The 6 Skills Management Best Practices Your Business Needs

Effective skills management is key to maximizing the time and talent of your employees. It leads to better allocation accuracy and resource utilization, higher engagement and quality, and happier clients and staff.

Whether you’re new to skills management – in which case head to our Beginner’s Guide to Skills Management next – or a seasoned pro looking to create a more effective skills management strategy, you’re in the right place.

In our Skills Management Best Practices to Maximize Talent webinar, we spoke to three leading lights of resource management to get their best practices for tracking and managing skills information – from setting up a skills matrix to maximizing adoption. 

So get ready to learn from the best – Cyd Mills, Julie McKelvey, and Oli Meager – who recommend you: 

1. Maintain a сlear and navigable skills inventory

2. Standardize taxonomies and role definitions

3. Aim for simplicity and practicality

4. Link skills management to business outcomes

5. Establish a cross-functional skills focus group

6. Implement a consistent and reliable skills data update process

1. Maintain a clear and navigable skills inventory

The first step to effective skills management and tracking is to have a clear, centralized skills inventory. This may be in skills management software or another existing system.

But, ideally, whatever system you're using to build your skills inventory should integrate (or live within) your resource management software – as this allows you to use skills information for resource scheduling and reporting.

It should include key attributes such as: 

• Role
• Location/time zone
• Technical skills
• Soft skills
• Management skills
• Leadership skills
• Language skills 
• Certifications

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Your skills inventory will be used by different people for different purposes:

• Employees and/or their managers will use the system to input and manage information.‍
• Resource and project managers will use skills data alongside availability and capacity information when assigning people to projects.‍
• Human Resources and Learning teams may use it to inform recruitment and workforce development.‍
• Business development and sales colleagues could use it to match project sales to skill capacity.‍
• Senior leaders may use it for reporting on utilization and capacity trends to inform workforce planning.

So our experts describe a Goldilocks-like scenario where the level of detail in your skills inventory is juuuust right. It needs enough detail to make it useful, but not so detailed that it’s overly complicated and overwhelming. 

Discover how to create a skills matrix as a first step ➡️

2. Standardize taxonomies and role definitions

Key to the success of your skills inventory’s usability and usefulness will be standardization – using standard terminology and language to describe skills. It ensures that all the various users of the system are speaking the same language.

Consider the examples below:

• Programming languages vs  programming vs Python 
• Graphic design vs design vs AdobeCS
• Team work vs teaming vs working with others 

These technical and soft skills could be described in any of these ways, depending on the language and granularity used. But this can cause problems with allocating, reporting, and more. 

It’s important to make sure that the categories of work are similar," says Cyd. "So engineers are engineers, solutions architects are solutions architects. So you're able to really match up that role to the appropriate work, and you don't have random titling out there that throws off the simplification and the intuitiveness of using your skills database."

It isn’t just about making things simple for managers but for employees too, as Oli explains: 

If I've got multiple different profiles in multiple different systems – but one skill in one system says I've got great 'teamwork skills', then the other system says it's 'teaming skills', and then the other system says it's 'working together with other people' – I get a bit annoyed as an employee at that point. So you need a common language and technology that can extract the skills data in a way that drives a common experience."

Our experts recommend:

• Standardizing skill terminology and roles/titles to ensure consistency across teams.
• Defining job titles and project roles for organization-wide classification.
• Thinking about the language clients use, not just your internal teams.

Learn more: Understanding Role Design ➡️

3. Aim for simplicity and practicality 

Above, we’ve mentioned the need for skills inventories to be intuitive and taxonomies to be manageable. It’s all about keeping skills management simple.

Why? Because complicated systems are less likely to be adhered to, and more at risk of error. 

Let’s start with keeping taxonomies simple. Oli Meager points out that AI makes it possible to create incredibly rich and detailed taxonomies. But they’re too much for people to practically use. Don’t create 1,000s of skills and subskills just for the sake of it. Think what information will actually be useful and usable. 

There's no point having 65,000 skills in your skills taxonomy. It just makes a system too complex to actually be useful. Think what is the work that is being done? What are the projects that are being sold? What are the programs of work that need to be delivered on?", recommends Oli.

This also applies to how many skills you list in people’s profiles.

‍If you go too complex, it doesn't work either. If the project has 65 skills aligned to a role, and then someone as an individual with 57 skills on their profile matching within a system, it just doesn't work very well."

