Now more than ever, HR and talent leaders need real-time information on the growing gap between skills available in their workforce and the competencies needed to perform evolving job roles or to drive shifting business strategies.
As more workers leave their jobs or delay re-entering the job market, companies increasingly are faced with having to recruit inexperienced job candidates, reskill existing workers for new duties or resort to "skip-level" promotions—promoting employees multiple levels up the leadership ladder—to help close skills gaps in the workforce.
In other cases, a change in business strategy—such as an oil and gas company shifting to green energy—requires employees to quickly acquire new skills or knowledge.
Determining what new skills the workforce needs first requires knowing what skills and competencies it already has and then working to close those gaps. It's in the automated identification, categorization and evaluation of those skills—and their connection to a company's top performers—where new skills management software can help.
Rather than using the time-honored practice of asking employees to manually enter their skills into a database, the software can automatically extract or infer skills from data like job descriptions, resumes, learning courses or projects completed, and performance reviews and then compile that information into an updated skills inventory. Some software platforms also include tools for skills verification and to help evaluate whether certain skills are rising or declining in value.
Closing Skills Gaps: A Top 2022 HR Priority
A recent study from Gartner found the top priority for HR leaders in 2022 will be building critical skills and competencies in their organizations. The study found that 47 percent of HR respondents reported not knowing what skills gaps their current employees have, while 40 percent said they can't create skill development solutions fast enough to meet their evolving needs.
Gartner's research also found that nearly 1 in 3 skills needed for a job in 2018 will not be needed in 2022 and that the average number of skills per job is increasing steadily.
In another sign of the growing concern around skills gaps, the 2021-2022 HR Systems Survey from Sapient Insights Group found that skills management applications were among the top new talent technologies HR leaders planned to adopt in the coming two years.
A host of industry vendors have built new software tools designed to make it easier for HR leaders to create a more accurate, real-time inventory of workforce skills—what some call a skills ontology that deconstructs jobs into individual tasks that require specific competencies—by automatically identifying, categorizing and assessing employee skills in a company.
Josh Bersin, a HR industry analyst and dean of the Josh Bersin Academy in Oakland, Calif., said vendors across HR technology categories now offer some version of software that helps bring new efficiencies and machine learning to skills ontology creation.
Why the growth of these skills management application providers? "There is more urgency to building and using skill ontologies today," Bersin said. "The pandemic created a huge amount of job mobility, and there's more people than ever who are either leaving jobs or changing careers. As a result, more companies are hiring people into roles who have never done the job before or who don't have experience in that exact role. And job roles themselves no longer are clear because they keep changing."
Bersin said skills management software providers include learning platform vendors who have categorized and "inferred" years of skills data from learners' activity; recruiting technology providers who have vast skills data from algorithms that match candidate skills to job requirements; providers of HRIS platforms and technology suites who have multipurpose "skills engines" that run across the breadth of their talent applications; and new specialized skills management software companies that focus only on helping companies create skills infrastructures.
Some of these vendors have their fingers on the pulse of skills currently in highest demand because of their access to the real-world job requisitions recruiters create each day, Bersin said.
Using this software to create a skills ontology isn't without its challenges, he noted, given the fragmentation of HR technology in many organizations. "If you're a bigger company you're now dealing with multiple systems that capture skills data, and there usually is no single system of record," Bersin said. "Some vendors are working to provide that but to date there is no mature, end-to-end solution."
Skills Management Software in Action
One of the vendors offering skills management software is Pleasanton, Calif.-based Workday. The provider's Skills Cloud product is an infrastructure for collecting, inferring and verifying skills that are part of Workday's human capital management system, said David Somers, Workday's group general manager in the office of the chief human resources officer.
The Skills Cloud uses an ontology that gives order and structure to unstructured skills data, resulting in a "universal skills language that learns and grows over time," Somers said. The application's "inference" capability analyzes data from across Workday's platforms to infer and identify potential skills that workers may have. That inference function is based on data from current job descriptions, projects completed, learning and development records, performance reviews, resumes and more. Data in the application is provided by customers and also includes large industry-standard sets of training information, Somers said.
The software also has a "knowledge graph" that Somers said understands the relationship between skills, previous learning content and job profiles. "That allows the software to discover connections between items that would otherwise be imperceptible," he said.
Bersin said elements of the latter capability can be valuable in today's challenging hiring market where worker shortages are forcing companies to look internally for answers in filling job openings.
"If skills software can give you hints or inferences about people who are likely to be good at a certain job—hints that weren't obvious before—they can be extremely helpful," Bersin said. As an example, he said, one organization discovered employees working in financial auditing jobs had skills that might be easily transferred to cybersecurity roles in information technology—a role with a worker shortage—and those employees could acquire other needed cybersecurity skills for that role through training.
"Most companies won't make those kinds of connections as quickly without these skill-matching software systems," Bersin said.
Amy Mosher, chief people officer for isolved, a HCM platform provider in Charlotte, N.C., believes creating an up-to-date skills ontology is more important than ever today given the urgent need to reskill workers. "Not only is that development important now, but it will continue to be in the future because finding skilled talent externally is so difficult," Mosher said.
Meeting the Data Challenge
Experts say the key to getting the most value from skills ontology software is accumulating the right quantity and quality of internal and external data. "This isn't just a software problem, it's a data problem," Bersin said. "If you're an oil and gas company moving into solar energy, for example, and looking to identify skills you already have and those you need to fill gaps as you make that transition, your system needs to be smart enough to know what new workforce skills will be needed to support the shift in strategy."
Bersin said a vendor's skill ontology software can't identify all the skills employees need, and HR leaders should be able to capture additional data from the external market—such as aggregated data generated by job requisitions posted to Indeed or LinkedIn—to do so. That requires loading data into skills software systems that will likely need to interact with other third-party platforms, he said.
Dave Zielinski is a freelance business writer and editor in Minneapolis.