Organizations today operate in conditions defined by Volatility, Uncertainty, Complexity, and Ambiguity (VUCA). Originally introduced by Warren Bennis and Burt Nanus in the 1980s and...
Read Full ArticleApril 28th, 2025 – SkillCycle
As companies grow and develop, there is an increasing need to build skills to navigate new business challenges. Creating a skills inventory should be the first step for organizations to gain clarity on their current positioning and needs.
“A skills inventory allows you to identify what skills you have across your organization,” says Andrew Hibschman, VP of Customer Success of SkillCycle. “From that inventory, you’ll be able to assess where gaps exist and where they may occur in the near future.”
Focusing on skills can help companies hire more strategically and develop their existing workforce to cover gaps, making swift progress on building skill capacity throughout the organization.
What kind of impact can you expect from the shift? Skills-based organizations are 98% more likely to retain their high performers and 107% more likely to place talent effectively, according to Korn Ferry.
In this article on the importance of establishing a skills inventory, we’ll explore:
A skills inventory is a compilation of employees’ skills, education, and experiences used to evaluate what skills exist within a company’s workforce at a given point in time. It can be a valuable step to assess if a company has the skills to meet organizational objectives successfully. It should be updated regularly as you hire, promote, and develop your team.
“The skills inventory is a reframe of a traditional competencies-based model for assessment,” says Hibschman. “The focus is on the skills, which in turn builds awareness of how skills and knowledge can be shared through an organization.”
Placing skills at the core of HR planning is top of mind for many organizations: 85% of HR executives are planning or considering a redesign of how work is organized so skills can be flexibly ported across work over the next three years, according to Deloitte. In addition, 77% of business and HR executives say flexibly moving skills to work is critical to navigating future disruption.
A traditional approach to hiring and promoting prioritizes job titles and descriptions. It creates hiring plans with the intent of having the right number of employees with the right work experience. The assumption is that if someone has relevant experience, they’ll be able to carry past successes into a new role.
At its core, a skills inventory answers three deceptively simple questions for every employee:
Whether you track it in a HRIS module, a spreadsheet, or a dedicated skills-tech platform, the goal is the same: create a single source of truth that everyone, from recruiters to project managers, can trust.
Recruiters compare open-role requirements against the inventory before posting jobs externally. If the skill already exists in-house, they save both hiring costs and ramp-up time.
Learning teams spot weak spots (for instance, a shortage of cloud-security expertise) and build targeted upskilling paths. Companies with strong learning cultures see 57 % better retention and 23 % more internal mobility than peers.
Transparent, skills-based career paths keep high performers engaged. Instead of polishing LinkedIn at lunch, they update their profile in your inventory and raise a hand for the next internal opportunity.
By matching emerging projects to hidden in-house talent, organizations redeploy people faster, cut onboarding time, and encourage cross-functional learning.
Finance and HR leaders model future scenarios (“If we expand into Asia-Pac, where are our Mandarin speakers?”) and budget for either training or hiring long before the gap becomes a crisis.
Don’t collect data you’ll never use. Start with the skills that drive revenue, innovation, compliance, or customer satisfaction.
Blend self-assessments, manager reviews, and (where possible) objective tests or credential checks to reduce bias.
A matrix shows visually who has which skill at what proficiency. It’s your quickest gap detector.
Overlay matrix data with strategic goals. Empty boxes? That’s your training roadmap.
Set quarterly reminders or integrate with your LMS so new certifications flow in automatically.
Map competencies like change management, stakeholder influence, and decision-making to avoid last-minute succession scrambles.
Dashboards beat spreadsheets. Give leaders filtered views relevant to hiring, project staffing, or policy planning.
What’s missing from the standard formula? A few critical factors. First, companies may not always have the budget to keep hiring and recruiting new talent. They can’t ensure that a new employee will be able to deliver as expected, and if they can’t, the company now has an extra salary to absorb.
A knee-jerk decision to hire externally to fill new roles can cause companies to overlook talented individuals already working in the organization, driving down employee loyalty and retention.
