A “Skills taxonomy” is a structured approach to organizing and naming all the different skills needed by an organization, and it helps create a system for monitoring how these skills evolve over time. Most skills taxonomies come in the form of inventories where skills are identified, categorized, grouped, and clustered.
The taxonomy can take many forms, but is usually organized by "skill family" ie. database management, software engineering, artificial intelligence, engineering leadership, etc. Today there are tens to hundreds of thousands of "skills" used in job descriptions and job postings, so the taxonomy is always changing. Any new technology, business process, science, or professional domain (ie. new laws and regulations) will create new skills to add to the taxonomy.
Today AI (Artificial Intelligence) is typically used to infer skills and crowdsource skills from many sources around the world. Your goal as an HR leader is to build the taxonomy that is most relevant and useful to your company in your industry.
A well-designed skills taxonomy helps in:
Workforce Planning: By clearly identifying the skills that are required for various roles within the organization, a skills taxonomy can support more effective recruitment, development, and management of talent.
Employee Development: A skills taxonomy can help individuals understand what skills they need to develop in order to advance in their careers within the organization. It can also inform the design of training and development programs.
Skills Gap Analysis: By comparing the skills required for various roles (as defined in the taxonomy) with the actual skills possessed by employees, organizations can identify gaps that need to be addressed.
Job Description and Role Clarity: It can assist in writing clearer job descriptions and specifying roles by detailing the skills necessary for a position.
Career Pathing: By showing what skills are required for advancement within specific career paths, a skills taxonomy can support career planning and succession planning processes.
Pay equity: Many skills are rare and hard to find, so many companies now pay for skills as they are developed and certified. This makes sure internal candidates are paid fairly against new employees who may have modern, hard to find skills.
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