How to Assess Employee Skills and Competencies

An organization's skills needs are continuously evolving – the skills you required to be successful in a specific role a few years ago could be entirely different now.  

Although there are several reasons for such a shift, one of the significant challenges is skills mismatch, where employees need to have the skills organizations are looking for. So, to understand what skills gap exist within your organization and the necessary learning initiatives to address them, you need to know how to measure employee skills effectively.  

According to LinkedIn's 2024 Workforce Learning Report, upskilling and reskilling employees were the primary focus of L&D programs in 2024.  
 
And rightfully so as the skills gap is widening and leading to serious losses. In this regard, L&D will provide valuable insight into your employees' abilities and can serve as a strategic advantage when preparing your company for the future. This is equally true whether you need to assess existing employees or prospective external candidates. 

Finally, you can discover what your employees are good at and understand critical growth opportunities to create an action plan for improving your L&D strategy — which supports better productivity and business agility.

Hence if you want to improve your organization's talent management abilities, you must know how to assess employee skills and competencies. 

What is employee assessment?

Simply put, employee assessments evaluate an employee's ability to perform a specific skill or set of skills. Ideally, the evaluation captures the level of proficiency for each skill, so you can identify employees that are new to a skill and which they mastered.

An employee assessment gives no weight to employee learning but measures what employees can do. These assessments are routinely used for a range of employee development initiatives.

What are the benefits of assessing employee skills and competencies?  

An established employee skills assessment protocol produces company-wide benefits that can significantly positively impact the organization. It includes: 

1. Identify critical skills gaps

Employee assessments are critical to identifying any skills gap in an organization. And to understand where employees lack knowledge, you first need to know how to assess employee skills and competencies. You may already know some of the skills gaps, while others will come to light after a skills gap analysis. The first step to addressing a skills gap is measuring employee skills. 

Read more about Top 5 Skill Gap Analysis Tools in 2024  

2. Reduce bias

Leveraging an assessment tool that is mindful of bias will encourage placements based on skills and competencies rather than biased decisions. This practice will support your organization's diversity, equity, and inclusion (DEI).

3. Internal mobility

Employees who see progress towards tangible career outcomes will likely take advantage of upskilling opportunities. This is why you need to know how to measure employee skills. As it can be a significant asset to help an employee understand their progress and acknowledge it.

4. Benchmark for consistency

An employee skills assessment tool will provide a great alternative to the more common traditional interviews held by organizations. By incorporating an assessment tool into your processes, you're capturing an employee's constant and measurable metrics for tracking the efficacy of your L&D initiatives.

5. Measure training progress and areas where it's not enough

Employee skills assessments help L&D managers identify skills gaps and determine if your existing L&D program addresses those gaps. If more than the L&D initiatives are needed for managing your employees' skills needs, it's time to go back and rethink your approach to employee training.

6. Pinpoint needs for personal development plans

Every employee has unique skills and competencies and areas for improving growth. To know this, L&D managers must understand how to assess employee skills and competencies. A skill assessment platform will allow you to gain insights into identifying employee strengths and weaknesses.

7. Employee Engagement

Employees in an organization always want to keep learning. Cultivating L&D initiatives for the growth of your employees is a win-win situation — it keeps them engaged. It allows them to develop new skill sets that will make them productive employees. And a skills assessment platform is precisely about tracking an employee's growth progress. Organizations that support and recognize an employee's progress keep them engaged.

8. Increase in performance and productivity

The greatest asset of an organization is talent. So, to protect and invest in them, identifying training needs or the progress of employee training will enable organizations to contribute to employee retention and increase productivity.

What are the best ways how to assess employee skills and competencies?

While there are many ways to assess employee skills and competencies, they are generally effective when used to gain better insights into an organization's talent base—since the most effective assessment form varies for each skill. Combining the results from various assessments will lead to a more comprehensive and reliable data set.

Here are some ways on how to assess employee skills and competencies.

1. Online skills assessment tests

Online skills assessments are the best way to assess your employees' current skills. The skills gap is widening and conducting an analysis to determine future critical skills is necessary, so it's time to use skills assessments to identify skills gaps. Conducting these assessments will help L&D managers determine where the skills gap is most significant and determine ways to close missing gaps.

