How to Conduct a Skills Assessment: Benefits, Types & Guide

ManpowerGroup research has shown that 77% of businesses worldwide face difficulties finding the skilled talent they need. An effective skills 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.

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

What is a skill assessment?

A skill assessment is an evaluation process used to measure skills, 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.

Skill assessment: benefits

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

1. 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.
2. 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.
3. 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.
4. 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.

Setting clear skills assessment goals is essential to ensure that the assessment aligns with your overall business strategy and addresses individual employee needs.

Skill assessment: types

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. Additionally, evaluating personal skills as part of the assessment process can reveal individual qualities that are essential for holistic performance.
• 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.

Preparing for a skill assessment

Preparing for a skill assessment is crucial to ensure that you get the most out of the process. Here are some steps you can take to prepare:

1. Define your goals: Start by determining what you want to achieve with your skill assessment. Are you looking to identify skills gaps, evaluate employee performance, or inform training and development programs? Clear goals will guide the entire assessment process.
2. Choose the right assessment method: Select a skill assessment method that aligns with your goals and the type of skills you want to evaluate. This could include online skills tests, certification programs, performance evaluations, or 360-degree feedback. The right method will provide the most accurate insights into your employees’ skills.
3. Identify the skills to be assessed: Determine which skills are essential for the job or role you are evaluating. Consider both technical and soft skills, as well as any specific skills required for the position. This ensures that the assessment is comprehensive and relevant.
4. Develop clear evaluation criteria: Establish clear evaluation criteria to ensure that the assessment is fair and objective. This could include a numerical rating scale or a set of specific standards to evaluate against. Clear criteria help in maintaining consistency and objectivity.
5. Communicate with employees: Inform employees about the skill assessment process and what to expect. Provide them with information about the assessment method, the skills being evaluated, and how the results will be used. Clear communication helps in reducing anxiety and ensuring cooperation.

How to conduct skill assessment

Conducting successful skill assessment tests begins by evaluating employee skills through fair and objective assessment processes. Keep reading to learn about them.

1. Define your goals

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?

Identifying the skills employees need for both current and future roles is crucial for aligning skills with business objectives and ensuring organizational success.

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

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

3. Create a skill assessment test to measure current skills

Once you have identified the skills you want to evaluate, the next step is to create a skill assessment test to measure skills and determine 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

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

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 

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

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. 

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

Interpreting skill assessment results

Interpreting skill assessment results requires careful analysis and consideration of the data. Here are some steps to follow:

1. Review the results: Carefully review the results of the skill assessment, looking for patterns and trends in the data. This initial review helps in understanding the overall skill landscape of your organization.
2. Identify skills gaps: Identify areas where employees may be lacking in specific skills or knowledge. This could include technical skills, soft skills, or specific skills required for the job. Recognizing these gaps is the first step toward addressing them.
3. Evaluate employee performance: Evaluate employee performance based on the skill assessment results. Consider both strengths and weaknesses and identify areas for improvement. This evaluation helps in tailoring development plans for each employee.
4. Inform training and development programs: Use the skill assessment results to inform training and development programs. Identify areas where employees need additional training or support, and develop programs to address these needs. This ensures that training efforts are targeted and effective.
5. Monitor progress: Monitor employee progress over time, using the skill assessment results as a baseline. This will help you evaluate the effectiveness of training and development programs and identify areas for further improvement. Continuous monitoring ensures sustained skill development.

Best practices for conducting skill assessments

Conducting skill assessments requires careful planning and execution. Here are some best practices to follow:

1. Use a variety of assessment methods: Use a variety of assessment methods to get a comprehensive view of employee skills and knowledge. This could include online skills tests, certification programs, performance evaluations, and 360-degree feedback. A diverse approach provides a well-rounded understanding of employee capabilities.
2. Make it relevant and focused: Make sure the skill assessment is relevant and focused on the specific skills and knowledge required for the job or role. This ensures that the assessment is meaningful and directly applicable to the workplace.
3. Ensure fairness and objectivity: Ensure that the skill assessment is fair and objective, using clear evaluation criteria and avoiding biases. Fair assessments build trust and provide accurate insights.
4. Provide feedback and coaching: Provide employees with feedback and coaching based on the skill assessment results. This will help them understand their strengths and weaknesses, and identify areas for improvement. Constructive feedback fosters growth and development.
5. Use the results to inform decision-making: Use the skill assessment results to inform decision-making, such as identifying areas for training and development, evaluating employee performance, and informing succession planning. Leveraging assessment data ensures informed and strategic decisions.

By following these best practices, you can conduct effective skill assessments that provide valuable insights into your employees’ skills and help drive organizational success.

Summary

In conclusion, conducting a skills assessment is an invaluable process for any organization aiming to optimize its workforce capabilities. By systematically evaluating both hard and soft skills, organizations can accurately identify skills gaps, enhance training programs, and make informed hiring decisions. Skills assessments not only help in understanding the current skill landscape within a company but also play a crucial role in aligning employee competencies with business goals. This alignment is essential for achieving long-term organizational success.

Moreover, skills assessments are instrumental in employee development. They provide employees with a clear understanding of their strengths and areas for improvement, fostering a culture of continuous learning and growth. As a result, employees are more likely to engage in skill development initiatives, leading to increased job satisfaction and retention rates.

Furthermore, skills assessments contribute to a fair and objective evaluation process. By using diverse assessment methods and clear evaluation criteria, organizations can reduce biases and ensure that all employees are assessed on a level playing field. This objectivity not only builds trust within the workforce but also ensures that talent development efforts are equitable and inclusive.

Ultimately, the insights gained from skills assessments empower organizations to make strategic decisions that drive performance and competitiveness in the ever-evolving business landscape.