out the job titles and related skills needed to meet those goals.
AT&T did that several years ago when it began to research the skills shortfalls in its workforce. The telecom company chose six areas of focus, including big data, IP networking, and software-defined networking, and then identified the roles it would need to advance. Ultimately, AT&T’s analysis led to a $1 billion investment in reskilling nearly half of its 250,000-employee workforce, a massive talent upgrade that’s become a model for other companies.
While it may be tempting to compile a long list of desired skills, it’s important to be selective, Josh says. “The audit process is expensive,” he says, “and it takes people’s time. Audit and validate skills that you believe are really important.”
2. Evaluate the current skills within your organization
Once companies determine the skills they’ll need to compete, it’s time to collect and analyze workforce data. There’s more than one way to do this. Traditionally, employers have manually gathered information by asking employees to fill out surveys and by looking at job descriptions and performance evaluations.
Employers are increasingly using AI-powered software to assess their current skills. LinkedIn Talent Insights translates data from LinkedIn member profiles into company reports, showing employers how the skills in their organization stack up against their competitors. Another type of skills-tracking tool, “skills ontology” software, scans a company’s employee data and infers skills, creating an inventory of workers’ capabilities.
“They are, in a sense, the internal ‘Google Search Engine’ for skills within your own company,” Josh explained in a blog post.
Companies that regularly gather information on their employees’ skills have a leg up when conducting audits. Schneider Electric, for instance, has an internal talent marketplace called Open Talent Market, where employees upload their profiles and are matched with internal opportunities based on their skills and competencies.
3. Create a searchable ‘skills registry’ with digital badges
Digital badge programs can also be helpful tools for measuring workforce skills.
In recent years, some employers including IBM and Salesforce have been handing out digital badges to employees who’ve met certain requirements like taking classes and passing tests. Eric says Deloitte is piloting a program where digital badges could be awarded for proficiency in such areas as environmental sustainability and Python, a computer programming language.
LinkedIn’s Skill Assessments program offers badges to LinkedIn members who’ve completed assessments for technical, business, and design skills. Members can choose to include their skills badges on their LinkedIn profiles.
Badge programs incentivize employees to improve their skills, and they provide other benefits too. The badges are embedded with information, which can be collected and organized, creating a “skills registry.” If a company is launching a new product, for instance, it can run a report to see if it has the skills necessary to get the job done.
“Knowing the precise number of people,” Eric explains, “who have a certain skill enables us to move more quickly in responding to client demands and opportunities. It also allows us to draw on a larger talent pool from across our organization and provide more people with more opportunities.”
4. Identify your gaps and come up with a plan
After employers collect data, they should compare the skills they have now to what they’ll need in the future. Based on what they learn, they can try to hire employees with certain skill sets or create learning and development (L&D) programs that help current employees gain new skills.
One important consideration will be whether employees have skills adjacencies — skills similar to the ones employers are seeking. The closer current skills are to an employer’s needs, the greater the opportunities for retraining workers.
Sometimes skills adjacencies aren’t obvious. It’s worthwhile digging deeper to uncover similarities. For instance, a company that will need employees who are adept at natural-language processing (NLP) — a form of AI that involves training computers to process language — might want to upskill current employees who are proficient in Python, said research and advisory firm Gartner in a blog post. That’s because the skills needed to succeed in NLP are closely related to the skills required to excel in Python.
“Companies can look at current employees who have skills closely matched to those in demand,” noted Alison Smith, senior research director in Gartner’s HR practice in a press release, “and utilize training to close any gaps.”
Final thoughts
Skills audits are a critical first step for organizations focused on bridging their skills gaps. Armed with information, employers can make smarter decisions on whether to buy or build talent.
But it’s not just employers that benefit from skills audits. Employees win too.
When companies take the time to assess their capabilities and upgrade their L&D programs accordingly, they provide opportunities for their workers to learn in-demand skills. This helps employees advance in their careers, while reinforcing ties to their employers: In a LinkedIn survey that asked members what areas companies should invest in to improve company culture, the No. 1 answer was professional development opportunities.
“We’re helping our people get the skills that are going to make them excited about work,” Eric says. “People feel more committed when they have confidence that they have the skills they need to be successful in the long term. We’ve definitely seen greater engagement and retention from our people who have received this investment in their skills development.”
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Topics: Talent analytics Skills-based hiring Internal mobility
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