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Vervoe’s Guide to Skills Taxonomy

Businesses are gradually shifting their hiring focus from who they hire to how they hire. One major game changer in this evolution is the skill-based approach to hiring, which has grown increasingly popular. But breaking it down even further, you’ll find that skill-based hiring depends on many factors, including skills taxonomy.

A Skills taxonomy comprises the building blocks for skill-based hiring, and it brings immense potential to recruitment. In this piece, we delve into skills taxonomy as a practice, defining its concept, benefits, and role in skill-based hiring. 

Vervoe’s guide to skills taxonomy 1

What is a skills taxonomy?

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A skills taxonomy is a system that classifies skills based on hierarchies. In simpler terms, skill taxonomies prioritize the skills required for a role, breaking them down and organizing them into groups and clusters.

Fundamentally, a skills taxonomy is an intricate framework that defines and organizes skills in an organization from broad to granular level. This practice delves into the essence of each skill, differentiating between technical abilities, soft skills, and hard skills. Each skill category then breaks down into subunits based on proficiency levels and their application in the workplace.

Skills taxonomy goes beyond merely listing these skills; it allows companies to articulate their workforce capacity. With it, businesses can identify skill gaps between their organization’s talent and the skills they need to achieve their goals.

Ideally, skill taxonomies are organized according to a company’s individual needs and objectives. So, as your business grows, your skill taxonomies grow alongside. These classifications must be dynamic since they present a map of your workforce capacity at a particular time.

Ultimately, a skill taxonomy aims to maximize human capital and optimize decision-making, especially in human resources management and skill-based testing.

Elements of a skills taxonomy

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The elements of your skill taxonomy will differ from those of another company. However, all skill taxonomies are crosslinked by certain fundamental subunits. The following are the primary elements of a skills taxonomy common to all organizations:

Skill naming

Although it might seem like an easy task, naming skills require cautiousness. To properly name a skill, you must ensure it isn’t too generic or too specific.

Using generic skill names in your taxonomy could prevent you from gaining insights from a greater level of specificity. For instance, using a generic name like “speaking skills” removes specificity from your naming, and you can only understand the skill based on general speaking abilities. So, instead of “speaking skills”, a more balanced term like “public speaking and presentation” offers specificity about the context and type of speaking skill you need. 

On the other hand, the skill name shouldn’t be too specific because overspecificity makes measuring the skills more challenging. For example, using the name “graphics designing in Adobe Photoshop” reduces the number of on-hand skills available. Instead, “fundamental graphics design” rather than “graphics designing in Adobe Photoshop” captures a wider set of skills while providing a clear direction for skill identification.

Overall, using names that aren’t too generic or specific ensures the skill is understandable without increasing the complexity of your evaluation.

Skill description

As the name implies, this element defines each skill in detail, ensuring an adequate understanding of its use in the workplace.

Skill descriptions provide the details about technical, soft, or hard skills. Hence, they shouldn’t be too short or long. However, they must be concise, understandable, and informative so anyone can gain adequate knowledge about the skill in the least time possible.

Skill categorization

Skill categorization involves grouping skills according to shared functions and characteristics. This makes locating and understanding a skill within a skill taxonomy easier. For example, database analysis, website development, and graphics design can be grouped as technical skills.

Skills hierarchy

The whole point of skills taxonomy is to classify and organize skills into groups, arranging them in a hierarchical format. And this is what skills hierarchy is all about. This element involves arranging skills from basic to advanced levels based on their priority for a certain role in your organization.

Skills hierarchy is based on the idea that certain skills are prerequisites for others. This means that as you organize the skills, you will end up with a hierarchical tree that gets more specific as you track the skills from their source. So, the top of the hierarchy should categorize skills on a broader scale, which becomes more specific toward the bottom. 

Skills mapping

Skill mapping connects the classified skills to relevant roles or responsibilities in your organization. This helps you visualize the skills in your company and empowers you to track them if necessary.

