Why Companies Need to Build a Skills Inventory
Jeff Hesse

https://www.strategy-business.com/blog/Why-Companies-Need-to-Build-a-Skills-Inventory?gko=8b016&utm_source=itw&utm_medium=20180425&utm_campaign=resp

Critical for the future –dollars are fungible, people are not

Here’s a question every leader should answer: Do you have a clear understanding of your people’s skills, and where the gaps are? 

Odds are, the answer is no. Although the cloud, digitization, and the Internet of Things allow businesses to gather and analyze all sorts of data, few organizations today have a system in place to track the skills they have. And even fewer apply that knowledge to gauge what skills they lack, both now and in the future — which presents a challenge, given that in tomorrow’s automation- and data-driven workplace, talent will be scarce and the needs of your organization will change often. 

It’s clear that digital disruption is already here. In our Workforce of the Future study, which draws on research begun in 2007 by a team from PwC and the James Martin Institute for Science and Civilisation at the University of Oxford’s Saïd Business School, we envision what the workforce will look like in 2030. While it’s impossible to predict exactly the skills businesses will need even five years from now, every scenario we imagine will require workers and organizations to be ready to adapt. PwC’s most recent CEO survey found that more than half of CEOs said they were exploring how machines and humans can work together. And 39 percent said they’re considering the effect automation will have on their workforce. 

Even now, with automation still in its early days, CEOs told us that finding the skills they need has become the biggest challenge to their business — a situation that will only get more acute as technology evolves and competition for talent tightens. Companies in a range of industries are scrambling to find people who can work with AI or train industrial robots, disciplines that may have been esoteric just a few years ago.Given the dynamics, it is vital for you to have a system in place that can track and analyze the skills your people already have — and those they may need soon. Building such a system is a significant undertaking. Breaking it down into four steps can help you get started. 

Step 1: Make an inventory of your people’s dynamic skills. Before you can even begin to think about the future, you need to know what skills your people have. Start by considering the particular skills your business needs, and then categorize them. This categorization could be done by functional skills, such as financial modeling or accounting, or by technical skills, such as programming. While doing so, you should also categorize the level of those skills, from novice to expert. It’s also important that employers look beyond workers’ job titles to consider what skills they have that they may not be using.Next, think about the best way to inventory those skills. Organizations that are small- to medium-sized don’t necessarily need a high-tech solution to create this inventory — it could be a simple system in conjunction with your HR platform, or even just a spreadsheet.Larger companies with hundreds or thousands of employees will need a more advanced technological solution, such as an app. At PwC, we created a widely available app called Digital Fitness Assessment. We’ve been using this easy, intuitive workforce platform to help our people assess their own technology skills and create personal learning paths to improve professional development. Imagine if your organization had a candid assessment of your people’s digital proficiency.Creating an inventory can’t be a one-time exercise, or a static project. You’ll need to update it as your people’s skills evolve, as your organization’s needs change, and as people come and go. 

Step 2: Organize your inventory. Once you have the basic inventory in place, begin to organize it in a way that makes it highly searchable. The key here is to make sure you can search and access the data quickly, with good results. The inventory won’t be useful if you can’t efficiently search for a specific skill or attribute, or easily access the information you need.CEOs told us that finding the skills they need has become the biggest challenge to their business.Free-form keywords aren’t reliable, because someone might refer to a certain skill using one term, while someone else might call it something different. One person’s “coding” might be another person’s “software writing,” or people may describe sales skills in fundamentally different ways. So it’s critical to figure out how you can organize the data to produce useful query results. Or you can implement a powerful search engine that doesn’t rely on how the data is organized. 

Step 3: Analyze your skills. With the data in place, you can begin analyzing it. This can be simple (comparing rows on a spreadsheet) or more complex (using people analytics or apps to find and assess certain skill sets). The goal here is to gain insight into where your employees’ skills are the strongest, where they’re thin, and where the gaps are, and then whether those gaps are on the functional side or the technical side.As with building the inventory, analysis isn’t a one-time exercise. How closely you track your people’s skills depends on the needs of your business. In manufacturing or retail, where a lot of people may be doing the same job, you might not need to track skills too closely (unless you’re looking at roles you’re seeking to transform). But if your organization demands certain unique skill sets, such as those in financial services, pharmaceuticals, or some highly technical industries, you’ll want to give skill tracking more time and attention. 

Step 4: Plan for the future. Once you’ve built an inventory and analyzed your people’s skills, you can start planning for the future. Trying to gauge the skills your company will need two to three years down the road with a few viable scenarios can be a valuable exercise. Rather than being caught off guard by a sudden gap in skills or having to hire people with certain skills at the last minute in the open market, companies armed with such knowledge can plan ahead through hiring, training, and career development strategies. 

These steps inform a broader workforce strategy. It’s important not to forget that planning your strategy shouldn’t happen in a vacuum — it should always be connected to larger, unified business goals. All functions must work together to build a skills plan for the future. 

There’s a lot we don’t know about tomorrow. But workers and organizations should be as ready as possible. By identifying the skills you need and starting to concentrate on how to build them, you’ll be better prepared for the changes coming your way.