Today, skills management is essential to the success of any service company. But what is competency management, and how can you map the talents of your employees in a practical way?
The global Covid-19 pandemic has turned the corporate landscape upside down. According to McKinsey, 50% of business leaders are currently facing problems related to an unforeseen skills gap. Improved skills management is now essential to identify opportunities for retraining and upskilling, and to maintain business viability.
But where to start? Our comprehensive guide answers this and many other questions.
How does one go about managing skills?
The process of classifying the talents of your workforce and aligning them with current and future business requirements is known as competency management. It is essential to capacity planning and resource management.
Why is it crucial to manage skills?
Skills management is essential from both an operational and a strategic point of view, as it promotes high performance now and in the future.
Strategic skills management is forward-looking. If your skills management approach is successful, your company will have the right talent profile for its future trajectory. You’ll know which skills and competencies are required for the current position, and which are no longer needed. By planning ahead, you’ll be able to acquire and hire the staff you need to achieve your long-term strategic objectives.
Why is skills management crucial in the modern world?
Skills management is all the more crucial when organizations are faced with difficulties :
- A global economic downturn and pressure on corporate margins
- Unprecedented changes inworking procedures.
- Difficulties in finding and retaining exceptional talent
- From perturbations and advances in digital technology, particularly AI and automation.
You can overcome many of these obstacles by planning ahead and monitoring your organizational skills profile. For example, by :
- Loyalizing employees through career advancement and training
- Upgrading staff for tomorrow’s workforce
- Increasing the return on investment of your resources
Let’s take a look at the benefits of talent management in the context of human resources management.
The advantages of talent management
The benefits of skills management are numerous. Here are just a few of them:
1. Filling the skills gap
The huge financial impact of skills mismatch has already been mentioned above. The disparity between a person’s skill set and what is needed for a job is known as the « skills gap » on an individual basis. This is the gap between the total number of skills your company possesses and the skills it needs.
To have a chance of closing the skills gap in your company, you need to identify it. You can assess the skills you have and the skills you need using a skills management approach, and then develop a strategy to close the skills gap.
One way to bridge the skills gap is to set up in-house training programs, recruit new employees who possess the talents you don’t, or use independent contractors to fill temporary gaps.
Retraining the current workforce to fill skills shortages is a top priority, according to 64% of R&D professionals (LinkedIn).
2. Adapting to change
Forrester predicts that automation and artificial intelligence will change or influence 80% of all professions by 2030. Innovation and digitization have made the world change faster than ever before. Your team’s readiness for this changing environment can be accurately assessed with competency management, which also helps you determine what new skills your team will need, and how long it will take to acquire them before using them in your business.
Because the world is changing so rapidly, skills management is an ongoing effort. You need to constantly assess your workers’ skills and adapt them to the latest advances in your sector. This will give you a significant competitive edge and make you more agile and responsive.
3. Meet training requirements
The skills management approach includes the identification of training needs as one of its objectives. Staff training is one of the best expenditures you can make. They become increasingly valuable members of your team, gaining experience and expertise they can use immediately in their careers. What’s more, you benefit from increased commitment, creativity and productivity.
In-house training is often more affordable than hiring new, more experienced staff. What’s more, there’s no learning curve for skilled staff members as there is for new employees, as they’re already familiar with how your business works. On the other hand, if you need to hire staff to fill a skills gap, having a reputation for offering excellent training programs can help you attract the best talent.
4. Optimize use of resources
With competency management, your project manager can assign the right person to the right job at the right time. This is great news for the project’s bottom line, because a person with the right talents will get the job done efficiently. They won’t have to worry about a learning curve, so they’ll finish the project quickly. This keeps projects on track and on time.
But it’s also good news for employee satisfaction. You can show that you value a person’s skills and qualities by giving them tasks that make use of their abilities. What’s more, you give them the opportunity to shine and use their special knowledge to make a significant contribution.
It seems logical to sometimes push people to learn new skills. This is also a component of skills management. For example, you can identify people who use Java at an intermediate level and give them a task that will push them to a higher skill level.