In practice, a skill map can be visualized on a chart or a table, with the roles on one axis and the skills on the other. Each cell where a role and skill intersect can be marked using a specific color to indicate whether it is a core or supporting skill for the role. Here’s an example of a technical skills map for a digital marketing team:

Vervoe’s guide to skills taxonomy 2

Ultimately, skills mapping helps you make better hiring decisions by spotting skill gaps and any lapses in workforce capacity. As a result, you can properly assign employees to various roles, teams, or even geographic locations based on their strengths and skills.

Why do you need a skills taxonomy?

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Skills taxonomy and skill-based hiring are two practices that go hand in hand. In fact, skills taxonomy is one of the key building blocks for the skill-based recruitment approach. So, it’s not just a tool for businesses but a vital asset that aids business growth. 

Below, we’ll explore some of the benefits of skills taxonomy for your company.

1. Improved hiring

Typically, recruitment involves outsourcing skills relevant to a particular role after performing a job analysis. While this isn’t necessarily wrong, there are better ways to assess your company’s needs and hire right. One such method is applying a skills taxonomy.

At its core, skills taxonomy identifies, defines, and classifies skills within a company. So, after identifying skill gaps in your organization — rather than searching for external skills — you can refer to your taxonomy first. This allows you to perform skill assessments to confirm whether certain people in your organization already have what you need. Consequently, you save time and recruitment expenses while ensuring you get the perfect fit for the role.

2. Effective mobility

A consequence of a good skill taxonomy system is that you would be aware of all your company’s skills and assets. As a result, you can easily spot employees due for a promotion or role change.

Applying a skills taxonomy enables you to identify opportunities for your employees to undertake new challenges and relevant training to sharpen their skills. This ensures effective mobility in your company, leading to improved employee productivity and satisfaction.

3. Better learning and development

By identifying and organizing your employees’ skills, you can determine what training methods would benefit them most. The result? Your employees have more room to learn and develop existing and new skills.

Furthermore, it allows organizations to increase their ROI for investing in employee learning and development. This means your company can optimize its expenditure by providing training opportunities that align with your goals.

4. Streamlined performance evaluation

Skills taxonomies empower HR managers to understand the skills and competencies required for a role clearly. By comparing these required skills with an employee’s demonstrated capacities, managers can adequately evaluate their performance in that role.

Incorporating a skill taxonomy into performance evaluation also ensures the process is bias-free, objective, and fair. In turn, this ensures that the results of the employee performance evaluation are accurate and reliable.

5. Optimized talent management

With a clear company skills framework, companies can place employees in positions where their skills will be properly utilized. This boosts employee productivity and reduces the amount of dormant skills within the company. It also boosts employee satisfaction and increases employee retention.

How to develop a skills taxonomy framework

People in a meeting

Developing your skills taxonomy isn’t as complicated as it might seem. However, it is a delicate process that requires thoroughness. So, it’s always best to have a strategy for developing one that suits your needs best. 

Luckily, this section is all about developing a skills taxonomy that meets your standards. Tag along as we discuss how to develop a skills taxonomy framework.

Step 1: Determine the purpose of your skills taxonomy

Skills taxonomies can vary between companies. What differentiates them is their purpose and how they satisfy each company’s needs. For this reason, the first step to developing a unique skill taxonomy is to define its purpose.

A skill taxonomy can be for a specific role or your entire organization. Skill taxonomies suited to a role are more specific than those for a company. So, to determine the taxonomy’s purpose, you should measure your current needs. This would help you filter the data you’ll obtain in step 2. 

Step 2: Gather data for your framework

In this step, you must gather as much data as possible regarding the skills necessary for a particular role.

Typically, gathering data involves performing job analyses, scanning job descriptions, and researching industry reports. However, there are various ways of obtaining data for your skills taxonomy. Some of them include the following:

  • Skill management vendors: Some skill management platforms, like Skills Base and SkillNet, compile lists of skills required for various roles and make them available to users.
  • People analytics and skill intelligence: This involves collecting HR data and transforming it into insights for your skill taxonomies.

Step 3: Organize and group the skill data obtained

Create a skills taxonomy dataset containing all the skills from the data you’ve collected, ensuring that each skill is clearly outlined. After outlining the skills, you can proceed to name and describe them.

While doing this, ensure that you group and name similar skills appropriately. For example, you can group communication, collaboration, and people management into leadership skills and data analysis and data entry into technical skills.

