Skills Taxonomy: A Guide for HR And Talent Managers

Skills taxonomy is a widespread human resource development concept that gives more relevance to a skills-based approach than a role-based one.

But for that, the companies should first identify their needs for skills in an organization. Once the organization can unlock such agility, there can be an allocation of tasks based on the availability of skills.

With the identification of skills taxonomy, it will become easy for the company’s HR department to hire new employees based on the requirements and the dynamic nature of the company’s development.

What Is Skills Taxonomy?

Skills taxonomy can be defined as the structured list of skills the organization identifies and matches with the workforce with similar skills. When the company feels that several skills from the structured list are missing, they have to find a dynamic force that can help satisfy the company’s needs.

This kind of change came up mainly after Covid 19 when non-tech people started working from home and learned a lot of technology-related solutions. To continue the work, they developed several skills which began operating in their favor.

The organizations also started realizing that learning and dynamism were responsible for driving the company forward, and hence the company started identifying skills more than job roles.

Every company should create a skills taxonomy structure to classify specific needs. By following a skill-based approach, there will be dynamism and better operational efficiency for the company. Ultimately, the work culture will satisfy the organization and the employees.

Implementing skills taxonomy can provide a further roadmap like:

  • Strategic planning to allocate work to the workforce

  • Strategic upskilling and reskilling

  • Moving the employee within the organization by implementing the skill-based approach

  • Taking performance reviews and providing incentives

  • Assessing whether the individual is skilled enough for a particular job

Why Do You Need Skills Taxonomy For Your Organization?

Skills taxonomy is essential at every level of the hierarchy. At the higher level, it will be like a global language that provides a perfect framework for hiring and retaining the workforce.

Skills taxonomy works at an individual level and the organizational level. Here are the reasons why skills taxonomy has a vital role to play.

To identify and fill up the skill gaps.

With skills taxonomy as the central concept, the organizations will be able to identify the skill gaps, and based on what task has to be performed and what skills will be needed, there will be a shift to the process, which will help in filling up that skill gap.

To let Employees embrace dynamism.

Employees or those who wish to join the organization will understand the skills needed to stay on or get the job.

There will be a need for dynamism and agility to understand new profiles’ challenges. Employees will know that learning and skill development are answers to most of their questions.

To initiate reskilling and upskilling processes for the employees.

Investing in and applying skills taxonomy will initiate educational processes for reskilling and upskilling the employees.

The organization can take progressive steps like training and educational programs, creating prospects for future dynamism. Since the company has agility about what needs to be done, there is also better ROI.

To remove systemic bias within the organization.

Implementing skills taxonomy can offer freedom from systemic bias because there will be better organizational transparency for reviewing workforce performance.

Since there will be a dependency on a skills-based approach, mobility and promotions will be based on skills rather than the job role.

To map and assess the skills as per the requirements.

The process starts at the granular level and then reaches the highest point. First, there will be the assessment of the roles, profiles and skill needs at the organizational level.

The next step is to map and assess the available skills based on the results.

In the meanwhile, there will also be the identification of gaps. Once the assessment is done, the organization will direct the resources to the relevant skill development strategies.

To create a sync with skill clusters.

When there is skills identification based on skills taxonomy, this will be further complemented by skills clusters. Skills clusters may help in identifying and describing the job roles in a better way.

This partnership helps create a robust work culture within the organization to adapt to any situation and face every challenge that comes on its way.

Implementing and involving skills taxonomy within an organization can reap great benefits for the company and the employees. Know how it benefits the organization to swiftly alter as per the changes within the sector or industry.

Benefits Of Skills Taxonomy

A skill-based approach is exercised in skills taxonomy; it helps unlock organizational agility toward the industry’s dynamism. The company can reap varied benefits, which include:

Providing an idea about staff capability

Staff may be capable enough, but since job roles and hierarchy have gotten more important, the organization may need to see the true potential.

But when skills taxonomy is practiced, the organization starts identifying and rewarding the staff for its skills more than anything else.

