Why Skill Data and Analytics Are Good for the Business [GUIDE]

What is skill analytics?

Skill analytics is using data about the skills of people in your organization—processed using analytics tools—to make informed decisions about training, work project assignments, and recruitment to ensure the organization has (and is able to utilize) the skills it requires to operate.

Skill analytics is always useful, but becomes especially important when there is a labor shortage or a rapidly changing environment.

• When there is a labor shortage, retaining staff and promoting internally is critical in addition to making best use of the skills already present in the organization.
• Being able to identify and address skills gaps is critical when you are operating in a rapidly changing environment and the organization needs different skill sets. It’s equally critical for organizations to be able to redeploy people internally as demand for their skills shifts.

And at the moment, many industries are experiencing both of these scenarios in unison—and that’s not expected to change anytime soon, according to a report from Korn Ferry.

Falling birth rates also are expected to lead to a deficit of 85 million workers by 2030, leading to $8.5 trillion of unrealized revenue. And the pace of technological and social change isn’t showing any sign of slowing either.

As a result, we are going to see not only an increased need to retain people and help them update their skills, but also an increased competition for skilled workers.

However, empowering employees to develop required skills and identify progression routes can help with employee retention. That’s because people feel valued and can envision a future for themselves within the organization.

What does that look like: Skill Analytics in practice

Skill analytics is relevant to a number of stakeholders in varying scenarios:

• Employees can compare their current skills with the ones required for open roles or for the next step in their careers, so they can plan their learning and development accordingly.
• Hiring managers can look for internal candidates who have the skills required for a role.
• Managers can look for internal candidates with the needed skills to join a particular work project, rather than hiring outside consultants.
• The L&D team can address skills gaps by comparing skills required by the organization with those already present and then providing training that addresses those gaps.
• Human resources can identify internal skills gaps and then hire for those skills when recruiting externally.

How does Watershed support skill data and analytics?

You can use Watershed as a skill analytics platform that aggregates together skills data from various platforms and systems across your learning ecosystem. This might include:

• Employee self-endorsements and peer recommendations for skills via an LXP or HR system.
• Records from learning systems (e.g the LMS) that detail passed assessments and completed training that indicate acquired skills.
• Data from digital credentialing software that indicates verified acquired skills that an employee demonstrates.
• HR data relating to traditional qualifications and credentials.
• Data from observation checklist applications indicating skills applied during a simulated or real-world environment.

With all this data in one place, you can use Watershed’s user-friendly Report Builder to configure reports and dashboards that address the requirements of employees, managers, and HR professionals outlined in the previous section. And because you can set up automated data connections in Watershed, your reports will display the latest data as needed.

^{This example dashboard uses data from learning assessments to monitor levels of skill competency and a comparison of skill competency vs interest.}

Other examples of configurable Watershed reports include:

• A list of people who have particular skills or a combination of skills, which you might use to identify candidates for internal vacancies or find team members for a project.
• A list of internal vacancies requiring a particular skill set, which you might use to support employees in identifying the next step in their careers and planning their corresponding learning and development.
• A range or bar chart comparing skills based on the number of people who have each skill and/or the number of internal job vacancies requiring a skill. You might use this data to identify skills gaps in the organization where further training is required.
• A leaderboard or bar chart showing the prevalence of skills held by people in a particular job role, which you can use to identify the skills which may be useful in that job role.

Making the case: Why skill analytics is critical to the business

Implementing Watershed not only as a learning analytics platform, but also a skill analytics platform will have a number of benefits. These include:

• Improving employee retention. When you help employees develop and apply their skills and match them with internal vacancies, they are more likely to feel like they can pursue their career goals within the company—rather than looking outside the company.
• Filling vacancies faster. Being able to more easily identify and train up internal candidates means you can fill vacancies with the right people faster. This also helps reduce hiring costs and resolve any issues that having the empty position poses (you’re hiring somebody for a reason, right?)
• Reducing consultancy costs. If you can identify people internally with the skills and availability you need, you can save on costly consultancy fees for bringing outside people to fill those roles. This also means you can save your consultancy budget for when you really do need to bring in outside help.
• Provisioning for better training. By identifying the skills gaps in your organization, you can target training programs to address those gaps—rather than invest in programs for skills that are already prevalent. Better-targeted training will have a greater impact and return on investment.

How can you convince stakeholders of the value?

It’s likely that employee retention is already on your senior leaders’ radar, as Deloitte’s Q3 2020 CFO Signals survey lists this as a key concern. In order to further convince stakeholders, consider researching the cost of not having good skill data and analytics. You might consider:

• Do you lose people because they feel they can’t progress internally? What is the cost of that employee turnover?
• Are there instances where the organization hired external consultants when that expertise may have been available internally? Consider the estimated cost saving coupled with how often the organization hires external consultants.
• Can you identify vacancies the organization has struggled to fill—but if you’d had better skill data and analytics, you could have searched for suitable internal candidates or invested in training to address skills gaps?

Exploring the answers to these questions may reveal that the cost of skills analytics is much lower than the cost of not having skills analytics! And remember, this is just one business case for Watershed; you’ll realize many other benefits in learning analytics alongside skill analytics.

Understand your stakeholders and how they will benefit from skill analytics.

​​Use the following example as a guide to ensure you’ve included relevant information that will speak to each of your key stakeholders.

Meet Your Stakeholders

Next Course: Extended enterprise learning analytics

Knowing employees’ skill sets is critical to keeping your organization at the top of its game, but learning analytics often goes beyond employees.

Many organizations have an extended enterprise of partners, suppliers, resellers, and customers whose learning and development is just as important to the success of the business as that of the people they directly employ.

The next post will look at extended enterprise learning analytics and how you can use Watershed to track and support learners outside of your organization.