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Why Companies Need to Build a Skills Inventory

Guest Author

Article written by Jeff Hesse, PwC


Here’s a question every leader should answer: Do you have a clear understanding of your people’s skills, and where the gaps are?

Odds are, the answer is no. Although the cloud, digitization, and the Internet of Things allow businesses to gather and analyze all sorts of data, few organizations today have a system in place to track the skills their people have. And even fewer know what skills they lack — which presents a challenge, given that in tomorrow’s automation- and data-driven workplace, talent will be scarce and the needs of your organization will change often.

Digital disruption is already here. In the Workforce of the Future study, PwC envisions what the workforce will look like in 2030. While it’s impossible to predict exactly the skills businesses will need even five years from now, every scenario imagined will require workers and organizations to be ready to adapt.

Given the dynamics, it’s vital to have a system in place to track and analyze the skills your people have — and those they may need soon. Here’s how to get started.

1. Make an inventory of your people’s dynamic skills

Before you can begin to plan ahead, you need to know what skills your people have now. Start by considering the particular skills your business needs. Then categorize them by functional skills, such as financial modeling or accounting, or by technical skills, such as programming. You should also categorize the level of those skills, from novice to expert. Look beyond workers’ job titles to consider what skills they have that they may not be using.

Next, think about the best way to inventory those skills. Organizations that are small- to medium-sized don’t necessarily need a high-tech solution — it could be a simple system in conjunction with your HR platform, or even just a spreadsheet. Larger companies with hundreds or thousands of employees will need a more advanced technological solution, such as an app. PwC has created a widely available app called Digital Fitness to help employees assess their own technology skills and create personal learning paths. 

Creating an inventory can’t be a one-time exercise, or a static project. You’ll need to update it as your people’s skills evolve, as your organization’s needs change, and as people come and go.

2. Organize your inventory

Once you have the basic inventory in place, organize it in a way that allows you to search and access the data quickly, with good results. The inventory won’t be useful if you can’t efficiently search for a specific skill or attribute, or easily access the information you need.

Free-form keywords aren’t reliable, because someone might refer to a certain skill using one term, while someone else might call it something different. One person’s “coding” might be another person’s “software writing,” for instance. Figure out how to organize the data to produce useful query results, or consider a powerful search engine that doesn’t rely on how the data is organized.

3. Analyze your skills

With the data in place, begin analyzing it. This can be simple (comparing rows on a spreadsheet) or more complex (using people analytics or apps to find and assess certain skill sets). The goal here is to gain insight into where your employees’ skills are the strongest, where they’re thin, and where the gaps are.

As with building the inventory, analysis isn’t a one-time exercise. How closely you track your people’s skills depends on the needs of your business. In manufacturing or retail, where a lot of people may be doing the same job, you may not need to track skills too closely. But if your organization demands certain unique skill sets, such as those in financial services, pharmaceuticals, or some highly technical industries, you’ll want to give skill tracking more attention.

4. Plan for the future

Once you’ve built an inventory and analyzed your people’s skills, you can start planning. Try to gauge the skills your company will need two to three years down the road. Rather than being caught off guard by a sudden gap in skills or having to hire people, companies armed with such knowledge can plan ahead through hiring, training, and career development strategies.

These steps inform a broader workforce strategy. It’s important not to forget that planning your strategy shouldn’t happen in a vacuum — it should always be connected to larger, unified business goals. 

There’s a lot we don’t know about tomorrow. But workers and organizations should be as ready as possible. By identifying the skills you need and concentrating on how to build them, you’ll be better prepared for the changes coming your way.

This article originally ran in strategy+business magazine

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