Today’s employers face serious challenges in areas such as workforce planning, talent development and financial performance. A common factor among them is skills. Employees’ skill sets significantly influence an organization’s efficiency and productivity, as well as its approach to hiring and training.
But what are those skills exactly? One way to gather and organize this mission-critical information is to create a unified skills taxonomy.
Standardized framework
A unified skills taxonomy is a standardized framework for how an employer defines, categorizes and structures the skills used or needed across the organization. Rather than relying on vague or inconsistently written job descriptions, the taxonomy creates a shared language for identifying and evaluating skills imperative to your operations.
Generally, a taxonomy classifies skills — including technical and soft skills, as well as industry-specific competencies — in various ways. Your leadership team and staff can refer to it when hiring, training, conducting performance reviews, and engaging in strategic or workforce planning.
If you’d like to get an idea of what’s involved, there are several publicly available taxonomies. For example, the U.S. Department of Labor maintains the Occupational Information Network (commonly referred to as O*NET), which provides details on the skills relevant to hundreds of occupations.
Multiple advantages
The primary advantage of a unified skills taxonomy is clarity. You may think you know what skills are necessary for each of your organization’s positions. However, when you attempt to articulate that knowledge, the sheer volume of information and terminology involved can become overwhelming. The taxonomy serves as a critical reference.
Another advantage is identifying which skills you have in-house and which you don’t — effectively revealing skills gaps. This can help guide recruitment and training efforts. A taxonomy also helps supervisors conduct more consistent and objective performance evaluations.
Workforce agility is supported, too. With all your organization’s requisite skills mapped out, you can more easily identify qualified employees to move into new or different roles as necessary. Such flexibility reduces disruption, downtime and lost productivity.
A taxonomy benefits succession planning as well. When you have a clear, objective perception of the skill sets required of those in leadership roles, you can more efficiently seek out internal or external candidates when needed. This is particularly important when a leader suddenly departs or becomes incapacitated.
Challenges and risks
The initial effort to create a unified skills taxonomy consumes time and resources. It also calls for buy-in across the organization. Some employers engage outside consultants to perform the task. Doing so will save internal resources but require a substantial financial investment. Once created, the taxonomy will need to be regularly reviewed and updated to stay relevant.
One risk is that the taxonomy may become so complex and detailed that it’s difficult to use. You can resolve this through revision and simplification. However, perhaps the greatest risk is that, regardless of what you do, the taxonomy still goes underused or ignored.
Financial case
You may need to build a financial case for creating a unified skills taxonomy. For starters, if created and deployed effectively, a taxonomy can reduce hiring costs by allowing your organization to target optimal candidates more accurately. It can also reduce unnecessary training by rigidly defining which skills apply to which positions.
More broadly, organizations with a unified skills taxonomy are better positioned to respond to economic, technological and market changes. You may be able to spot developing skills shortages before they become crises. Then, you can upskill employees and hire proactively. Such planning helps control labor costs and promotes more strategic budgeting.
Strong and specific
A unified skills taxonomy can be a valuable tool for employers. However, as mentioned, developing and maintaining one requires a strong and specific skill set in and of itself. Contact us for help analyzing the cost vs. benefit of implementing a taxonomy and aligning it with your strategic goals.
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