The Benefits of Using an Employee Skills Database for Organisational Strategy

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You need to have an understanding of the current state of your organisation before you can plan for its future. That requires data on your employees’ skills to understand the skill sets currently available to your organisation. This is where creating a comprehensive skills inventory comes into play.

But how does a skills inventory really help your business? In this article we’ll break down how your business functions and future plans are benefitted by an employee skills database.

What is an employee skills database?

An employee skills database is a catalogue that tracks the skills, goals and opportunities of your workforce. It’s an inventory of your employees’ skills that allows you to see which skills your employees need for their current roles and (coupled with a demand analysis) which skills will be needed in the future when you look to fill those roles.

Why do you need an employee skills database?

In a vacuum, a skills inventory is just that: A catalogue of skills present in your organisation. But when you couple it with other tools, analyses and planning activities, your inventory becomes invaluable for effective decision-making for your business strategy, especially when your skills database is consistently updated over time.

So, how does an employee skills database benefit your business? We have two words for you: Workforce planning. We’ll break them down below:

• Training and development
• Internal mobility
• Employee assignments
• Succession planning
• Recruitment
• Staff retention.

Training and development

Running an inventory on your employees’ skills only shows the specific skills currently present in your organisation without tracking specific skill levels or competency.

But assessing the skills your workforce possesses with a skills matrix can highlight where you have skill gaps in your business. You can prepare training and development activities to plug these gaps by finding which employees need learning and development.

When you make long-term plans in preparation for industry changes, a skills catalogue can identify gaps between skills you’ll require for the future and the skills you currently have. This allows you to plan for resourcing for training, development and upskilling within your organisation.

This is where a performance learning management system (PLMS) comes in handy. At Acorn, we’ve pioneered the first PLMS to synchronise learning with organisational performance, allowing businesses to see the true impact of their training and development.

Internal mobility

Done properly, an employee skills database should be constantly assessing and recording skills on a regular basis, providing an up-to-date overview of skills across individual departments and the company as a whole. It helps you with internal mobility by matching your employees’ skills with internal positions that they’re the most qualified for. (This depends on their interest levels, of course.)

Ultimately, it should help you choose the best internal candidate for positions within your business, making their transition from their old role to their new one smoother. This also helps to reduce costs and decrease time to proficiency as you won’t be hiring and onboarding from external talent pools.

Employee assignments

The way a skills catalogue benefits internal mobility is similar to how it benefits your employee assignments. With a clear inventory of skills, you’ll be able to match your most competent employees with projects they’re most suited for. When you have the right people with the right skills and knowledge working on a project, the project is more likely to succeed, with increased productivity, positive team dynamics and decreased attrition rates leading to happy clients and customers and greater returns for your business.

Succession planning

When it comes to succession planning, think along the lines of internal mobility. Your organisation will have to deal with succession planning at some point, and a skills inventory keeps track of employees whose skills might give them the ability to step up when leadership or management roles become vacant.

Plus, because you know what their current skills are, you have an idea of how much (or how little) development they need to become truly effective in a higher position.

Recruitment

Because your skills database shows which skills are required to carry out specific roles, businesses can use skills catalogues to assist in recruitment for those positions. Hiring managers can use it as a checklist of qualifications and criteria to select the right people for vacancies.

A skills catalogue also assists in deciding whether to recruit new staff or train current staff based on the cost to the business. This is because it records which skills are necessary for a company to have to achieve its outlined business goals, which can be used to identify the most efficient course of action.

Staff retention

When employees are matched to the roles that best suit their skill sets, they’re more likely to be engaged in their jobs. We’ve talked before about how engagement leads to higher retention among employees and a positive workplace culture. But it’s also helpful for saving on spend. We all know that onboarding new hires is expensive, so it goes without saying that keeping the staff you already have, where possible, is more sustainable in the long run.

The impact of not using a skills database

Now that we’ve discussed the importance of a skills inventory to your organisation, it’s time to talk about what happens when you don’t use one at all.

McKinsey & Company reports that 87% of companies worldwide know they already have a skills gap within their organisation or will have one in the near future. Keeping an up-to-date skills database of your workforce can be overwhelming, particularly in large organisations with a wide variety of soft and technical skills. But if you forgo the skill catalogue entirely, you’ll lack a tangible, visual snapshot of your workforce’s current array of skills.

Without that, you won’t know what the current supply of skills are in individual departments and across the organisation as a whole. And, when you don’t have a current record of your workforce’s skills, performing a demand analysis on the skills you’ll need to meet your strategic goals will be useless, because it won’t be able to highlight any skills gap between current and future skill sets.

Ergo, not using a skills inventory leaves your organisation blind.

Key takeaways 

An employee skills database is an important tool for your organisation to utilise, enabling more informed decision-making and workforce and future planning. A skills inventory helps with:

• Succession planning
• L&D activities
• Internal mobility
• Recruitment
• Matching employees with projects
• Driving employee engagement
• Retention.

It’s a daunting task, particularly in large organisations, but it’s a crucial undertaking if you want to ensure a healthy and agile business now and in the coming years.

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