Skills Audit 101: How to Uncover Hidden Talents in Your Line-up

Skills are the lifeblood of any business, and recruiters increasingly prioritize them over candidate background and education during talent acquisition. 

The number of job listings that mention specific skills, competencies, and key responsibilities increased by 21% between 2020 and 2021. 

At the same time, the number of jobs that didn't require a degree also rose 40% during the same period. 

Skills, including technical (hard skills), soft skills, workplace skills, and transferable skills, are very much in demand. 

But skills management can be tricky for HR to get to grips with. 

• How can leaders take stock of the array of skills in their organizational line-ups? 
• How do you identify skills gaps and uncover hidden skills you didn't even know existed? 

The answer is to conduct a skills audit. 

This article covers everything you need to know about tracking skills and enabling your employees to enhance their skill sets while working for you. 

🧐 What is a skills audit?

A skills audit is a comprehensive assessment of an individual or team's skills, knowledge, and competencies. 

You can use personal and group skills audits to identify improvement areas and enhance employees' skill sets. 

Leadership guide Mike Ashie explains: "Regular skills audits can provide staff members with the invaluable opportunity to learn and develop; feedback helps staff identify strengths, fill gaps in knowledge or ability—plus it's a huge boost to morale. Everyone wins when staff members are engaged and motivated."

Organizations can use a skills audit for an overall skills gap analysis.

The difference? 

Your skills audit will focus on your teams' current skill sets.

In contrast, a skills gap analysis uses your audit data as a benchmark, identifies the required skill sets for future growth, and determines how to bridge the gap between A and B.

⏰ When's the best time for a skills audit?

A skills audit isn't a one-off event or something you'll execute weekly. 

As a rule of thumb, carry out a skills audit at least once a year or whenever your organization is in flux during:

• L&D process updates;
• periods of significant change; 
• projects requiring specialist skills; 
• new roles and talent management initiatives; 
• missed performance targets. 

L&D process updates 

Learning and development go hand in hand with skills. 

When planning your upcoming training strategies, run an audit to identify the foundation skills you wish to build upon. Upskilling will engage your employees, improve retention rates and boost productivity.

Sylwia Smietanko, HR Specialist & Recruiter at Passport Photo Online, describes the company's approach to carrying out a skills audit. She told us: 

"Our skills audit changed our strategy regarding the allocation of training and development resources. Previously, we made decisions based on current trends and other companies' experiences. But despite our best intentions, some training was a waste of time as not all skills were necessary for our company. Now, thanks to a skills audit, we can make thoughtful, data-driven decisions. Since we changed our approach, our investment in training has begun to return as employees deliver better results."

Periods of significant change 

The current layoffs in the tech and financial services industries mean that ex-employees from the likes of Meta, Twitter, Amazon, Spotify, and Salesforce are leaving their former companies, taking their skill sets with them. 

HR leads in their former companies should conduct a skills audit to better understand their teams' current skill level since the departures, particularly in considerably altered teams and departments.

Similarly, mergers and acquisitions present another chance to take stock of current positions. When two companies come together, staff from both parties will bring different skills and experiences to the table. 

Performing a skills audit is the ideal way to identify which skill sets will stay and which you should develop.

Projects requiring specialist skills 

Future-facing companies often take on new projects or expand operations into new or adjacent domains, like Walmart moving into healthcare. In these cases, it's crucial to understand the existing skill sets within the company and any niche skills you may require moving forward. 

Let's say your company is about to enter the world of AI and machine learning technologies. A skills audit will identify which team members already have the necessary knowledge or spot who else you could quickly train in these areas. 

New roles and talent management initiatives 

Use your skills audit to define your ideal hire's desired skills and attributes. 

With a skills audit, you'll be able to target the right people with your recruitment messaging and ensure you're adding breadth to your skills pool rather than hiring more of the same. 

When designing new talent management initiatives and people strategies, your skills audit will reveal what you need on the ground, so you can be mindful of what to look for.

Missed performance targets 

If you see frequent missed performance targets in one or more departments, use your audit data to identify what skills may be lacking and where you could invest in training.

Your goal isn't to play the blame game. But instead, you'll want to take a data-driven approach to understand the potential root cause of a problem and put measures in place to improve employee performance to hit your targets next cycle. 

🤩 5 Benefits of conducting regular skills audits

Skills auditing delivers tangible results for your organization. Check out these top five reasons to commit to the process.

Uncover skill gaps 

McKinsey data reveals that 87% of organizations know they already have skills gaps or expect to within the next five years. 

The challenge is understanding where the gaps are or forecasting where they might exist in the near future. 

