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Talent Development
Aaditya Mandloi
Written by :
Aaditya Mandloi
April 12, 2024
16 min read

How to Conduct a Skills Audit: A Step-by-Step Guide for 2024

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Many organizations struggle to understand their employees' true capabilities. Lack of essential insights into where employees' strengths lie and where they are unsuitable for a project or task subsequently results in underutilization of the workforce, ultimately hindering talent management, effective training, and organizational success.

Global Trends, based on a World Economic Forum study, suggests that by 2025, half of the global workforce will need reskilling.

To reskill or upskill companies need to conduct skills audit to gain understanding of existing skills, skill gaps, and plan training initiatives. This is where they turn towards skills audit.

A Skills Audit cuts through the confusion, offering a clear picture of your workforce's skillsets. In this blog, we’ll understand the process of conducting a skills audit. Here’s how to conduct one.

Step-by-Step Guide to Conducting a Skills Audit

Now that we’ve understood today’s dynamic workforce necessitates a skills audit, it’s time to dive deep and understand how to conduct a skills audit in this comprehensive step-by-step guide.

1. Define Scope and Purpose

A skills audit requires time and capital, so getting the stakeholder buy-in is important before proceeding with it. You need to treat it as a project, for which you will need a project manager, clear key responsibilities, a budget, and a well-defined purpose.

You will also need to be able to come up with a scope that makes the skills audit meaningful. This will ensure that you’re not auditing for obsolete skills and skills that serve no business purpose.

Define the scope of your audit based on your organization’s strategy and then break these down into categories. For example:

  • Technical skills (broken down into subcategories)
  • Leadership skills (based on your leadership pillars)
  • Interpersonal skills.

Include in the scope the type of information you will collect, for example:

  • Certificates
  • Performance review information
  • Managerial reviews.

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2. Create a Skills Inventory

To successfully do a skills audit, you first need to inventory the skills of your workforce. Creating a skills inventory involves systematically collecting, organizing, and maintaining information about your employees' skills, experiences, and qualifications. Start by:

a. Identifying Core Competencies: Identify core competencies by analyzing job roles, gathering input from stakeholders, and reviewing performance data, focusing on consistently emphasized skills crucial for organizational success.

b. Assessing Technical and Soft Skills: Technical skills can be assessed through tests, simulations, and certifications, while soft skills can be evaluated through self-assessments, behavioral interviews, and work sample tests.

3. Choose Assessment Methods

Choosing the right assessment for your skills audit depends on several factors, including the type of skills, resources, and goals. For instance, if you’re evaluating technical skills, it might require objective tests, while soft skills benefit from self-assessments or simulated scenarios. There are mainly three methods that you can choose from:

a. Self-Assessment: In this method, employees evaluate their own skills, knowledge, and abilities. This involves employees completing questionnaires or surveys, reflecting on their technical skills, knowledge, and soft skills like communication or teamwork. While cost-effective and efficient, self-assessments can be susceptible to bias as individuals might overestimate or underestimate their abilities.

b. Managerial Evaluation: In this type of assessment, Manager assess their team members skillsets. This involves reviewing past performance, conducting one-on-one discussions, and leveraging their own knowledge of their team's capabilities. This method offers valuable insights into employee strengths, weaknesses, and areas for development based on real- world work experiences.

c. External Evaluation: This method involves bringing in a third party to assess your workforce's skills. They analyze data, conduct assessments, benchmark your team against industry standards, and offer an independent report with findings, gap identification, and improvement recommendations. While providing objectivity and expertise, external evaluations can be costly, time-consuming, and lack full access to internal context.

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4. Analyze Results

In this step, raw data is transformed into actionable insights. This involves cleaning and organizing the information, then uncovering trends, skill levels, and crucial skill gaps.

a. Identifying Strengths and Weaknesses: A Skills Intelligence platform, with the help of AI and Machine Learning, can easily conduct an in-depth analysis of your workforce, pinpointing their strengths and weaknesses to a T. Traditionally, this was done with statistical analysis, data visualization tools, or skill gap matrices by manually looking for commonalities, gaps, and strengths across individuals, teams, and departments.

b. Recognizing Skill Gaps: Start by mapping essential skills needed for each role and comparing them against the collected data, like assessments and evaluations. By pinpointing the discrepancies between required and existing skills, you gain a clear picture of areas requiring development, allowing you to prioritize your upskilling and reskilling efforts strategically.

5. Develop Action Plans

This is the final stage of your skills audit. In this step, you translate insights into actionable strategies, define goals, develop strategies, allocate resources, establish timelines, and monitor the impact.

a. Setting Goals for Improvement: Once the skill gaps are identified, set SMART goals to close them and prioritize the ones with the most impact and urgency. You’ll also have to define specific skill development targets and set measurable benchmarks to track progress to ensure your plan is clear, focused, and quantifiable.

b. Planning Training and Development Initiatives: Formulate specific actions to address each gap. Plan training and development programs for employees who need upskilling or reskilling, encourage internal mobility to leverage existing skill sets, or you can consider hiring for specific skills.

Thanks to the emergence of AI in every aspect of workforce optimization, you don’t have to go through this laborious process manually, time and again. Powerful skills intelligence platforms like iMocha automate most of the skills audit process for you with the help of AI and Machine learning.

While the process mentioned in this guide is straightforward, the implementation part can be daunting, depending on the size of your organization. Especially if you’re an enterprise, creating taxonomies and ontologies, defining competencies, assessments, validation, and the whole works at scale is a huge undertaking.

Also, Skills Audits are not one-offs; you’ll need regular ones as your talent pool refreshes or existing employees make internal moves. This is one of the primary reasons to go for a comprehensive skills audit, too. Use these skills audit tools to assess your employees' skills and identify training gaps. They can help you understand your team's strengths and identify areas for improvement.

We’ve reached the end of the blog; we hope this guide has equipped you with the essential knowledge to conduct a skills audit.

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What people are asking about skills audit

1. What are the key stages in a skills audit?

  • Setting Goals & Objectives
  • Data Collection
  • Analysis & Review
  • Action Planning
  • Implementation & Monitoring

2. How do I audit my team skills?

Understanding your team's strengths and weaknesses is key to success. Conduct a skills audit by defining goals, collecting data through surveys or assessments, analyzing the results, and developing an action plan to address skill gaps through training, internal mobility, or hiring. This empowers you to build a more capable workforce and achieve your business objectives.

3. How is a skills intelligence platform helpful when conducting a skills audit?

Skills intelligence platforms streamline data collection through standardized tools, offer advanced analytics to uncover hidden trends and suggest relevant training or internal mobility solutions based on identified gaps. Additionally, they enable continuous monitoring of progress, ensuring your efforts translate into a skilled and adaptable workforce. In essence, these platforms save time, improve accuracy, and provide valuable insights to guide your talent management strategies.

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