Project resource management software like Teambook will help you optimize the use of your resources and therefore your skills. For the benefit of your teams and your financial performance.
5. Reduced attrition among employees
The importance of skills development for employees may surprise you: according to a Degreed survey of employees, 46% believe that by 2024, their current skills will be obsolete. However, only 34% of employees surveyed by MIT/Deloitte said they were encouraged by the skills development opportunities offered by their company.
This dissatisfaction and, let’s face it, anxiety about the future, can undermine staff morale and drive them to seek better opportunities.
Conversely, training the skills of support staff can help retain employees and reduce attrition. It shows your workers that you value them, respect their contributions and believe they have a bright future with your company.
Employees who have the opportunity to develop professionally feel more fulfilled in their role and are more committed to your company. Employees are more likely to stay with your company longer if they feel they are progressing in their role, which reduces overall staff turnover.
6. Know who to hire and when
Strategic capacity and resource planning is based on skills management procedures. These draw attention to the skills that are constantly in demand, and those that are becoming less so. To guarantee future success, this enables senior managers to make data-driven decisions about which jobs and talents need to be filled.
On a personal level, it’s easier to replace someone if you know exactly what their skills are. Whether it’s an employee on sick leave, parental leave or leaving the company, skills management will help you find new talent. This way, you can maintain organizational continuity and meet deadlines. This is all the more important if you’re looking for a highly technical position or one requiring specialized knowledge.
The capacity management module offered by Teambook gives you a medium-term view (from 6 months to 2 years), enabling you to visualize at a glance staffing loads and requirements. This factual information can then be used as the basis for a targeted hiring strategy based on the skills required for future projects.
The difficulties in managing skills
Now you know the benefits, but what about the difficulties? If competency management were simple to understand, or if it were a standard procedure in every company, we wouldn’t have needed to write this manual. So what’s the problem?
Size of the team
Skills management isn’t too difficult in a small team. It’s quite simple to keep track of the many skills your staff members possess when you have a small team. You can make a mental note of who knows what. You can also use a simple tracking method, such as managing a spreadsheet.
Remote, flexible and hybrid working
The combination of remote and hybrid working adds a further layer of complexity. Colleagues you used to see and work with on a daily basis may no longer even meet up with each other. This not only makes it harder to identify their skills, but also means that they may not be the first people you think of when allocating resources.
The use of competency management software can prove highly advantageous in this situation. It provides a single, central location for tracking all your resources and their levels of expertise. This means you can easily search and filter employee talent to discover the ideal candidate for any position, even if your company employs thousands of people worldwide.
Skills management tools offer a number of advantages
Resource management software such as Teambook often include integrated skills management functions. This means you’ll be able to view employee skills alongside other important data such as availability, productivity and cost to the business.
With this knowledge, you can allocate tasks more intelligently and avoid unpleasant shocks. For example, your first choice will soon retire, won’t have enough work or won’t fit your budget.
In addition, you can drag resources directly from your project plan into resource management software, which will immediately assign tasks to them. Software is not limited to managing operational skills. They can also be used to manage strategic talent.
Scenario planning is also supported by some resource management systems. This is the time to simulate different scenarios (for example, combinations of possible projects or different personnel working on them) to understand the effects on schedules, finances, profitability and other factors.
Is this something your spreadsheet can do? Not sure…
How do you set up a talent management process that works?
The competency management process involves using tools and procedures to identify, assess, improve and manage the skills of team members as they work on projects. You’ll then have a strategy for every talent a team member might need at any given time.
Recruitment, selection and development are all covered by the complex and integrated process of talent management, which is an essential component of the HR function. You need to know how to properly manage the talents of your employees if you are to make the most of them.
Here are a few tips to help you improve your talent management process:
Recruitment, retention, training, development, capacity planning, resource allocation and other activities are all part of the competency management process. It therefore involves members of different teams. Although it is generally controlled by HR, it incorporates the views of project managers and department heads, and influences choices made at higher levels of the company.