Karolina Kijowska, Head of People at PhotoAiD, told us: "The most important benefit of conducting a skills audit for your organization is really understanding what strengths and weaknesses your team possesses. Then, audits can be used to implement strategies that boost employee performance and morale while healing any deficiencies."

Match skill sets to specific roles 

You'll find the best employees for specific roles or projects by understanding your team's current skill sets. 

Although skills audits are commonly associated with gaps, you may also reveal a surplus of unused skills that may be valuable now or in the future. Document these and match them to current or upcoming roles. 

➡️ Learn more about how to align employee skills with company goals. 

Repurposing talent to future-proof your organization 

Companies will phase out some organizational roles as technology gains pace. Conducting a recurring skills audit ensures your talent pool is agile, allowing you to quickly repurpose skills from a defunct position into a new role.

Align team goals with skills 

When you have the right skills to support team goals, it's easier for your organization to meet its targets. 

Matthew Ramirez, CEO of Rephrasely, expands: 

"A skills audit shows the gaps in your team's knowledge, which can help you create a training plan. You can work with your team to develop the best training plan to close those knowledge gaps. This training can be formal or informal, depending on your needs. If the skills audit reveals a skills deficit, then you may want to consider hiring new talent that has those skills."

Identify L&D priorities 

A quality audit will inform how you design your upcoming training programs. 

Lisa Dietrich, Partner at GiroKonto, told us: "By understanding what existing and potential employees can offer, companies can create more effective job descriptions and manage employee development more effectively."

Your audit may also guide the specific L&D training formats to focus on, for example, online courses, microlearning, and mentorship opportunities. 

➡️ Check out our training needs assessment guide here.

💪 9 Skills you need to audit ASAP

"Skills" is a broad term, so what specific skills should you focus on to maximize the ROI of your audit? 

Check out this list of skills to assess as a top priority. 

Communication skills 

Interpersonal skills like communication and active listening are essential for building a strong brand and promoting a positive reputation. Effective communication is crucial in establishing and maintaining relationships with customers, employees, partners, and stakeholders. The ability to communicate: 

• builds trust;
• increases transparency;
• promotes collaboration;
• resolves conflicts;
• ensures clear and consistent messaging. 

Empathy 

Empathy skills also play a critical role in relationship building. When leaders and employees understand and respond to the emotions and experiences of others, they're better equipped to: 

• Make decisions based on the perspectives of others.
• Create an inclusive and supportive work environment. 
• Foster a culture of innovation and problem-solving. 
• Manage organizational change.

As one of the essential soft skills, empathy puts organizations in a strong position by promoting greater employee engagement, motivation, and job satisfaction, leading to improved performance and an increased competitive edge.

Organizational skills

Organizational skills include staying on top of tasks, thinking strategically, and working efficiently. Businesses need staff with time management and productivity skills to ensure that tasks are completed on time and to the highest standards. Organizational skills help companies to: 

• Manage multiple projects at once.
• Plan and schedule tasks according to priority.
• Identify and address potential problems quickly.
• Streamline processes for greater efficiency.

Green skills

• Organizations face increasing pressure to address the impacts of their operations on the environment and society. 
• The ability to understand and respond to sustainability challenges is crucial for success.
• Green skills help organizations to: 
• Identify and prioritize sustainable business practices.
• Reduce their environmental impact.
• Create more efficient and effective operations.
• Improve their reputation by committing to corporate social responsibility.

Critical thinking and analytical skills

The ability to analyze information, identify trends and patterns, and evaluate the potential consequences of different courses of action is crucial for making effective decisions and staying ahead of the curve. Analytical and critical thinking skills allow leaders to: 

• Assess the strengths and weaknesses of different arguments and approaches.
• Make sound decisions about investments, operations, and other key business aspects.
• Avoid biases and blind spots.
• Evaluate risks and opportunities. 

In a complex business environment, these skills allow organizations to adapt to change using data-driven decisions to drive growth and innovation. 

➡️ Learn how to foster critical thinking in the workplace to drive better results. 

Teamwork 

Leveraging the strengths and skills of multiple individuals allows organizations to achieve common goals and objectives. Teamwork is essential for: 

• Promoting innovation. 
• Bringing together diverse perspectives and experiences.
• Tackling complex problems.
• Fostering a positive work environment.
• Boosting productivity and efficiency.
• Retaining top talent. 

Mad skills 

Leisure skills or hobbies, often called "mad skills," can positively impact the workplace by bringing unique perspectives, creativity, and expertise to the table. 