“Switching to a skills-based process to focus on the skills and abilities required for someone to be successful enables companies to identify existing staff who could be proficient in a role,” says Hibschman.
Once you’ve identified and built skills internally, you can begin leveraging those skills in new ways, moving from having a few star players to having a team full of skilled individuals who become mentors, trainers, and coaching leaders in your organization. The cornerstone of skills-based hiring includes the strategic transference of skills, so if someone leaves your company, the skills remain behind.
Proactively upskill training and mapping skills to organizational goals made our list of top HR trends for 2024 and should be on every leader’s radar.
There may be a list of skills you’ve identified that your workforce should have that are unique to your organization and its objectives. Beyond those, certain skills are rising in demand that are effective in many types of companies and industries.
“Leaders often focus on traditional leadership skills when hiring,” says Hibschman. “Yet, many of the challenges that most CEOs face are solved by communication, emotional intelligence, leadership, and empathy skillsets that are harder to capture in a traditional hiring or promotion cycle.”
The ten most in-demand skills for the next decade will include:
These may not look like what companies sought out and rewarded as top-value skills in the past, but the landscape of work has changed dramatically. Upskill training must reflect these shifts.
Current trends in business and technology show that the way employees work will bear little resemblance to work as it stands today, according to Gartner. Building a workforce that can adapt to change, collaborate as a team, and solve problems in creative ways allows companies to grow and evolve with their existing workforces.
A quick skills-inventory audit surfaced 11 employees who already held dormant CISSP credentials. Instead of paying an outside security firm, the CTO reassigned those insiders to the launch “red-team”, saving roughly US $200 000 in agency fees and trimming the schedule by two months. The Conference Board’s research on internal talent marketplaces confirms that mining hidden skills can slash recruiting costs while boosting retention.
Tagging every Green- and Black-Belt in the database let leadership form cross-site strike-teams. In one quarter, three lines cut scrap and re-work by 8 %, unlocking US $1.2 million in annual savings. Peer-reviewed case studies show similar waste-reduction wins when Lean Six Sigma is applied at scale.
The inventory revealed clerks who had quietly completed Power BI courses. Management created an internal “data bureau”, moving those clerks into analyst seats, eliminating contractor spend and lifting morale by offering a clear up-skilling path. Microsoft and partner case studies document how self-service BI empowers public-sector staff to replace external vendors and accelerate insight delivery.
It’s critical to understand where you are today so that you can begin to reinforce and develop skill-building in a targeted way.
A company-wide survey asking employees to rate themselves against different skills you’ve identified as essential for organizational success is a simple way to gather immediate and specific data.
“The first step is building a careful lens that looks at your skill inventory with an intent for growth, not performance,” says Hibschman. “This process should be separate from performance management and focus on nurturing and supporting future investments in your employees.”
Upskilling to fill skills gaps is critical for companies to navigate future challenges and growth opportunities. Allowing for scalable, targeted development that meets each team member’s skills gaps is foundational to effectively building a skills inventory.
Investing in the development of your existing workforce can be both time and cost-effective, delivering quicker results that strengthen your employees’ commitment to stay and grow with your organization.
Ready to learn how skills-based hiring can help you assess your current skills inventory and quick ways to fill gaps? Book a demo to learn more.
Examples of skills in a skills inventory include core technical abilities such as Java programming and CAD design; soft skills like empathy, negotiation, and storytelling; regulatory know-how such as OSHA or GDPR; fluency in foreign languages; and fast-growing specialties like AI prompt engineering.
A basic skills inventory typically includes employee identifiers, each person’s verified skills with proficiency levels, relevant certifications, the date each record was last updated, and optional career interests that signal where the employee hopes to grow or pivot next.
Key components to include in any skills inventory are a well-defined skill taxonomy, a regular update cadence (quarterly or real-time), strict data-quality rules, privacy and access controls, and seamless integration hooks into your HRIS, learning platform, or project-management tools.
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