Make Smarter Business Decisions: Know What Employees Can Do - HR's Tools for Recovery - identifying and using employee skills

Workforce, Nov, 2001 by Samuel Greengard

Developing systems that track employee skills, whether it's using a word-processing program, operating a forklift, or speaking French, is an absolute necessity in today's increasingly specialized business world.

Teri Ralbovsky knows that achieving success in today's dramatically fluctuating marketplace involves more than a great product and effective marketing. It requires more than a flawless balance sheet and the hottest information technology. At the end of the day, she says, this is what it's all about: "The skills and competencies that you develop as an organization define how you conduct business, how effectively you interact with customers and business partners, and, ultimately, whether you're able to succeed."

As human resources director for Virtual Inc., an integrated management-marketing firm based in Wakefield, Massachusetts, Ralbovsky is on a mission to push the company to the highest level of performance. As a result, she conducts regular and ongoing analysis of clients' needs, surveys the skills and competencies of Virtual's 38 employees, and then identifies ways to fill in the gaps through hiring and training. If, for example, the firm needs employees with strong teamwork or communication skills, she will pore over resumes for qualified candidates, or provide specific training to address the requirement. "Today, human capital defines an organization," she says.

More and more companies are subscribing to Ralbovsky's way of thinking. They're developing systems to track skills, typically defined as job-based activities such as using a word-processing program or operating a forklift, and competencies, which typically cover broader professional characteristics such as the ability to work on teams or think creatively. Increasingly, organizations are using these models to make key business decisions centering on recruiting, training, and succession planning.

"By creating a unique inventory of human capabilities, a company is better prepared to compete in today's business environment," says Tom Kraack, director of the organizational development practice at Unifi Network, a division of PricewaterhouseCoopers consulting. In some cases, companies are turning to sophisticated software systems to manage the process. Others are finding that spreadsheets and old-fashioned paper are sufficient.

Skills inventories took on increased importance after September 11, says Ilene Gochman, practice director, organization management, at the consulting firm of Watson Wyatt Worldwide in Chicago. "You can see how quickly firms had to get back to business," she says. "All of a sudden, you need someone who can speak French, or someone who had been a bond trader earlier in his career." Without a system, Gochman says "you're relying on your memory or the informal networks people have." That's fine in an emergency, but to leave people in those positions because of who they knew, or the luck of the draw, would raise issues of fairness, she says.

No matter what the motivation, skills inventories are more about process than technology, says Frank Belmonte, a human resources consultant for Hewitt Associates in Lincoinshire, Illinois. "An organization must identify its key objectives and business goals and shape its workforce accordingly." As skills and knowledge become increasingly specialized in today's business world, organizations that don't keep up are destined to fall behind, he notes.

Building a skills inventory

To a certain extent, organizations have always tried to get a handle on the talent and skills they have and what they need. But in today's highly competitive business environment, it's not just a good idea; it's an absolute necessity. A skills inventory, essentially a checklist or database of organizational capabilities, can help an enterprise determine whether it has the ability to produce a next-generation microchip or to market a new food product effectively. When human resources or line managers identify a skill gap--the difference between where the company is and where it needs to be--they can funnel workers into appropriate courses or hire applicants best suited to the job. HR can also tweak pay and compensation to attract the ideal kinds of workers.

Although every organization approaches the issue differently, a management strategy for skills and competencies usually revolves around a few essential steps. Typically, human resources begins by analyzing the specific skills and competencies needed to perform job duties effectively. This can include functions needed within a company, such as expertise in a particular software application or piece of equipment, or specific behavioral qualities required to interact with customers and vendors.

Once an organization has documented its skills, it can build or buy a system designed to track them. Many small companies continue to use paper or a spreadsheet, while medium and large companies often turn to specialized software programs, including HRMS modules from SAP PeopleSoft, and Oracle, and human capital development application providers like Saba Software and Skill View Technologies. "The goal is to develop a system that can provide insights into organizational and employee needs says Stephen Schoon-over, president of Schoon-over Associates, a Falmouth, Massachusetts, consulting firm.