What is a skills inventory?

A skills inventory collects data on all the capabilities and qualifications of your entire team. It might include things like hard and soft skills, education and experiences. Managers and HR can use this database to make various decisions and gain better insight into the workforce.

You can gather the information in various ways. It’s common to use employee self-evaluations as one data source. Managers and supervisors might also perform evaluations to identify skills. By using these various sources, you can collect data on your workforce as a whole.

Benefits of a skills inventory assessment

Why should you perform a skills inventory? While it might seem time-consuming, this practice can give you lots of information. It’s a strategic business tool that can help you make a variety of decisions. Some benefits of doing an inventory include:

• Identify your strengths: You get a compiled list of the skills and strengths of your team. This can help you identify where you’re performing well and which skills you could activate for future projects.
• Find skills gaps: Performing a skills gap analysis does the opposite—it helps you look for the skills you lack. This information can help you when you expand your team, so you know which skills to look for in candidates.
• Manage your resources: Doing a skills inventory assessment can help you better manage those resources. You might discover that certain employees have skill sets you were unaware of. With this knowledge, you have a chance to give these employees new responsibilities while reaping the benefits of having those skills in use. It can also help you put together more effective teams.
• Look for upskill opportunities: Missing certain skills doesn’t mean you have to hire new team members. It can also be an opportunity to upskill your employees to give them learning opportunities and gain the skills your team needs. You can use the data to plan future training opportunities.
• Identify potential leaders: Taking regular inventories of your employees’ skills and qualifications could help you identify potential managers. You can also use this information for succession planning .
• Track growth: When you repeat your skill inventory activities on a regular basis, you can see the growth of individual employees and your team as a whole. You can also see how new hires help boost the overall skills of your company.

Creating a skills inventory

Ready to try a skills inventory assessment with your staff? These steps can help you complete the process.

1. Set goals for the inventory

If you’re doing the skill inventory for a specific purpose, such as recruitment or planning training and development, keep those goals in mind as you plan your assessment. If you start with a main purpose and build the assessment around it, you may find it easier to obtain the necessary information. Asking the right questions and looking at relevant skills can help you get the data you need.

2. Identify the skills you want to assess

Drill down to the specific skills, qualifications, experiences and other details you want to evaluate. For instance, if you’re planning major changes that will require specific skills, you might include those details in the analysis. This can help you identify current employees who might be able to assist with the new project. Aligning the skills with your business strategies can help make the inventory a more effective tool.

3. Choose your assessment methods

Gathering information from a variety of sources can give you a more accurate look at the skills your team has. It can also help eliminate inconsistencies and overcome subjective information included in self-assessments. Common options include:

• Employee self-evaluations
• Supervisor evaluations
• 360 employee reviews
• Employee testing
• Social data from posted resumes
• Information from employee files, such as certifications
• Role analysis or project history

Use any number of these methods to get your data. You might start with resources you already have available, such as the latest employee evaluations and the information you have in personnel files. Then, utilize the additional methods you choose to gather more data.

4. Use a skills matrix

You can also create a skills matrix to help visualize the skills you have on your team. It can take different forms, such as bar graphs, spreadsheets or tables. You can quickly glance at the chart to see where your team’s skills lie.

5. Analyze the results

With the data neatly compiled, you can analyze it based on your goals and use the information to inform your decisions. You might also look at the results with your leadership team and other key stakeholders to get them involved in the decision-making.

Best practices for a skill inventory

The following best practices can help make your skills inventory assessments more useful:

• Be transparent: Talk to your employees about the skills inventory so they understand why you’re asking questions or performing evaluations. Let them know how you plan to use the information to strengthen the team.
• Evaluate proficiency: It’s helpful to know whether you have certain skills available, but knowing how proficient employees are is also important. Someone may have a basic understanding of automating payroll processes, but they might not be competent enough to lead the implementation. You might include rating systems or other tools to evaluate proficiency levels.
• Prioritize skills: You don’t need to evaluate every possible skill or competency your employees might have. You can keep the inventory manageable by prioritizing the things you want to evaluate based on your upcoming business goals.
• Make it a living document: Your skills inventory is a living document that evolves as things change. You can update it when you hire new employees to reflect the skills you gain. You can also update it when your current employees attend a training, earn a certificate or otherwise gain new skills.

FAQs about skill inventory assessments

How can a skills inventory help you make decisions about your company?

Your inventory can help you make decisions that could be affected by your workforce and available skills. For example, if you’re thinking about expanding or offering a new service, you can check the inventory to see if you have the skills to support the change. It can also help guide your recruitment plan.

Are there limitations to a skills inventory?

If you’re relying on employee self-evaluations, you may not get completely accurate information. Employees might miss some skills or over-inflate their proficiency in others. If you’re only looking at certain skills, you might miss other equally important qualifications that could help your team. It may not always reveal someone’s attitude and general work ethic, which can also impact productivity.

How often should you update your skill inventory?

Revisiting your skills inventory regularly can help ensure it’s always up to date. How often you do this can depend on your company’s size and changes. If you have a relatively small company with low turnover rates, you won’t need to update your inventory as often as you would if you have a larger workforce with lots of new employees. You’ll likely want to update your inventory before a change, such as making a big business decision or hiring several new employees, to help guide you.