Skills analysis: Unleashing the power of digital
Consultants often maintain that if you can’t measure it, you can’t improve it. This is particularly true in the area of skills. Management needs a detailed understanding of their company’s talent requirements if they want to know who to train in what skill, or who to recruit with what profile. This can be a particularly complex challenge in large organizations, and this is where digital solutions become indispensable. But what benefits do such solutions actually bring?
Managing skills and the people with these skills
The problem with HR terminology is that it appears to reduce humans to factors of production. Expressions like “human resources” or “human capital” can often give rise to misgivings. “Skills management” elicits a similar reaction — it sounds like individuals are quantified by their usefulness and not by who they are and what they aspire to become. It’s even worse if digitalization is factored into the picture, with fears of Big Brother just around the corner and of people being reduced to equations.
Nothing could be further from the truth, however. Skills management also involves taking the employees’ expectations and aspirations into account in order to identify their training needs and offer them career pathways that allow them to achieve their potential while also adding value to the organization. As with all other roles and responsibilities associated with the HR function, skills management aims to reconcile the individual’s wishes with the collective needs of the business. At a macroeconomic level, the mismatch between employees’ skills and the position they hold is a real problem, the exact scale of which is hard to gauge.
The three datasets needed for skills analysis
On paper, the theoretical principles of talent management appear straightforward: ensure that the company has the skills it needs at any one time in order to fulfill its mission. If there is a skills gap, the organization invests to fill it, whether through training or recruitment. In practice, of course, several other factors come into play. Regardless of the scenario, however, the success of skills management efforts hinges on the ability to manage a large volume of data in both qualitative and quantitative terms. Hence the relevance of an IT tool. Skills management is generally regarded as one of the areas where digitalization can make a real difference. The challenge involves comparing at least three sets of data, which are not easily compiled, in order to analyze skills gaps:
- The company’s skills requirements. Does it refer to building the skills needed to maintain business continuity, meet short-term development goals, or anticipate future requirements? And who decides what needs are the most pressing and what methodology should be applied?
- The skills are actually available within the company. Who analyses them? Which method do they use?
- Employees’ expectations in terms of their career development and training needs. When and how often is this information collected? How and where is this information provided?
Where does the information come from?
For skills management to be fully effective, however, all of this information needs to be combined and analyzed in its entirety. So where can it be found?
- Employees themselves are a source of all three types of data. Their personal perspective makes them more aware of their skills gaps and needs than technical leaders or managers. They naturally have direct knowledge of their own abilities, although their subjective point of view does need to be supplemented by performance reviews. Finally, they are in the best position to talk about their aspirations.
- Management observes the skills needs and potential at the team level and can identify where transfers are possible.
- Technical leaders and project owners have insight into the skills, knowledge and know-how needed to successfully execute the planned developments.
The channels for collecting these different types of information are not the same, and the data tends to be stored in separate places, such as the HR database for employees’ actual skills, files kept by each manager for employees’ expectations (based on annual and career reviews), and technical documentation managed by project owners for the skills to be developed.
The overarching advantage of a digitalized skills management system is that it provides an opportunity to fundamentally rethink the data collection process, establish consistency across sources and centralize/rationalize the various databases involved.
The objective is to give HR and company management a global map of the skills available within the company, converging and analyzing various sources such as CVs, employee performance records, annual reviews, etc. This 360° overview, provided for example by a solution such as the skills graph, allows organizations to implement an agile and responsive talent management policy that is consistent with the company’s business objectives while still taking employees’ aspirations into account.
The right tools are not always available
It appears, however, that many companies lack the tools they need to master this data convergence challenge. According to a 2020 report by Cornerstone entitled "A License to Skill," there is a gap of 30 percentage points between the level of confidence of employees and that of managers in the organization’s ability to develop the skills of employees (90% compared to 60%). The gap amounts to 25 percentage points in the perception of the tools available: 87% of managers considered themselves well-equipped to manage skills compared to 62% of employees.
This is a significant gap, and it cannot be ruled out that employees themselves over-estimate the quality of the tools provided by their company in relation to what is possible today.
The identification of skills gaps is a major challenge for HR and for company management, regardless of whether the disconnect is at the individual, team or group level. A powerful digital solution is the only way to master the wide range of data-related tasks, spanning quality assurance, the update process, analytics, cross-referencing and the deployment of artificial intelligence to gain actionable insights. This is undoubtedly one of the areas where the digital HR revolution has the most value to offer. It’s time to seize this opportunity!
Want to keep learning? Explore our products, customer stories, and the latest industry insights.
5 Ways To Develop Employees’ Communication Skills
From the first time you took the wheel to the long hours spent picking up a new language or software program, we've all honed our hard skills through a lifetime of learning and experience.
Why talent leaders must look within
Personalwirtschaft podcast with Mike Bollinger – VP, Strategic Initiatives, Cornerstone