Here’s how to set up an effective talent management process in your company:
1. Identify the skills you need
You must first identify the talent you need to assess whether you have it to ensure sustainability and future success. To help HR determine the optimal skill set for the future workforce, it’s imperative that senior managers communicate their vision of the future and the planned work program.
Planning future projects to understand their influence on capacity, skills demand and other factors can be facilitated by the use of scenario planning.
Armed with this information, they can then assess the extent to which the company’s talent profile matches its future needs, and begin to formulate a plan to close the gap.
2. Assessing the availability of talent
You need to know the skills currently held by your staff in order to compare the supply and demand of skills. It’s time to create a central talent register for your staff, if you don’t already have one. Create a profile that lists the skills, experience, training and other details of each employee.
Also examine capacity and utilization data, if available. You may need to hire additional staff immediately if you find that certain people, positions or skill sets are still in high demand.
3. Develop a plan to bridge the gap
By knowing what talent is most in demand, your HR staff can start planning ahead. How will they bridge the gap?
- by retraining existing staff?
- by recruiting new staff?
- using subcontractors?
They will need to consider issues such as the timeframe in which the skills will be required, the cost of each choice, and the additional benefits the company could gain (such as employee retention).
4. Test yourself and improve your skills
It is in the interests of American business to upgrade the skills of at least 25% of workers who lose their jobs, according to a WEF cost-benefit analysis.
Studies show that investing in staff development and training programs is a faster and less costly strategy than sourcing talent from outside. Improving skills does not always come with the same expense as hiring and integrating new employees, as Gallup shows. According to TechTarget, the average cost of hiring a new employee in the US is $4,425, which includes advertising and hiring costs.
According to a Citrix survey, 62% of HR managers believe that to be competitive in a global labor market, employees should retrain or upgrade their skills at least once a year.
Your staff’s willingness to retrain is great news. 77% of employees surveyed by PwC Global say they are willing to retrain fully or acquire new skills.
5. Hire the expertise you don’t have
It’s time to hire more people if you can’t improve the skills of your current staff, and if the need arises.
By 2023, one of the trends in the workplace will be the increasing use of competency-based hiring rather than traditional, step-by-step career advancement. This trend reflects the radical evolution of jobs over the last ten years. Experience gained in previous positions may not prepare candidates for their future roles. Having a specific job title on a CV is not as important as demonstrating your talents to potential employers.
Knowledge workers face particularly fierce competition in the global talent market. They are free to choose the best benefits and work from anywhere. To attract and retain the best employees, companies need to think about the whole package, not just the salary. Our experience has shown that autonomy and flexible working hours are a good place to start.
6. Use the right talent management software
The benefits of talent management tools have already been mentioned. Although specialized talent management software exists, it is not necessarily comprehensive. Resource management software that integrates competency management functions will deliver better results.
Thanks to a centralized resource pool, people in different locations, even in different time zones, can view your team’s talent profile and select the best candidates for certain tasks.
You can quickly identify your best solutions by seeing how different resource allocations affect project budgets and schedules when you can reserve people’s time for projects.
It’s easy to see which positions or skills are consistently in high demand thanks to graphics and usage statistics. This encourages initiatives related to hiring, training and capacity planning. It also enables realistic scheduling and workload management, allowing your projects and staff to move forward smoothly!
You won’t have to switch from one program to another to maximize your resources on each project and satisfy your customers when your skills management, resource planning and project management tools are all in one place.
Your human resources staff will be equally satisfied. Creating a talent pool capable of meeting the ever-changing demands of your business is one of the main challenges facing HR and talent management experts.
You can hire and retrain workers more strategically by aligning your project pipeline with your skills profile, combining skills management with resource and project management. This enables your company to
- Fill skills shortages as soon as possible to avoid project delays and customer dissatisfaction.
- Hire as cheaply as possible, for example by recruiting entry-level employees and training them in-house.
- Choose whether or not to hire independent contractors, whose salaries may be lower than those of permanent staff.
