How to Create a Skills Inventory By Assessing Your Workforce

Human capital is your #1 asset. Here are 3 types of assessments to quickly, easily and effectively create a workforce skills inventory.

What’s the one thing that all businesses have in common?

They all possess the same #1 asset – the employees! That’s right…human capital.

Effectively managing human capital is essential at every level of leadership and often determines whether an organization thrives or struggles. Success comes from empowering employees who are eager to contribute to the company’s growth while advancing their own careers.

A great place to get started is with a skills inventory. Once you have your list of critical skills needed for each of the essential roles in the company, or EVERY role for that matter, you can get started by assessing your workforce to build your skills inventory.

There are many ways to assess workforce skills—observation, simulations, questioning, and testing, to name a few. Each can provide valuable insights for building a skills inventory. However, the most practical approaches are often the simplest and least resource-intensive. These include:

1. Self-Assessment
2. Manager’s Assessment
3. Combined Self- and Manager’s Assessment

1. Self-Assessment

Self-Assessments are best for low-risk situations like compiling a skills inventory. They’re most effective when employees understand the purpose and there’s a culture of trust. Always provide a brief introduction before starting.

• How it works

  • Employees receive a list of relevant and role-critical skills.

  • They rate their own proficiency using a descriptive scale (e.g., Extremely Proficient → Ineffective) or a numerical scale (e.g., 1–10).

• Pros

  • Fast to set up and implement.

  • Low-cost and resource-efficient.

  • Empowers employees to reflect on their own capabilities.

• Cons

• Best Practices

2. Manager’s Assessment

Manager-provided assessments are a key tool for evaluating employee skills from a supervisory perspective without an employee’s input. 

• How it works

  • Managers assess their direct reports on role-related skills, with or without employee input.

  • Ratings can be subjective or objective, depending on the scale used.

  • An introductory overview of the skills inventory and manager’s assessment should be provided beforehand.

• Pros

  • Highly useful for compiling a skills inventory.

  • Supports competency model validation, employee selection, and succession planning.

• Cons

  • Managers may not always know employees’ skill levels, leading to over- or under-rating.

  • Ratings can be affected by personal bias.

  • Important to instruct managers to recognize biases and avoid letting them influence ratings.

• Best Practices
  • Provide clear guidelines and training on rating criteria before assessments.
  • Encourage managers to use specific examples to support ratings.
  • Combine manager assessments with self-assessments or peer feedback for a more balanced view.

3. Combined Self- and Manager’s Assessment

A combined approach using both self-assessments and manager assessments provides the most accurate and reliable view of employee competencies. This method encourages reflection, dialogue, and alignment between employees and their managers.

• How It Works

  • Employees and managers each complete the same assessment separately.

  • Results are compared, and any discrepancies are discussed.

• Alternative approach:
  • Employee completes a self-assessment first.
  • Manager reviews a team-wide competency report.
  • Follow-up discussions held as needed to clarify or align ratings.
• Pros

  • Produces a more complete and balanced view of competencies.

  • Encourages dialogue between employees and managers.

  • Helps identify gaps and misperceptions in skill assessments.

• Cons

  • Requires more time and coordination than a single assessment.

  • Discussions may uncover sensitive discrepancies that need careful handling.

  • May be influenced by biases if not carefully managed.

• Best Practices

  • Provide clear guidance on how to complete assessments objectively.

  • Encourage the use of specific examples to support ratings.

  • Facilitate structured discussions to resolve discrepancies constructively.

  • Consider combining with peer feedback for an even broader perspective.

Skills Inventory Key Take-aways:

1. 1. Self-Assessment → Fast, low-cost, but risk of inflated ratings.
   2. Manager’s Assessment → Great for validation/planning, but subject to bias.
   3. Combined → Most accurate; encourages dialogue, but takes more time.

• Best Practices → Provide clear guidance, use examples, combine methods, and structure discussions.
• For larger teams → Use technology like WebMentor Skills™ to automate and scale.

There you have it – a simple method to assess skills so you can create a skills inventory. I understand, however, that you may have a more complex set of workforce skills or a workforce too large to try to tackle this process manually. If so, then what you need is technology!

Avilar has developed an easy-to-use yet robust skills management software application, WebMentor Skills™, that takes care of the time-consuming tasks for you and helps organizations identify, analyze, and manage skills gaps within their workforce. Contact us – we’re always happy to help.

*This blog post was originally published Oct. 17, 2018 and has been updated to reflect best practices.