Skill Assessment: Benefits, Types & How to Conduct It

ManpowerGroup research has shown that 77% of businesses worldwide face difficulties finding the skilled talent they need. A skill assessment can help you hire the right people or provide a clear insight into the skills your team lacks and how to close those gaps.

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Keep reading to discover how to evaluate your employees’ skills and competencies, make informed hiring decisions, and improve employee retention rates.

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What is a skill assessment?

A skill assessment is an evaluation process that measures an individual’s skill level, knowledge, and competencies in a specific field. Through a series of questions and tasks, HR managers can conduct skill assessment tests to help them with hiring and closing skill gaps.

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Skill assessment: benefits

Skill assessment tests may seem time-consuming for HR managers to deal with, but they provide many benefits, such as:

Identify organizational skills or gaps: Research from McKinsey and Company revealed that 87% of companies worldwide believe they have a skills gap or will have one in the future. Skills assessment tests can help you identify and close those skill gaps.
Understand employees' competencies better: Evaluating your employees' skill level gives you a better understanding of their abilities and weaknesses. That way, you can identify the right person for specific tasks, including the employees who are high performers and those who need support.
Increase employee retention: A study from CSRWire revealed that career development opportunities significantly impact employee retention rates. Conducting skill assessments helps employees improve their skill sets and develop, making them more likely to remain in your organization.
Improve training programs effectiveness: LinkedIn's 2023 Workplace Learning Report reveals that 89% of L&D professionals agree that building employee skills is crucial to thrive in the workplace. Skills assessment test helps you identify skill improvement areas and provide better training.

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Skill assessment: types

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Here are four types of skills assessment tests:

Hard skill assessment: This skill assessment type measures an employee's proficiency in a specific skill that is applicable across various industries, such as data analysis, computer skills, etc. You can assess your employees' hard skills through questionnaires, use cases, or certification tests.
Soft skill assessment: Unlike hard skills tests that measure an employee's performance, evaluating soft skills involves measuring employee behavioral competencies like communication, collaboration, time management, etc. You can measure your employees' soft skills through questionnaires, performance evaluations, case studies, or psychometric tests like the Big 5, DISC, etc.
Cognitive ability assessment: This skill assessment type measures an employee's cognitive skills like verbal reasoning, numerical reasoning, logical reasoning, problem-solving, learning agility, and attention to detail. A hiring manager can measure employees' cognitive skills through game-based tests or popular options like the predictive index learning indicator, the McQuaig Mental Agility Test (MMAT), the Criteria Cognitive Aptitude Test (CCAT), etc.
Industry-specific skill assessment: This skill assessment type focuses on testing the skills and knowledge of job candidates looking to work in a specific industry sector like IT, telecommunications, finance, etc. You can evaluate job candidates’ skills through licensing exams, test projects, professional certification programs, etc.

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How to conduct skill assessment

Conducting successful skill assessment tests begins by applying the best steps. Keep reading to learn about them.

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1. Define your goals

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The first step is to determine what you intend to achieve with your skills assessment tests. To get a clear view of your goals, here are some questions to consider:

Do you want to test current employees or job applicants?
Are you looking to hire people with specific skills?
Are you looking to bridge the gap in your employee skill sets?
Do you need a skill assessment for your performance evaluation?
What skills does your organization need to function at optimal levels?

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Answering these questions will help direct the assessment process and uncover your business skill objectives.

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2. Identify the skills you want to evaluate

As we mentioned earlier, employee work skills come in various forms. So, you need to choose the necessary skills you want to evaluate. Are they hard, soft, or cognitive skills? Choosing the right skills that are most important to your organization is crucial for success in the workplace. To identify the right skills to evaluate, consider these tips:

Review the job requirements that employees should perform and select the most essential skills needed to meet those requirements
Create a skill matrix to easily visualize your employees’ skills and abilities
Review industry standards to ensure you’re updated with emerging skills

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3. Create a skill assessment test to measure current skills

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Once you have identified the skills you want to evaluate, the next step is to create a skill assessment test to measure your employees' skill levels. Depending on your needs, you can combine many skill assessment tests to get valuable insight into your workforce talents. Here are some tips for your skill assessment test:

Tailor your skills assessment to suit organizational job roles and requirements
Choose a suitable assessment format, e.g., surveys, employee interviews, performance reviews
Include a variety of assessment questions that are clear and specific
Set a realistic time limit and establish grading criteria
Consider using skill assessment software to make the process seamless and less time-consuming

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4. Identify skill gaps

Analyzing your assessment data can help uncover skill gaps in your organization. Here are some tips to help you get started:

Compare results to the grading or industry criteria
Look for patterns or areas multiple participants struggle with
Conduct interviews and ask participants about the areas that were challenging for them
Consult with team managers across various departments to determine the skills they think employees are lacking
Review past employee data from performance reviews to identify recurring problems
Use skill mapping and gap analysis tools to help you
Prioritize skill gaps based on their impact and importance

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5. Provide resources for closing skill gaps

Your organization will thrive better once you can provide adequate resources to close skill gaps and improve employee skill levels. Keep these tips in mind when providing resources:

Establish a mentoring program where knowledgeable staff can mentor less experienced employees
Provide online courses to help employees expand their knowledge and develop their skills
Provide succession planning to help employees move further in their careers
Consider using professional training companies to provide training sessions and seminars for your employees

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Conclusion

Conducting skills assessments the right way is crucial to better understand the strengths and weaknesses of your employees or candidates.

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However, evaluating specific skills in your organization is only part of the process; it is what you do with assessment data that impacts your workforce.

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Ensure you use assessment results to identify skill gaps, improve training programs, and optimize the hiring process.

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