Allocating the project based on skill set

A company may have many open projects in hand. But often, the allocation may happen without the knowledge of the employee’s skills and talents.

With skills taxonomy in presence, project allocation will become very simple and reap great fruits regarding completion timeline and quality of work.

Identifying the team member for mentorship

Often, it becomes tough to allocate training and educational resources towards the relevant team member.

But with skills taxonomy, it becomes easy to identify the skill set and hence the team member for mentor-ship. It helps identify the skills clusters and form a team for project-based execution.

Retaining employees and enhancing their levels of satisfaction

With skills taxonomy, there is better recognition and appreciation. The employee has a clear path for his career development.

This clarity helps in staying at the company and growing. When the employee feels recognized, it rewards his satisfaction as well. Looking for opportunities to grow within the organization is an excellent way to develop along the same line.

Adopting dynamism and hence enhanced productivity for projects and new clients

Thankfully, skills taxonomy can also lead to the mentorship of leaders who always want to stay ahead in the game.

The leaders would remain dynamic and always crave better opportunities to achieve client retention and new client acquisition. The projects will prove to be more productive, and the company will grow and develop.

Since there are a range of benefits that the organization can fetch because of skills taxonomy, it is crucial to unveil the concept and elements of skills taxonomy.

Know About Elements Of Skills Taxonomy

Skills taxonomy is a broad concept. It is essential to understand the elements of the same.

Skills name

By naming it, a clear structure is given to the skill set; keeping this element as simplified as possible can help create a further roadmap.

Skills description

This concept includes the suitable description and interpretation of skills. If there is a misinterpretation because of skill overlap, it can affect project allocation.

Skills hierarchy

It will be essential to make the list of skills based on the hierarchy and the level of importance. This urgency must add ease in knowing which mentorship should be first and which others should follow.

Skill map

Creating a skill map helps you know what skills and talents are in the pool. When there are projects that meet the skill level, it is an opportunity for quick execution.

Skills clusters

Rather than just talking about the job role, there should be clusters that will have a few skill sets. The groups will help in enhancing job role compatibility.

Rather than just staying idle with the concept, the organization should take it to the next level.

How To Take Skills Taxonomy To Another Level?

To take skills taxonomy to another level, there will be a need for a productive approach and joint efforts.

The skill set can be part of the primary platform where the organizations determine what is there and what is required. Here are some innovative ideas to take this platform to another level.

Take up workforce planning with proper strategy implementation.

Implementing skills taxonomy and taking the same to another level will be accessible when departments and recruiters are ready to enforce the policies strategically. There will be a need for workforce planning depending on the available opportunities and projects.

Convert skills set data into a talent management platform

The organization can hand over the skills data to a reliable HR analytics firm which can provide insight about skills management and mentorship based on the need and user experience.

Get into the microarchitecture of the job profile.

When the organization wants to adopt and implement a skills taxonomy, then there is a need to consider the job based on what skill sets are needed and how every micro-task needs to be done.

When the job is thought of as a cluster of many micro-tasks, there will be proper execution of skills taxonomy. The organization can use this for real-time solutions.

Make workforce-related decisions with future orientation in mind.

Taking skills taxonomy to another level includes predicting the future’s dynamic nature of jobs. Depending on that, there will be better decisions about workforce management.

Every organization is trying to get ahead in a world full of competition. An organization comprises its workforce and employees; they are the actual assets.

Developing and upskilling them for the future is an important thing. With skills taxonomy, applying skills-based matching with the relevant job challenge becomes an important avenue.


Times have changed, and more than job profiles, skill sets have started gaining more importance.

The job role is now being replaced with skills clusters. It is, therefore, vital that every organization get updated with what skill sets are available to them and how the workforce should be mentored in the future.

At least, this will help in avoiding a gap between the talent source and the talent needs. The future will pose many challenges, and hence it really matters how the organization takes action to add the right solutions in the process. The description of the skill set has become more important than the job role.

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