A skills assessment platform will enable you to determine which employees need the most help and look for key performance indicators (KPIs) that need to be met in a particular employee group. In short, the purpose of skills assessments is to identify performance requirements, knowledge, skills, and abilities needed by an organization's workforce to achieve the requirements.

Effective assessment will help organizations direct resources to employee areas of significant demand. With an assessment platform, L&D managers can address the necessary resources to fulfil organizational mission, improve employee productivity, and provide quality products or services.

That's why iMocha's assessments are closest to a crystal ball. iMocha's assessment platform highlights where employees are competent and where more training may be needed. This skills platform not only helps organizations to benchmark progress and provide a path for employees to demonstrate skills but also helps step in and fill knowledge gaps as and when they arise.

Here are some features:

A. Most extensive skills library with 2500+ assessments

Its extensive skills library includes 500+ IT Skills, 50+ Next-Gen Skills, 37+ Coding Languages, 50+ Aptitude Skills, 20+ Business Skills, etc.

B. AI-LogicBox (AI-based pseudo-coding simulator)

With the AI-LogicBox, managers can efficiently assess coders and developers’ skills and the thought process behind it.

C. AI-EnglishPro (AI-powered language analyzer)

AI EnglishPro is an innovative tool that accurately reports an individual’s proficiency level in Business English.

D. Skill benchmarking

iMocha's skills assessment tool enables you to identify the skill competencies and areas of improvement and create a skills benchmark for current and future employees.

E. Upskilling dashboard

This self-assessment portal enables employees to remotely evaluate, track, measure, and benchmark their performance as per company standards.

F. Custom assessment consulting, etc.

iMocha offers customized assessments for all the training programs to identify the strengths and weaknesses of learners.

2. Self-Assessed Learning Goals

How can you develop an engaged and efficient team? The key to unlocking such potential is self-assessments. There's so much more to L&D. A self-assessment tool allows employers to close skill gaps and for employees to pursue professional and personal development goals.

A self-assessment L&D portal will enable you to take things further and allow employees to decide what learning goals are meaningful and valuable to them. So how does it work?

The process of self-assessments is a step ahead in self-directed learning. In a nutshell:

• An employee can assess their skills and knowledge against multiple factors. This includes the current job role and desired career path.
• Employees can identify what they need to learn to fulfil their current role responsibilities and move on to better roles.
• A self-assessment portal will also offer employees resources and activities that can help develop the skills they need.
• The employee can access available resources to begin learning what they need.
• Finally, the employee can reflect on what they have learned, how much progress they have made, and where further improvement is necessary by taking self-assessments.

Self-assessments can be a powerful tool. Once employees identify their strengths, self-assessing and moving forward personally and professionally becomes simpler. This, in turn, improves organizational efficiency, better productivity, reduced employee churn and better retention, and other vital benefits.

3. Analysis of KPIs (Key Performance Indexes)

Setting and achieving goals is every organization's objective – or at least, it should be. So, when it comes to measuring employee productivity, there is no better way than to evaluate the effectiveness of their work.

A frequent question that comes to mind is, "How do you know if your employees are using their skill sets to the fullest and achieving company goals?". If you, too, are wondering how to assess employee skills and competencies, here's what you need to know.

A lot of companies use KPIs to measure employee performance. Because KPIs provide valuable insights. This qualitative data will allow you to measure key performance indicators for employee evaluation and help discover new ways to motivate them. Furthermore, an employee evaluation process will enable you to better understand your employees' strengths and weak points.

4. 1:1 performance review

Yearly performance reviews may not be enough to analyze the performance of employees. That's why organizations must choose 1:1 performance review that happen multiple times a year. These reviews offer continuous guidance, feedback, and learning to employees.

A 1:1 performance review may occur between the manager and the employee to identify goals, work progress, plan of action, and challenges regularly at set intervals. So instead of reviewing an employee's performance once a year, continuous 1:1 review will help provide constant feedback to the employee and give a broader idea of the accomplishments over the year.

This helps improve the morale and work efficiency of the employees and gives the organization a better idea of what is happening within the team. According to a few studies, it also reduces turnover costs over some time.