At the end of this process, you should have a list of skill groups for each role, and under each group, you should have a list of skills.

Step 4: Arrange the skills in a hierarchical format

When the skills are arranged into groups, it is easier to organize them into hierarchies within their groups. To do this, under each group in a role, rearrange the skills according to their relevance to each position.

For example, imagine you’re creating a skills taxonomy for a customer representative position in your company. You could group CRM software proficiency, data entry and management, and computer literacy as technical skills. Next, proceed to rearrange them according to their importance, placing computer literacy first, followed by CRM software proficiency, and then data entry and management.

Organizing the skills in a hierarchical format makes it easy to identify the most important skills required to excel in a role, thus helping to build criteria for skill evaluation.

Step 5: Review and implement the skills taxonomy

Analyze your newly developed skill taxonomy to ensure it is free of loopholes or errors. After performing an initial analysis, you can further review the taxonomy by testing it with a small group of employees and getting their feedback.

Note any suggestions and make the necessary adjustments. Then, you can conduct a final analysis before applying the skills taxonomy.

After implementing your professional skills taxonomy, you must review and update it regularly. This is important because as your company grows, you gain new employees and skills. Over time, you might even create new roles that require new skill sets. So, you must always update your taxonomy with your company’s development.

Skills taxonomy and skill-based hiring

Man visualizing his workforce

When it comes to hiring, what a candidate can do is more important than what they’ve done. According to a study by Harvard Business Review and Emsi Burning Glass, degree requirements are slowly losing their relevance to proven skills. This indicates that true skill-based hiring is on the rise. However, this practice goes beyond simply dropping degree requirements for a role.

Organizations worldwide are now adopting skill-based hiring models and including testing platforms like Vervoe in their recruitment. These platforms redefine recruitment by utilizing tools like cloud computing, AI, machine learning, and assessment creation to make the process more effective and accessible. Pairing these techniques with skills taxonomy has brought a new meaning to modern-day recruitment.

Today, skill-based hiring has transitioned from applying traditional methods like physical screening, which had various limitations, including:

  • A large number of candidates to be screened
  • Low effectiveness of screening methods and
  • Prevalence of hiring bias

Due to their efficiency, companies now use remote skill assessment methods, pairing them with skills taxonomies. In doing so, they can focus on skill over experience or unproven degrees. Such practices also streamline the hiring process so recruiters don’t have to spend time scanning numerous resumes, which aren’t very reliable.

Skills taxonomy provides a framework for identifying, organizing, and prioritizing the skills required for a certain role. Combining it with skill-based hiring enables companies to define the criteria for various roles accurately, ensuring that their recruitment efforts align with organizational goals.

Ultimately, with skills taxonomy, companies can make smarter recruitment decisions since they only hire when there’s a skill gap within their organizations. This helps them save cost and time while maximizing internal company skills.

Take your skill-based hiring to the next level with Vervoe!

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Developing a skills and competencies taxonomy is the first step to resilient business and recruitment decisions. However, skill-based hiring is the driving force behind effective recruitment and business productivity.

As a recruiter, it is important to adopt new and innovative ways to implement skill-based hiring in your company. Incorporating a reliable and efficient assessment platform, like Vervoe, into your hiring is a good place to start.

Vervoe is an AI-powered testing platform that evaluates candidates using role-based scenarios and job simulations. Our platform uses valid questions and compliant screening processes to eradicate bias from your hiring and improve its effectiveness.

That’s exactly why you should hire the Vervoe way. Schedule a demo with us today to experience reliable and efficient recruitment, taking your skill-based hiring to the next level! 

Raji Oluwaniyi

Raji Oluwaniyi

Raji Oluwaniyi is a seasoned Technical Content Writer at Vervoe with a rich background of over five years in the intersection of HR technology, consumer data protection, and SaaS. He has garnered significant recognition and has worked with industry stalwarts like TestGorilla, Brightlio, MakeUseOf, and Careerkarma. Oluwaniyi has a continuous drive to evolve and keep himself up to trend with the latest technology trends and best practices in writing. Beyond his professional pursuits, he is a genuine soccer fan and profoundly values his quality time with his close friends.

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