Then there’s your skills inventory. "Start small and iterate," says Oli. Less is more when managing a skills database. Aim for minimal viable information to power your use case.  

4. Link skills management to business outcomes

Getting buy-in was a core theme discussed by our panel. Introducing any new process requires time, patience, and goodwill. 

One way to achieve this is by clearing demonstrating the benefits of skills mapping, tracking, and management to different stakeholders – from better utilization rates and productivity, to staff and career development.

We can’t put it any better than Oli did in our webinar…  

"So often we forget that human capital is the most costly part of any business. Doing business right means we have to be able to manage the skills of our people in the right way. And therefore, skills management isn't just an HR initiative. It's a critical business initiative.

Without a structured approach to it, organizations of all shapes and sizes are going to face costly inefficiencies around skills and people, like overhiring, mismatched project staffing, poor staff satisfaction and turnover. It’s about unlocking time and increasing money."

Here’s what our panel recommends when it comes to evidencing tangible business outcomes. 

• Tie resource skills to project needs for better staffing and capacity planning.
• Use skills data for talent development - conduct a skill gap analysis and plan targeted training programs.
• Connect financial data with skills data to demonstrate the impact on the bottom line.

There’s so much more we could say here but it would take up way too much space. So head over to our Beginner’s Guide to Skills Tracking next for a detailed list of the business and bottom-line benefits of better skills management. 

5. Establish a cross-functional skills focus group

We’ve mentioned that different teams will use your skills inventory for different purposes. So Cyd Mills suggests creating a cross-functional focus group to oversee it. This will ensure the data collected and processes used are suitable for all stakeholder groups. 

We’re going to defer fully to Cyd on this one, who describes it as her ‘dream’ to have a group like this:

You get department heads together – from the different departments that need to be involved in skills – at a regular cadence meeting cycle. So your resource manager, your project manager, your PMO director, HR, your delivery managers, definitely someone from sales… You get all of those folks together to go through and review the skills matrix and ask 'What are the skills needed?'
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And then you have delivery managers evaluating their technical teams and really looking at the skills that each team member has and updating that information. It's a really great way to kind of gather the people that can help together and make sure that you're also maintaining that skills matrix on a regular basis."

Julie McKelvey agrees that this cross-functional group would be a great way to educate different people about the importance of a skills inventory and to get further stakeholder buy-in.

This would be the perfect place to go through those pieces around education and buy-in and make sure that everyone who needs to be involved has the opportunity to have the open conversation, ask the questions, and really make sure that everyone is aligned."

They recommend the following actions to make this dream a reality: 

• Involve Resource Management, Project Management, Delivery, Sales, and HR.
• Pick a cadence that makes sense for your organization – to tie into your skills update process.
• Task the group with maintaining the skills inventory and governance of processes.
• Regularly assess pain points in the skills-tracking process and refine it as necessary.

6. Implement a consistent and reliable skills data update process

Your skills inventory is only as great as the information that’s in it," says Julie McKelvey. "And that information gets stale and, when that happens, it becomes completely ineffective." 

This is why our expert panel recommends a quarterly update process to keep skills data fresh and functional – with individual employees updating their own skills profile, but with checks and validation from a manager. 

You need to update it quarterly because a lot can happen in a quarter," explains Julie. "You have cross-functional training plans in place, you have people shadowing projects, and all of that helps people obtain new skills. Generally, there’s some sort of approval process in place before those skills are added to their profile, whether it’s via a technical manager or a delivery manager, to make sure those skills are validated as well." 

However, our experts recognize that this is yet another responsibility for already busy people. They re-emphasize the importance of keeping processes as quick and simple as possible, to reduce resistance and delays in doing them. 

Remember, your update isn’t just concerned with employee skills themselves. It’s also an opportunity for your focus group – see above – to check your taxonomy is still working. Have some skills or technologies become obsolete? Are new skills emerging? Your taxonomy should reflect these changes to remain relevant. 

• Update skills at least once or twice a year, with managers validating progress.
• Use peer, manager, or project engagement validation to ensure accuracy.

Improve your skills management with Runn 

Runn is a resource management platform that makes managing, tracking, and acting on skills data super easy – whether you’re a resource manager who wants to improve allocation accuracy, or a senior leader looking for insights to inform strategic workforce planning. 

‍Learn more about resource scheduling and reporting in Runn ➡️