What Is Skills Management?

The conversation around employee skills and competencies is top of mind for nearly every CEO, organizational leader, analyst, and thought leader. The landscape of work is continually changing for many, if not all industries, because of fast-paced technological advancements, evolving work environments, and shifting business goals. Top leaders are leveraging skills management software and verified skills data to drive strategic workforce and organizational decisions.

In this post, we’ll define skills management and explain why having a skills and competency management system married with a thoughtful strategy is critical to the success of your business, connecting HR and Operations to create a more skilled, competitive workforce.

What is Skills Management & Why Does It Matter?

Skills Management is the process of identifying the most critical skills supporting your business strategy, assessing capability relative to these skills, and developing the workforce to reflect the right distribution of skills across your organization. Continuous modifications to business strategies and operating conditions drive changes to the critical skills and prioritization of these skills, making skills management a continuous cycle that should be treated as its own business process. At a high level, Kahuna defines this process in 4 steps:

Curate: Curate your skills and competency framework and content to accurately represent the way your operational roles are performed within your organization. 

Assign: Assign your content to individuals in your workforce through unlimited job roles rather than fixed-job codes. 

Assess: Use rich multimodal assessment methods, such as on-the-job observations, quizzes, training, experience, and certifications, to create validated, trusted user proficiency. 

Develop: Apply employee skills assessment data to personalized, targeted development plans. With the ability to embed relevant learning opportunities into each competency, employees can quickly discover ways to close skills gaps right in the flow of work within your competency management system. This not only motivates employees but reduces the time it takes for your workforce to be productive and generate revenue.

A note: Historically, the term skills management has been semantically debated with competency management, reskilling, upskilling, etc. Here at Kahuna, we believe if we spend all of our energy focusing on what it’s called, we lose sight of the actual results this process can produce, which are tremendously impactful. For more on this, listen to our Digital Transformation webinar on-demand.

Why is Skills Management Important?

Skills management is important in ensuring your workforce skills are aligned with your overarching business strategy and can grow to meet future demands. Skills management enables you to form a solid foundation to execute organizational goals and thrive in the “future of work.” This concept, which essentially means change, is being shaped by three driving forces:

Work: What work can be automated or done with smart machines? 

Workforce: Who can do the work and manage the continuum of talent options? 

Workplace: How are workplaces shifting with technology to reshape where work is done?

There’s no doubt that these changes introduce complexities into the work environment, especially to the skills required in operations-focused industries such as healthcare, energy, manufacturing, field services, etc. These complex skill changes are driving up demand for upskilling and reskilling. Forrester reported that CEO concern for upskilling has grown tremendously, increasing from 53% in 2012 to 79% in 2019. 

With the events of the last 18 months, we predict this concern to continue rising. McKinsey reports that “nearly nine out of ten executives and managers say their organizations either face employee skills gaps already or expect gaps to develop within the next five years,” with 69% of organizations doing more skill-building now than they did before COVID-19. 

Organizations that have a skills and competency management framework in place, and execute their processes through skills management software, are empowered to face these complex challenges head-on. Skills and competency management gives them a sustainable transformation strategy that promotes agility in the wake of new threats. A skills management business process moves skills and competencies from being solely an HR function to an organizational business function. It brings both HR and Operations executives and managers together so that a culture of learning and development is conglomerate with safety, quality, and execution rather than siloed. This intersection is where the enduring effects of skills management occur and how organizational transformation at every level begins.

Why Do I Need Skills Management?

The future of work is continuously changing, and the changes are happening fast. When they impact your organization, how will you respond? Will your workforce be prepared to adopt new technologies, learn new systems and strategies, deploy to new locations, and transition to new roles if needed? 

Equipping your organization with a skills management strategy, and organizing your skills into a digitized competency management system, facilitates a proactive approach in combating the unknown future of work. Because you know the exact skill sets across your entire workforce, you can respond and adapt to changes quickly, confidently, and efficiently. A baseline skills understanding empowers your organization to know who to upskill or reskill or when to hire externally, and how to manage your people in a way that is always in line with business needs.

A skills management strategy implemented by skills management software enables employees, managers, and executives to view skills data from disparate systems across your organization (i.e., HRIS, LMS, Training, Scheduling, etc.) in one place. With robust, validated data, leaders can make informed business decisions regarding talent and business capability, all while meeting and exceeding business goals no matter the organization or industry circumstances.

Following Kahuna’s skills management processes, you’re able to use trusted skills data to inform both Talent Identification – finding the right person for the right job at the right time – and Capability Planning – aligning your workforce to meet future skills demand.

Building a Skilled, Competitive Workforce

In conclusion, your workforces’ skills are critical to your overall organizational success. Without a skills management process or competency management system in place, there is no strategy enabling you to understand your current or future employee skills needs. By following the process of curating, assigning, assessing, and developing, while utilizing skills management software to produce trusted data, you can execute your skills strategy, meeting today and tomorrow’s needs. 

Building a sound foundation for skills management throughout your entire organization enables you to have the right person in the right job at the right time and to fully align your workforce needs with current and future skills demands – both of which are key to executing your overall business strategy and being successful as an organization.

Skills Management Kahuna Sample RFP

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