A skills inventory is the compilation or summary of education, skills, and experiences of the current employees. The process of preparing or taking a skills inventory differ depending on the complexity and the size of the business. Some companies use custom-made database programs and others commercial software. Small businesses, on the other hand, use paper-based systems or basic worksheets to prepare a skills inventory.

Whatever method is used, if done properly a skills inventory will provide a comprehensive inventory of the knowledge, skills, and experience that the company’s employees possess. Companies use skills inventory to determine whether their current employees can meet the company’s goals. Understanding the existing skills as well as future skills requirements assists a business in its strategic planning.

The following are the areas where skills inventory provides valuable information:

  • Recruitment – taking skills inventory of the current employees assists a company to identify the skills gaps that can be filled by hiring new employees. Skills inventory helps managers to make hiring decisions that will ensure the company has the necessary human resources to meet the current and future requirements of the company.
  • Training – a skills inventory can also assist in identification of the skills gaps in the current employees, and determine which skills should be upgraded through employee training. This mostly happens when a new technology or processes are introduced in an organization with the aim of keeping it competitive in the market. Knowing which training is required assists managers to plan and budget for the suitable training programs.
  • Succession planning – succession planning guarantees a company that it has the right employees to take over in case a key employee leaves the company. Taking and maintaining a skills inventory allows a company to create a succession plan through identification of the employees with the best skills, matching the employees for future job openings and determining the training required to prepare the employees for future succession.

Given the power and flexibility of today’s databases, an employer can incorporate more than one category into their employees’ skills inventory. However, it is good to ensure that every area in the database has strategic and administrative importance.

Creating a skills inventory

A skills inventory should be done on a continuous basis, and employers should tell their employees to keep updating their skills inventories. Employers who do that support the success of the set strategic plans and the achievement of the organizations short and long-term goals.