A skills taxonomy is a standard language for skills, shared by everyone in an organization.  

It’s the first step toward building a skills inventory. This database catalogs the skills you have and need, such as those required by specific roles, or possessed by employees. 

Why we need skill data 

A skills taxonomy will help you match people to roles and projects efficiently, using data instead of opinion or intuition. Not only does this result in a more efficient, innovative and profitable business, but it promotes fairer, more objective hiring standards. Skill data will also help you build upskilling and reskilling initiatives for the greatest possible impact. 

Skill taxonomies, usually produced with artificial intelligence, are available from companies like SkyHive, IBM and Revelio Labs. These tools combine information scraped from LinkedIn, job boards, company websites and other sources to capture the skills our current market demands. While these tools are powerful and sophisticated, they’re unnecessary for many companies, especially smaller ones.  

Building your skill framework 

Skill data is for everyone, and building a skill taxonomy is within reach whether your organization has five, 25 or 200 employees. 

Open skill libraries, such as those created by O*net or many government sources, can be a great place to start. However, you’ll likely find that they aren’t industry-specific or specialized enough for your organization.  

To find more relevant skills, look within your organization. You’ve already collected skill data in some form, even if you didn’t call it that. Employee certifications, skills assessments, past and current job postings, and progress or project reports are good places to begin your search. All will contain data on the skills your organization has sought out — and relied on — in the past.  

Keeping skill data relevant 

Keep the skill labels in your taxonomy specific and narrow. Skills refer to the capability to complete one specific task. Competencies, by contrast, are a broad capability for a certain type of work, requiring multiple skills. For example, “Hootsuite” would be a skill, while “social media management” is a competency.   

Your skill taxonomy will also need to be updated regularly as the nature of your work evolves. Work and the skills we need to complete it change incredibly quickly, especially in today’s digital era. Don’t look at your taxonomy as a one-and-done task — instead, build time to update it into regular workflows.  

A good starting point can be asking people to provide quick notes on their daily tasks. In fact, your people may be doing this already! This can both help you create your taxonomy and update it as the skills you require change. You should also make sure that all skills assessments, upskilling and reskilling initiatives are reflected in your skills taxonomy.  

Working towards a taxonomy 

Trying to understand the skills your organization needs and uses on a daily basis can feel overwhelming. But it doesn’t need to become a burden, especially if your organization is on the smaller side.  

Finally, keep your expectations realistic, as there are limits to what a skill taxonomy can do. Data will never be able to capture exactly what makes a team member so special, or every nuance of what it takes to succeed. Skill data and the taxonomies used to organize them are just a way to understand your people — and what they can do — more deeply.  

LC Extension offers many resources to help organizations approach HR and management in a more data-driven way. To learn more, book a consultation now.