A vast majority of organizations globally (87%) know they either possess a skills gap or will do so within the next few years. Skills are what run companies and are a major deciding factor in business success.

If companies have no idea where they stand regarding employee skills, it would be nearly impossible to take up new projects or scale the business.

A skills matrix is the perfect tool to alleviate the problem as it helps managers understand where the employees stand in terms of their skillset. But a skill matrix is so much more than a contingency tool.

Let us explore its broad scope and how it can be used as a way to gain a competitive advantage.

Managers often have an idea of where their employees stand in terms of the skills they possess to do the assigned tasks. But oftentimes, this vague knowledge falls short. In order for managers to plan ahead and make resource planning or strategic decisions, they need to have a clear idea of how competent their employees are.

A skills matrix does exactly this for the manager. It rates employee competencies against quantifiable values, making it easy for managers to get a clear picture of the proficiency level of employees in different skills. 

The matrix is usually set up like a grid, with a list of employees on one side and a list of skills or abilities on the other. Every row and column in the matrix has a grade or indicator that shows how good an employee is at a certain skill or ability. This grade could be a number (from 1 to 5) or a list of words (beginner, middle, advanced, “expert”). 

No matter how small or big your company is, a skills matrix comes in handy at one point or the other. It is because of the wide range of purposes this simple tool serves:

• Identifying Skill Gaps
• Resource Planning
• Succession Planning
• Training and Development

A skills matrix facilitates improved talent management and strategic decision-making within an organization by painting a clear picture of the workforce's assets and shortcomings.

There are tons of benefits for a skills matrix, actually. But to put things into perspective and make things simple, let us, for the time being, focus on the big guns:

1. Identifies Skill Gaps

The major benefit managers can get with a skills matrix is having a clear understanding of the skillset of the workforce. Now managers can compare the current level of skills of employees with the level they need to reach in order to perform their functions even better.

The gap that exists between the present and the future skill level is called a skill gap.

By mapping the skills gap of different employees, managers can come up with the right training programs and courses to bridge the gap.

2. Optimizes Resource Allocation

Whenever a new project comes by, employees have to be assigned specific tasks. This process of assigning tasks must be done in such a way that the skills needed to complete the task perfectly must align with the skill level of the employees.

For example, if a task requires an employee to know Python, managers can only assign it to their programmers who are well-versed in the language.

So how do managers do this matching? With the help of a skills matrix, of course! It saves so much time and energy for the manager because now all they have to do is take a look at the skills matrix to allocate the resources correctly. 

3. Supports Succession Planning

By evaluating their employees' competencies and skills, businesses can identify potential successors for key positions.

This measure mitigates the potential for talent shortages and guarantees consistency in leadership roles. Or else, during times when everyone is busy taking care of huge changes, managers would also have to take care of finding the next successor for the vacant leadership roles. 

4. Improves Performance Management

A skills matrix is a good way to start evaluating employee performance because it gives you a full picture of their skills and abilities. This information can help managers set reasonable goals for performance, give useful feedback, and make sure that growth plans are tailored to address areas that need work.

Companies can make use of this excellent tool to help their employees grow and do a better job overall by coordinating skill development with performance management. Two birds, one stone. 

5. Enhances Employee Engagement

What’s the point in understanding where your employee skill set stands if your employee engagement levels are at an all-time low?

Make sure to utilize the potential of a skills matrix in the area of employee engagement as well. Clear communication about skills and growth possibilities makes employees more interested in their jobs.

When the skills and accomplishments of your employees are recognized, they feel respected, which makes them happier at work and more committed to the company goals. Participating in training and development events also show that you care about your employee's professional growth, which makes them even more loyal and engaged.

6. Facilitates Training and Development

Investing in employee development is crucial for enhanced performance outcomes.

Leveraging the insights from a skills matrix, managers can design targeted training programs that address specific skill gaps and foster individual growth. Customized training initiatives tailored to each employee’s unique skills and improvement areas ensure more effective learning and development.

By prioritizing employee growth, companies can cultivate a skilled and adaptable workforce ready to tackle new business challenges.

7. Enables Strategic Decision-Making

At the end of the day, it all boils down to what decisions managers make with the information they have at hand. A skills matrix gives useful information that helps with making big choices like allocating resources, coming up with hiring plans, and reorganizing the company.

Managers can find patterns and trends in how skills are distributed, which helps them make smart choices about managing people and planning the workforce. Companies can improve performance, spur innovation, and stay ahead of the severe competition in the market by making sure their human capital plans are in line with their business goals.

The concept behind a skills matrix is simple and clear. It is a tool used to analyze the proficiency an employee has in different skills they possess. But this doesn't mean that a skills matrix is just one type. Managers can have fun with the structure and format of a skills matrix to get the desired results. 

One way to show employee skills and abilities visually is with a color-coded skills matrix. These are usually set up in a matrix style, with rows for employees and sections for skills or abilities. Each cell in the matrix shows how good an employee is at a certain skill, which is generally shown by a color code. 

In the following skills matrix, employees are plotted based on the level of expertise they have in each of the following skills. Similarly, managers can replace the given skills with other ones relevant to the functions an employee performs. 

When used the right way, a skills matrix is a strong tool for managing people that helps companies get the most out of their employees, improve performance, and reach their strategic goals.

Fill That Skill Gap

If you are still on the fence when it comes to using a skills matrix, consider this a gentle nudge towards the right decision. A skills matrix is a great tool that managers across the globe use to gain an understanding of the level of competency their employees have on the skills they need to know.

You can always conduct an employee feedback survey with the help of ThriveSparrow to gauge the sentiments of your employees regarding the impending change. It makes sure that the company and its employees are all set to move to a new direction which will surely end in a brighter future for everyone.