Skills assessments: what they are and how to revamp them

90% of leaders are now experimenting with skills-based strategies—and it’s easy to understand why they’re eager to make the shift. Research from Deloitte reveals that skills-based organizations are 107% more likely to place talent effectively, 98% more likely to retain high performers, and 49% more likely to improve processes to maximize efficiency.

Despite leaders’ growing enthusiasm for these strategies, many companies have a long way to go before they can be considered skills-based. One challenge that almost every business faces is the question of how they can accurately assess the skills within their workforce.

While many companies have some version of a skills assessment to gauge proficiency levels, most approaches need an upgrade to provide the level of visibility necessary to power a skills-based organization.

What are skills assessments?

A skills assessment is an evaluation of an employee’s proficiency, knowledge, and abilities related to the capabilities that are required for a specific job or field. Traditionally, most skills assessments took the form of tests that were designed to assess whether individuals have the competencies necessary to perform essential aspects of a job. Some examples of skills assessments might include work sample tests, cognitive ability tests, and personality tests.

As work evolves and technology continues to advance, skills assessments are shifting to become more data-focused. Rather than asking employees to complete a test—or in addition to their exam—companies are now collecting data from employees’ previous professional experiences to evaluate their skills and how to best utilize them.

Why are skills assessments important?

Skills assessments are important because leaders need a way to see and understand all of the capabilities within their workforce. A skills assessment is an opportunity for employees to showcase their proficiency and for leaders to then better understand this capability, in turn enabling a more comprehensive talent strategy.

To reap all of the benefits associated with shifting to skills-based strategies—including gains in productivity, engagement, and retention—businesses must have an in-depth understanding of their workforce’s capabilities and how to harness them.

Without a skills assessment, it will be virtually impossible for leaders to thoroughly understand their employees’ capabilities, forcing untapped productivity to inevitably remain hidden. In contrast, companies that accurately assess their employees’ skills can develop learning pathways to help them develop the competencies they’ll need to take their careers to the next level.

4 common skills assessment mistakes companies make (and what to do instead)

Rather than settling for the same incomplete view of workforce capabilities, companies must harness new approaches to skills assessments that capture all of the knowledge and expertise their people have to offer. There are a few tell-tale signs that an organization should consider updating its process for assessing skills.

#1. Over-relying on manual reporting

While it’s important to understand how employees feel about their proficiency level in various skills, businesses cannot rely solely on this self-reported information when evaluating workforce capabilities. Since one employee may rate their skills proficiency as higher than a colleague who has the same level of expertise, manual reporting is often swayed by biases and inconsistencies.

Rather than letting these variances impact career development decisions, leading companies are harnessing agile workforce operating systems to accurately assess skill levels. Since manual reporting isn’t included in the matching process when the systems generate suggestions for projects, gigs, and full-time roles, leaders can feel confident that personal bias isn’t playing a role in aligning employees to opportunities.

#2. Not taking recency into account

Now that the half-life for technical skills is just 2.5 years, leaders need to factor in how up-to-date an employee’s knowledge is when evaluating their skills. A worker who did video editing a decade ago doesn’t have comparable expertise to someone who produces videos now and keeps up with all of the latest editing innovations. That’s agile workforce operating systems don’t just look at how long someone practiced a specific skill; they also take into account when they were honing that capability and how much time has passed since.

#3. Overlooking the opportunity for career coaching conversations

Assessing skills shouldn’t be an entirely top-down process; it’s also an opportunity for employees and managers to come together and discuss the competencies the worker should prioritize next. Rather than just having an employee evaluate their skills or asking a manager to do it, it’s advantageous to have both perspectives and view them side-by-side.

Comparing how manager and employee evaluations stack up opens the door to meaningful career coaching conversations about what a worker’s next steps should be and the skills they should prioritize.

#4. Expecting managers to become “skills gatekeepers”

Even the most diligent managers won’t know about the full capability their employees possess. Beyond their day-to-day responsibilities, employees have skills and knowledge that leaders may not know how to account for—often skills that either don’t connect directly to their job title or, through human bias, are not assumed to have. Instead of putting the onus on managers to identify and tap into every capability an employee has, skills-based organizations are harnessing agile workforce operating systems to gain full visibility into their company’s skills. These systems include skills intelligence platforms, which showcase the skills employees have so managers across the organization can harness them to complete high-priority projects on accelerated timelines.

Emerging trends in skills assessments

AI is transforming every element of talent management—and skills assessments are no exception. While skills assessments in years past relied on qualitative measures such as self-evaluations, AI and machine learning are transforming assessments to make them more accurate and data-driven. Once skills assessments are complete, AI-powered systems like skills intelligence platforms can use this information to forecast emerging skill needs so that leaders can put a stop to knowledge gaps before they snowball into bigger problems.

Integrating skills assessments into your talent strategy

Skills assessments are one of several crucial tools that HR leaders can implement to help their companies successfully transform into skills-based organizations. Once employees’ skills are assessed, executives can harness an agile workforce operating system to see how their workforce’s capabilities stack up to their competition, based on industry and market benchmarks.

They can also use the talent marketplace within their operating system to match employees to open projects, gigs, and full-time roles that align with employees’ unique skills and competency levels. Additionally, the platforms can generate suggestions for experiential learning opportunities that will help people hone new skills and deepen their expertise so they can improve their performance on skills assessments and move into more in-demand roles.

How to upgrade skills assessments with an agile workforce OS

Businesses can no longer rely on one test to capture the skills their employees have—and they can’t expect managers to keep track of it all either. Instead, companies looking to harness all of the capabilities within their workforce are turning to agile workforce operating systems to comprehensively assess skills.

With these platforms, employees can upload a resume or LinkedIn profile and the system will infer their skills and proficiency levels. The platform’s algorithm takes into account both years of experience and how long ago employees executed a specific skill to accurately assess capabilities. These platforms also enable both employees and managers to evaluate their skills, which is information that hiring managers can use when deciding which employees to staff for a project or gig. These evaluations are kept out of the algorithm to minimize bias since perceptions of proficiency levels can vary depending on who’s assessing them.

If you’re looking for more insights into what it takes to put skills at the center of your talent strategy, check out The ultimate guide to the skills-based organization.