Building an effective skills taxonomy: five rules to success
It’s hard to avoid talk of skills taxonomies in learning and development today. But what are they, why should you have one, and how should you design it?
What is a skills taxonomy?
A skills taxonomy is a list of skills, classified into different groups and sub-groups. Like a family tree, it can have several levels, depending on how detailed it is.
For instance, algebra might fall under mathematical skills, while analytical thinking could fit within problem-solving. Both might be under a high-level classification of cognitive skills.
Human skills like empathy and persuasion might fall under groups called active listening and leadership, under a high-level group of skills relating to working with others.
Why have a skills taxonomy?
You can use a skills taxonomy to classify and structure your analysis of the abilities of your employees. This helps identify areas where they may lack the skills needed to meet the company’s objectives, which feeds into training and recruitment.
A skills taxonomy also helps to provide a way to structure performance management, by providing a clear breakdown of underlying skills that employees need to demonstrate.
And because it breaks down complex job functions into the granular skills needed to carry them out, a taxonomy also shows which skills are shared across different parts of the organisation. This can bring new insights into how to manage and deploy your staff.
How to design a skills taxonomy
You can build your own from scratch or take inspiration from elsewhere, like the World Economic Forum’s Global Skills Taxonomy.
Whichever route you choose, here are five rules to success:
1. Define your goals
Set out your business goals and objectives, short and long-term.
You need to do this to ensure that all your thinking about skills – the ones your workforce already has and the ones you think it still needs – is aligned to your business goals.
Knowing your goals makes it more likely that you will define your skills needs accurately.
If you try to build a taxonomy without being clear about your business objectives, the process will be less efficient and the results less relevant.
2. Engage and explain
Talk to stakeholders at all levels of your organisation to explain the importance of a skills taxonomy.
There are two key reasons to do this. First, it will help you gather the information you need to construct a list of skills needed across the company. Only by talking to teams about the work they do will you understand enough to do this well.
Second, it will help get buy-in throughout your company. That matters, since you will be using your taxonomy to inform your performance management and training processes.
3. Think beyond the technical
Make sure you consider human skills, not just technical or knowledge-based skills.
It’s easy to focus on technical knowledge when defining a taxonomy, but human skills are just as valuable – and may be more so today as technology makes it easier to access specialist knowledge on demand.
Try splitting your taxonomy into two broad categories – one with technical skills that are specific to your business or industry, and another that relates to how your employees will interact with each other or with clients.
4. Keep it simple
Don’t make your taxonomy more complicated than it needs to be.
It’s best to keep your taxonomy as focused as possible, while still defining what your business needs to be successful.
For many businesses, between 10 and 20 skills may be a sweet spot. It’s important that it can be easily understood and deployed. If it isn’t, then you will miss out on much of the benefit.
If using an external reference taxonomy as your starting point, be strict about only including what is relevant to your business, rather than importing detail “just in case”. You can (and should) make changes to it later.
5. Review regularly
Your taxonomy is not a one-off event; everyone should understand that it is a living document.
Your business goals will change over time, as will the market environment and technology. When they do, your skills needs will change, and your taxonomy must change with them to stay relevant.
Final thought
Building and deploying a skills taxonomy is not a simple task. Getting it right from the outset will help you achieve your business goals and provide a dynamic foundation to enable you to adapt to change.
Discover how experts in the financial industry are creating and managing skills taxonomies and skills development:
Why skills taxonomies and architectures are critical to navigating the financial industry’s future
The skills gap challenge: knowing what you have – and what you need
From theory to application: Thinking beyond skills in the financial industry workplace
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