Why is Skills Management Important?

Last week I defined skills management by referencing and summarizing an existing Wikipedia article. This week I’ll explain why skills management is important and I’ll begin by repeating Wiki’s definition of Skills Management: “The practice of understanding, developing, and deploying people and their skills.” Perhaps last week I put the cart before the horse though because I didn’t define “skill.” Again going to Wikipedia, here’s how it defines skill. The article’s first two sentences are: “A skill is the learned ability to carry out a task with pre-determined results often within a given amount of time, energy, or both. In other words the abilities that one possesses.”

So the bottom line is that a skill is an ability, and of course we know that companies hire people based upon their abilities and whether they match the abilities required for the job. The hiring process gets the new employee in the door for a specific job, however the corporate work environment is a very dynamic place. People and jobs come and go, job requirements change, and people’s abilities also change. The reason for skills management is to apply some order to this environment both for the benefit of the employees and for the company. So skills management has both a human component: managing the abilities of employees, and a corporate component: managing the abilities required for positions (jobs).

Thus, when skill management protocols are developed and implemented successfully, employee skillsets are expanded via training to not only more fully match their current job requirements but also to match the skill requirements of other job’s within the company. When an employee’s skillset matches their job’s skill requirements, it’s a “win-win” situation benefiting both the employee and the organization. Employees are happier because they have the skills to perform their job, and the organization becomes more efficient and productive which helps the bottom line.

Other benefits of implementing skills management processes are:

1. Enhanced execution of business strategy by developing skills that support business objectives.
2. Improved competitiveness by producing superior products and services because of a better trained workforce.
3. Reduced costs by identifying true training needs that eliminates wasteful spending on unnecessary training.
4. Maximized workforce ROI by more efficiently aligning employee skills with job skill requirements.
5. Mitigated operational risks and costs by identifying & eliminating skill gaps to reduce risk of non-compliance.
6. Increased employee retention and job satisfaction by improving employee development and utilization.

A computer system is not a requirement for this successful management of skills, however it will help, especially for organizations larger than a few employees. Some Learning Management Systems (LMSs) are skill-centric, which means they manage training through skills, other LMSs are not skill-centric and manage training only. If in the market for an LMS, evaluate the benefits of a true skill-centric LMS and strongly consider the advantages versus a non-skill-centric LMS.