For example, an employee who is an avid photographer may bring a unique perspective to a marketing project. 

At the same time, someone who enjoys amateur dramatics may have the confidence to deliver a presentation. 

Encouraging employees to bring their diverse experiences and outside interests to the workplace helps to:

• Foster a more dynamic and inclusive work environment where employees feel valued and engaged.
• Better balance work and life, as they provide opportunities for personal growth and fulfillment outside work. 
• Improve job satisfaction, reduced stress, and increased productivity.

It can take some digging to uncover employees' hidden additional skills. ‍

Tip: Use pulse surveys or self-evaluations to encourage your team to discuss their lives outside work.

Business acumen 

Business acumen is the understanding and ability to navigate the workings of a business, including its financial, operational, and market dynamics. It's essential for helping leaders and employees understand the consequences of their actions in the overall business context.

Strong business skills enable organizations to: 

• Respond quickly and effectively to changing market conditions and customer needs.
• Make data-driven decisions.
• Improve their financial performance.
• Understand the trade-offs between short-term and long-term goals.

Leadership skills 

Leadership skills set the direction, tone, and vision for the organization. These are crucial for guiding organizations through uncertainty and change while creating a positive and inclusive work environment.

Strong leaders can also create a vision and inspire others to work towards it, which is critical for building momentum and driving results. 

They'll use many of the above skills, excelling in empathy, communication, critical thinking, teamwork, and business acumen. 

💡 5 Steps to complete your skills audit operation 

Follow these five steps and best practices to complete your internal audit of employees.

Set goals for your skills audit 

As with any HR process, set measurable goals and objectives to ensure your audit has a real purpose. 

Consider what you want to gain from the process and how it will help your organizational goals. 

Use the SMART framework to set goals that are: 

• Specific 
• Measurable
• Assignable 
• Realistic 
• Time-specific 

➡️ Check out how the SMART framework directs teams toward their goals.  

Clarify roles  

List all roles within your organization and the must-have skills associated with each. This step encourages you to zoom into each position's specific tasks and responsibilities.

Max Benz, CEO and co-founder of Banking Geek, explains how to do this: 

"The first step is to create an inventory of the required roles within the company, as well as any qualifications or certifications necessary for those positions. Once you have identified all the roles needed in your organization, evaluate what skills are required for each role based on job requirements and other relevant criteria. 

Additionally, consider which employees currently possess these skills versus which ones need additional training to meet expectations. When assessing the skills levels of current staff, be sure to include feedback from managers who work closely with them. Finally, use this data to develop a plan for upskilling employees or hiring new staff when necessary."

➡️ Use a competency model to build a clear career progression framework for each role.

Choose your assessment method

Typically, you'll use survey questions or 1:1 meetings to understand the breadth of skills in your organization and how you could repurpose them, as required.

Alternatively, it's possible to use competency-based assessments like job simulations or work samples to evaluate the depth of a specific skill set. Supporting documentation such as certifications, historic performance reviews, or managerial reviews can also provide value. 

Survey your employees 

Abhishek Shah, HR Manager of the assessment platform Testlify, explains "Engaging employees in the skills audit can provide valuable insights and increase their buy-in for development and training programs."

The entire organization must consider a skills audit as a critical business need supported by HR rather than an HR side project carried out by internal audit leaders. 

HR will either survey employees directly or enlist the support of line managers to collect skills data. 

Collect feedback on skills 

Before you begin, always ensure you remain compliant and can legally collect employee data to present in your audit report.

Explain the data collection system to employees and outline what you need from them. 

Tip #1: We strongly recommend correlating your skills audit with a broader skills gap analysis process.

Tip #2: Use the insights generated to create hiring, training, and development plans (including reskilling and upskilling initiatives). 

➡️ Check out our skills gap analysis process explained.

➡️ Grow your people and your business with Zavvy

Zavvy offers the following ways to understand the breadth of skills in your organization:  

• 👂 Employee surveys: collect a wide range of skills data from your employees and analyze the results to improve internal processes. For example, this might include an analysis of the current level of skills in your line-up. 
• 🤝 1:1s: regular check-ins allow managers to match relevant skills with ongoing or upcoming projects. These one-on-one interviews also enable direct reports to discuss skills gained from past work and outside interests. 
• 🪞 Self-evaluation: employees can honestly appraise their current strengths and suggest paths for improvement to reach their career goals. 
• 360-degree reviews: this holistic approach enables you to collect feedback from colleagues, managers, and direct reports to provide honest insights and guidance on each other's skills.

Discover how you can grow your people's skills with Zavvy. Booking a free demo of our suite of HR tools.