Why You Need a Talent Development Strategy for the Skills Economy

More and more, talent development leaders are adopting a skills-based approach and focusing on measuring competencies across their workforce. The move is part of a broader strategy to close skill gaps and develop more resilient employees as the nature of work continues to evolve.

Why a skills-based approach? Because any organization’s lifeline is its workforce’s skills — or the abilities of employees to accomplish an array of tasks.

By understanding and categorizing skill levels within the workforce, companies can not only refine their talent development processes but also enhance their talent acquisition and retention efforts. And – measuring the ongoing development of skills within your organization can optimize talent allocation, maximizing productivity, efficiency, and overall performance. 

In this post, we’re going to cover the critical realm of skill measurement and the strategic importance of embracing a competency-focused strategy in today’s rapidly evolving work landscape.

Let’s dive in.

The modern workplace is increasingly characterized by a skills economy, where competencies and capabilities serve as the currency of career growth and business success. Within this context, the talent development lifecycle — from hiring and onboarding to ongoing development and succession planning — relies heavily on an accurate and dynamic understanding of employee skills.

In the Hiring Phase:

Organizations can use Human Resource Information Systems (HRIS) to analyze candidates’ resumes, focusing on extracting and mapping skills. These systems often play a crucial role in spotting keywords within resumes to determine candidate progression in the hiring process.

During Onboarding:

A thorough assessment of new hires’ skills allows for the customization of onboarding programs, accelerating the time to productivity and ensuring that employees start adding value immediately.

Ongoing Development:

Continual skill measurement informs personalized learning paths, helping employees develop competencies that align with both their career aspirations and the organization’s needs. This dynamic approach to L&D promotes a culture of continuous learning and improvement.

Succession Planning:

Understanding the skills across the workforce allows organizations to identify high-potential employees and prepare them for leadership roles. This proactive approach ensures a pipeline of future-fit leaders and minimizes disruptions during transitions.

By developing a comprehensive understanding of employee capabilities, organizations pave the way for strategic workforce planning, a critical component in shaping their talent development lifecycle.

Accurate skill measurement provides a clear picture of current capabilities, identifies gaps, and informs strategic decisions related to learning and development. As businesses strive to adapt to market changes and technological advancements, having a precise understanding of their employees' skill sets becomes indispensable. Take the assessment.

Effective skill measurement impacts several facets of organizational success: 

• Strategic Workforce Planning: Understanding skill levels helps in forecasting future talent needs and aligning L&D initiatives with business objectives.
• Enhanced Performance: By identifying skill gaps, organizations can tailor training programs to address specific needs, leading to improved individual and team performance.
• Employee Engagement and Retention: Employees are more likely to stay with an organization that invests in their professional growth. Skill measurement enables personalized L&D pathways that enhance job satisfaction and retention.

When it comes to measuring skills effectively, organizations can employ various strategies to ensure accurate skill assessments. Utilizing an introspective approach that combines assessment methods with other evaluation techniques can provide comprehensive insights into your workforce’s skills.

Assessments and Surveys

Self-assessments and surveys are valuable tools for initial skill measurement. They allow employees to evaluate their competencies and provide valuable insights to talent development teams.

Implementation Tips:

• Standardized Questionnaires: Use standardized questionnaires to maintain consistency. Design them to cover a range of relevant skills.
• Regular Administration: Conduct self-assessments at regular intervals to track progress and identify trends.
• Anonymity: Ensure anonymity to encourage honest responses.

Managerial Assessments

Managers play a crucial role in assessing the skills of their team members. Their insights, drawn from daily interactions and observations, add another layer of accuracy to skill measurement.

Implementation Tips:

• Training: Provide managers with training on objective evaluation techniques to mitigate biases.
• Standardized Criteria: Use standardized criteria — like a skills framework — to ensure uniformity across different managers.
• Feedback Mechanisms: Implement feedback systems to review managerial assessments.

Performance Metrics 

Performance metrics provide quantifiable data linked to specific skills, making skill measurement more accurate. For instance, sales figures can indicate proficiency in negotiation and customer relationship management.

Implementation Tips:

• Identify Key Performance Indicators (KPIs): KPIs, OKRs, however you set goals at work, use them to help identify skills and gauge proficiency.
• Alignment with Roles: Relying on an employee’s KPIs, review the progress they’ve made toward achieving their goals. This can help determine skill gaps, as well as strengths.
• Regular Reviews: Regularly review and update KPIs to reflect changing business needs.

While measuring skills is essential for understanding current capabilities, indexing these skills is equally crucial for creating a structured and actionable framework. Indexing involves organizing skills and defining their proficiency levels, making it easier to manage and analyze the workforce’s collective expertise.

This structured approach to skill management helps in aligning organizational goals with employee development, ensuring that the right skills are built to meet business needs.

A well-designed skill taxonomy serves multiple purposes:

• Provides a comprehensive inventory of skills available within the organization, aiding in resource allocation and project planning.
• Helps identify skill gaps that need to be addressed through targeted training programs.
• Guides companies in aligning recruitment efforts with identified skill requirements. 

And a well-designed job architecture can:

• Facilitate career development by mapping out clear paths for skill progression and advancement.
• Support succession planning by identifying potential leaders and preparing them for future roles.

Skill Taxonomies and Frameworks

Skill taxonomies help in organizing skills into categories and sub-categories, making it easier to manage and analyze them. They provide a structured approach to understanding workforce capabilities.

Implementation Tips:

• Define Skill Categories: Identify skill categories relevant to your organization’s goals.
• Break Down Skills: Detail specific skills for each category.
• Establish Proficiency Levels: Set proficiency levels for each skill (e.g., beginner, intermediate, advanced).
• Communicate the Taxonomy: Disseminate the taxonomy clearly to employees and managers.

Digital Platforms and Tools

Technology plays a pivotal role in skill indexing. Digital platforms and tools streamline the process of data collection, analysis, and reporting. Leading tools in this space offer features such as skill assessment modules, learning management systems, and real-time analytics.

Implementation Tips:

• Integration: Ensure that digital tools integrate seamlessly with existing HR systems.
• User Training: Provide training to employees and managers on how to use these tools effectively.
• Data Security: Work with your IT team to implement robust data security measures to protect sensitive information.

Data Integration and Analysis

Integrating data from various sources — such as HR systems, performance management tools, and training platforms — provides a holistic view of skill levels across the organization. Advanced analytics can then be used to refine skill indexes and inform strategic decisions.

Implementation Tips:

• Identify Data Sources: Identify key data sources (e.g., LMS, TMS, performance management systems).
• Establish Protocols: Collaborate with your IT team to establish data integration and governance protocols. 
• Generate Insights: Gather data to help illustrate skill proficiency for stakeholders and inform future strategies.
• Training for HR Teams: Provide training for HR teams on how to use analytics tools effectively.

Developing the right skills and competencies across your workforce is crucial for organizational success. Measuring and indexing skills provides a solid foundation for improving your learning and development (L&D) strategies, upskilling and reskilling employees, and supporting talent development and succession planning. 

To assess your team’s current capabilities, Skillsoft’s Skill Benchmarks test learners’ knowledge of key concepts, while Interactive Skill Benchmarks challenge them to apply these concepts in realistic scenarios. This combined approach ensures a comprehensive understanding and practical application of skills. 

Learn more about how Skillsoft can help your organization build a highly skilled and adaptable workforce.

Read Next: Measure Mastery: How Interactivity Showcases Earned Skills