Companies are adopting a skills-based approach to workforce management. What is the key to success? Here are eight benefits of assessing employee skills.
Mercer’s 2023/2024 Skills Snapshot Survey, which captured responses from more than 1,400 HR professionals across 60+ countries, showed that an impressive 91% of employees are actively seeking to learn new skills. However, 98% of HR leaders still report notable skill shortages in their companies. As companies increasingly adopt a skills-based approach to workforce management, it’s clear that there is room to grow. Indeed, creating a reliable and future-ready workforce often involves more than just acquiring talent; it requires ensuring that the company’s mission, vision, and values are understood and embodied by all employees, fostering an alignment crucial for collective progress. So, what is the key to unlocking success in this skills-focused landscape? Here are eight benefits of assessing employee skills.
How Are Companies Assessing Employee Skills?
“You can’t improve what you don’t measure,” they say. And, when it comes to improving employee skills and performance, we agree!
There are numerous ways to assess employees. For example, performance reviews evaluate an employee’s overall performance and progress toward defined goals within a specified timeframe. Personality tests help individuals understand their personality type and those of others on their team, to help better communicate and collaborate. And skills assessments focus on evaluating employees’ current skills.
Often, online skills assessments are used to assess and capture skills metrics. But, as we mentioned in an earlier blog, “skills assessments may be conducted in person and/or online and may take the form of a simulation, test, questionnaire, or observation.”
Why Evaluate Employee Skills?
Organizations use skills assessments to measure the skills of individuals, teams, and the enterprise so they can identify and close essential skill gaps, ultimately improving their overall performance.
Skills assessments are “part two” of a four-part process:
1. Create the Job Models: Companies create job descriptions that specify the skills needed for that job, along with a level of proficiency required.
2. Assess Employee Skills: Using skills assessment, companies get a point-in-time snapshot of the skills and proficiencies of their employees.
3. Identify Skill Gaps: A skills gap report maps the employee’s skill levels to the skills required to do their job, revealing gaps to be addressed.
4. Close Skill Gaps: Managers and employees create custom learning and development plans to close the most critical skill gaps and build the skills for the next career steps.
Closing critical skill gaps is what improves job performance. Over time, repeatedly assessing employee skills and analyzing skill gaps helps to monitor progress toward gaining skill proficiency and reducing the gaps.
Employer Benefits of Evaluating Employee Skills
For employers, there are many benefits of evaluating employee skills – and identifying and addressing skill gaps. In this endeavor, Human Resources (HR) often plays a pivotal role, acting as a lynchpin that connects people strategies with business performance. By integrating competency management within a broader business metrics framework, for instance, HR can gain measurable insights and significantly enhance its ability to influence organizational success. Here are just a few key benefits for employers:
#1: Aligned Organization
When companies articulate their strategic plan and goals, it’s helpful to name the skills needed in the workforce to drive success. Ideally, these skills are captured in a competency model that defines the skills, knowledge, abilities, and behaviors that an organization (and its workforce) needs to perform proficiently. Periodic skills assessments help to measure how well the workforce is aligned – and where there are gaps to be addressed. A well-articulated competency model is instrumental here, as it helps each employee focus on the overall goals of the organization, validating that their work aligns with its forward movement and ensuring that internal behaviors and skills directly support the strategic direction. Furthermore, this focus on competencies can elevate the perception of HR, showcasing its impact beyond administrative functions to that of a key driver of business performance, thereby increasing organizational awareness of HR’s strategic role. Moreover, data-driven insights from these assessments can also highlight the company’s success areas, enabling leadership to identify and replicate effective strategies across teams and departments, thus fostering a culture of excellence.
#2: Hiring the Right Talent, the First Time
Regardless of a person’s education or experience, it’s skills that are the best predictor of their ability to perform a role at work. McKinsey refers to “right skills, right person, right role” when talking about the adoption of skills-based hiring. Evaluating employee skills during the recruitment and hiring process helps to inform successful hiring decisions and onboarding plans for new employees.
#3: Tailored Learning and Development Opportunities
Armed with assessment data about employees’ skills, and skills gap reports that identify mismatches between employee skills and job requirements, HR and learning leaders as well as managers have good information about how well individuals and teams are mastering the skills they need for the company to succeed. This provides greater insight into overall workforce challenges, allowing HR to pinpoint not only skill gaps but also potential performance bottlenecks and operational inefficiencies with concrete data. That information can inform which learning and development opportunities can support the next stages of skill and career growth, and helps HR proactively address emerging problem areas.
#4 Strengthened Succession Planning
Assessing employee skills can also support succession plans by providing valuable insights into current employees with the skills and competencies that align with future leadership roles. This is particularly potent when an organization-wide alignment on mission, vision, and values is already established, as employees who understand and internalize this direction are better prepared for, and identified for, future leadership responsibilities. Skills assessments and gap analyses can shape career paths and learning plans based on individuals’ skills, strengths, areas for development, and goals. Ongoing skill evaluations help to measure progress toward mastery and help inform when someone is ready to take on a next-stage leadership role (and the new set of skills to be learned in that phase of leadership development).
Ultimately, by systematically assessing skills and leveraging competency models, organizations can forge a stronger, demonstrable connection between workforce capabilities and tangible business outcomes. This data-backed approach not only reinforces the need for strategic talent development but also empowers HR to justify investments in training, hiring, and workforce optimization by showcasing a clear return on investment.
Employee Advantages to Assessing Skills
Employees, too, benefit from routine skills assessments of the skills they need to do their jobs.
#5: Increased Awareness and Quality
In environments where skills are routinely assessed, employees benefit from working in a culture of everyday transparency about how each person contributes to the company’s goals and success. For employees who clearly understand the skills they need to perform their jobs – and how that job role contributes to company success – skills assessments and ongoing gap analyses provide helpful data about how their skills and contributions can make a difference. With such insights, employees can confidently focus on delivering high-quality work products, perform their work more efficiently by applying their creativity and initiative, and work with their managers to craft individual learning plans to build their next tier of skills. Understanding this clear connection between their daily activities and the company’s broader goals often leads to increased job satisfaction.
#6 Improved Morale and Engagement
Assessing employee skills can be motivating for employees who see their improving skills data as confirmation of their growth and valuable contributions through their role. It’s gratifying to know that the work one does is making a difference. This sense of satisfaction and pride can boost individual and team spirit, helping to create or maintain an engaged workforce.
#7 Enhanced Visibility and Recognition
Because skills assessments are based on a shared language and common system of metrics, results give people at all levels of the organization insights into the skills of their own teams as well as those of individuals and teams in other parts of the company. The process can enhance leaders’ visibility into skills across the workforce, creating an opportunity for top-skilled employees to shine and earn recognition for their capabilities and contributions.
#8 Improved Collaboration
By assessing employees’ skills, company leaders, managers, and employees can improve communication within and across teams. Individuals who are keenly aware of their own – and their teammates’ – skills are better able to collaborate with others. They can more easily seek out those who have mastered the skills they need, mentor those who are working on the skills they have, and delegate tasks effectively.
Assessing employee skills and analyzing skills gaps can give you insights into the skills of your workforce, help align workforce skills to company goals, and build more engaged, collaborative employees. This strategic focus on skills can also contribute to attracting better talent, reducing employee turnover, and may extend to broader business impacts such as enhanced customer satisfaction, increased profitability, and improved market share. It’s an excellent ongoing practice to align your people and company for long-term success.
If you are ready to get the most out of assessing employee skills, download our Competency Management Toolkit to see how a skills and competency-based approach to workforce management can help. Or contact us to see if Avilar’s WebMentor Skills™ can advance your initiative.
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