5. 360-degree feedback

Providing employee feedback is always helpful because it helps understand an employee's strengths and weaknesses and how to progress in their career. A 360-degree feedback system is one way to gather and provide this information. Anonymous feedback is collected about an employee from various people. This usually includes their managers, peers, and direct reports - hence the name "360 degree".

It collects information about employees' work competencies, behavior, and working relationships. This method is mainly used for higher-up employees in the organization's hierarchy. With this information, L&D managers can adjust employee behavior and identify training needs.

Many organizations benefit from 360-degree feedback, as it improves an employee's career development planning and execution. This also promotes the organization's assurance of an employee's development, which aids recruitment and staff retention.

6. Ask for feedback from teams

An organization is built on professional relationships, and the most robust relationships are built with effective communication. Employee feedback is the information employees exchange regarding their performance, skills, or ability to work within a team. Both managers and team members can deliver feedback. This feedback process creates a more potent and effective workplace. It also makes employees feel like they're a part of something greater.

This feedback may include positive and negative feedback. This is important because it helps break bad habits, strengthen positive behavior, and enable teams to work more effectively toward their goals. Conducting regular feedback allow managers to improve management workflows and policies.

On an organizational level, employee feedback directly impacts HR and key performance indicators like employee retention, employee morale, company culture, and skills building.

7. Ask for customer feedback

Customer feedback is critical to improving employee performance. Without it, you are walking blind. Effective and timely customer feedback is crucial to successful employee performance management. This should be used in conjunction with setting performance goals. If effective customer feedback is given to employees, this helps organizations understand their progress toward goals and improve employee performance.

This can be done by asking customers who have recently engaged with your employees to evaluate their primary point of contact— an individual or a team. You can also ask customers for suggestions for improvements, pain points, and areas where they felt employees supported them the best.

Employees need to know what's working and what needs to be on time. And customer feedback helps with precisely that. If employees need to improve their performance, the sooner they find out, the better. And if an employee has reached a goal, the sooner they get positive feedback, the more rewarding it is to them.

Conclusion

In a world driven by technological changes, an employee's skills will only continue to grow and progress. As the skills gap grows, retaining and cultivating your talent becomes more vital. By implementing regular feedback, creating strategies, and investing in an employee's growth, an organization creates a culture that encourages growth and development.

One of the most effective ways to keep up is knowing how to measure employee skills. With iMocha's self-evaluation portal, employees can be asked to identify their strengths and weaknesses. This platform doesn't differentiate based on how employees have developed their skills but focus on measuring their capabilities consistently and cost-effectively.

It also enables organizations to support employees who need to hone new skills by identifying gaps on time. The skills assessments showcase the need for an employee to evolve continually and stay relevant. That is why organizations are encouraging their existing employees to reskill and upskill with the support of iMocha's skills assessments.

iMocha's Talent Development solution allows employees to understand their current position, unbury their true potential, and develop a better career trajectory. In addition, this platform would further enable employees to figure out aspects that would help them attain sustainable growth in the long run.

FAQs:

What are the methods to assess employee competencies?

Assessing employee competencies is vital to both the business and the employee, but the question is how to assess an employee's competencies that work best for your workforce.

• Gather feedback from teams

You can gather existing data from performance reviews, including peer evaluation. This feedback can provide valuable insight into an employee's strengths, skills, and competencies.

• Design measurable assessments

An assessment platform provides data-driven results and generates actionable information that you can use to understand an employee better.

• Administer employee self-assessments

Self-assessments encourage employees to look inward, evaluate their performance, and foster open discussions about their career goals and aspirations.

• Feedback from customers

Customer feedback gives unparalleled insight into employee performance where it matters most.

What is a competency skills assessment for employees?

A competency skills assessment focuses on how well an employee performs during a job with specified performance standards. This assessment method identifies existing competencies and skills gaps of your current employees. For example: Employees can self-assess their skills to determine what training is required for L&D.

Identifying an employee’s competencies tell a fuller story. This sets high-potential employees apart from others in an organization. With a competency skills assessment, L&D professionals will be able to identify potential leaders and top performers who have the both technical chops and hard-to-find competencies required to excel and advance within the organization.