Why you should create a skills inventory and how to do it successfully

As business and technology develop, there is a growing demand for new skills and talent. This means your business must focus on developing its internal talent.

A skills inventory helps organizations spot and cover talent gaps easily. With skills inventories, you can learn more about your company’s capacities and nurture your workers’ skills effectively. This includes training employees to develop leadership skills, which can bolster their success.

Creating a skills inventory that yields results can be tricky, especially without the proper guidance. This article explains what a skills inventory is, why creating one is crucial, and how to do so successfully.

What is a skills inventory?

A skills inventory is an internal resource that enables a company to record its employees’ capacities, experiences, and goals. It is a comprehensive description of the collective skills and talents of the organization’s employees.

The ultimate goal of using skills inventories is to boost company growth. You can create one to better understand your company’s capabilities and use this knowledge when developing future plans. 

Typically, businesses derive their skills inventories from research they have conducted on their employees. They use the results of this research as a means of self-assessment to understand how to build their workforce.

You can use employee skills tests to find out more about your employees’ skills. These tests could be self-assessments or general performance tests.

Various companies design their skills inventories differently. They can take the form of pie charts, bar charts, or graphs.

Why should you create a skills inventory?

A well-organized skills inventory can serve as the foundation for business growth. This is because a good skills inventory will give you insights into your company’s strengths and weaknesses and help you make adequate plans for future goals.

These benefits are critical for many organizations: 60% of HR leaders reported that developing critical skills and competencies would be their top priority in 2022.

Besides its benefits for planning and strategizing, a skills inventory has many other benefits. Below, we will discuss a few:

Helps track employee growth

With a regularly updated skills inventory, you can actively track how much your employees grow and how quickly. This is because it enables you to compare the skills they possessed when they were first hired into your company with those they have now.

Serves as a basis for employee training

Since skills inventories show you how skilled your employees are, you can also use them as a basis to upskill your employees through training. A skills inventory shows you not only your workforce’s current capabilities but also their potential.

With this information, you can determine whether to tailor employees’ training to a beginner, intermediate, or expert level.

Enables you to identify and fill skills gaps

Skills inventories point out the skills that are absent in your business. This means you can focus more on recruiting people with the skills your business needs during talent acquisition.

Around 75% of companies struggle with recruitment because of talent shortages and difficulty hiring. A skills inventory prevents this struggle by making your hiring easier since you know exactly what to look for.

Measures your organization’s capacities

The primary purpose of a good skills inventory is to measure your organization’s abilities. It keeps you informed about what tasks your workforce as a whole can perform so that you can make better decisions based on these insights.

Supports workforce planning

Workforce planning is one of the critical factors that can boost a company’s success. Yet, it has been estimated that only 40% to 50% of employers have an effective workforce plan in place.

To make effective plans, you must have adequate resources. This is where a skills inventory comes in.

With a skills inventory, you can plan for the number of people you want to hire and the roles you need to recruit for. You can also analyze skill gaps so that you know what skills to look for during recruitment.

Since the inventory tells you how skilled each employee is, it points you toward those who are suited for promotion. Ultimately, it helps you make more informed and effective decisions concerning your workforce structure.

How to create a skills inventory in 8 steps

Creating a skills inventory for your organization is a big deal, so you must take extra care while designing the inventory. Here are the eight steps to creating the perfect skills inventory for your business:

1. Determine how you will use the inventory

Before you start creating your skills inventory, you must determine how you will use it. For example, you could use it to plan an upcoming employee training program, support general company growth, or develop a hiring plan.

2. Decide which skills to include in the inventory

After determining the goal of your skills inventory, decide which skills to include in it. These could either be soft skills like communication and collaborative abilities or technical skills like programming skills.

Although there are no rules when it comes to choosing the skills to include in your inventory, it’s always a good idea to add abilities like leadership and situational judgment.

3. Evaluate your employees’ skill level

Assessing your employees’ skills is a critical step that you must carry out before setting up your skills inventory. It reveals your workforce’s capacity, enabling you to make more informed decisions.

You can assess their skills using pre-employment skills testing or one-on-one sessions in which you communicate with the employees and learn more about what they can and can’t do.

4. Record your findings

Next, make a list of your employees and the skills each of them have. There are various ways to record the information you obtained from their results on skills assessments, including using tables or bulleted lists.

Whichever method you apply, you must ensure that you organize and structure the information clearly and logically and that it is accurate.

5. Create a skills matrix to have an overview of employees’ skills

A skills matrix is a visual representation of the data on your workers’ skills. When creating your skills matrix, you must ensure that it shows the skills of each employee at a glance.

You could use bar charts, graphs, spreadsheets, and tables to represent how skilled each employee is. This will help you make decisions faster since you won’t have to spend time sorting through scattered information to gain useful insights.

6. Identify areas that need improvement

It’s always a good idea to go through your inventory after you’ve created it to spot places that need improvement. These may include essential skills that are in low supply or areas that need new talent. This will help you find opportunities to improve.

7. Make the inventory a document that you can update

For your skills inventory to perform its function properly, you must update it regularly. Therefore, you should make it an editable document. This way, you can share it with your board of directors for review and analysis.

8. Share your skills inventory with your core disciplinary team

The final step in creating the perfect skills inventory is to share the document with your core disciplinary team. This helps you make better decisions concerning your workforce and company.

The perfect skills assessment for your skills inventory

Testing your employees’ skills is one of the core steps to creating a stellar skills inventory. Hence, you must choose a flexible and reliable assessment method to evaluate these skills.

Fortunately, TestGorilla offers seamless and bias-free employee testing. Our test library has numerous tests you can include in your inventory.

Visit our website today to sign up for free and start creating the perfect skills inventory for your organization.