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Skills management is the practice of understanding, developing and deploying people and their skills. Well-implemented skills management should identify the skills that job roles require, the skills of individual employees, and any gap between the two.
The skills involved can be defined by the organization concerned, or by third party institutions. They are usually defined in terms of a skills framework, also known as a competency framework or skills matrix. This consists of a list of skills, and a grading system, with a definition of what it means to be at particular level for a given skill.
To be most useful, skills management must be an ongoing process, where individuals assess and update their recorded skill sets regularly. These updates should occur at least as frequently as employees' regular line manager reviews, and certainly when their skill sets change. Skills management systems record the results of this process in a database, and allow analysis of the data, typically to assist with project staffing or hiring decisions.
To perform management functions and assume multiple roles, managers must be skilled. Robert Katz identified three managerial skills essential to successful management: technical, human, and conceptual. Technical skill involves process or technique knowledge and proficiency. Managers use the processes, techniques and tools of a specific area. Human skill involves the ability to interact effectively with people. Managers interact and cooperate with employees. Conceptual skill involves the formulation of ideas. Managers understand abstract relationships, develop ideas, and solve problems creatively. Thus, technical skill deals with things, human skill concerns people, and conceptual skill has to do with ideas.
A manager's level in the organization determines the relative importance of possessing technical, human, and conceptual skills. Top level managers need conceptual skills that let them view the organization as a whole. Conceptual skills are used in planning and dealing with ideas and abstractions. Supervisors need technical skills to manage their area of specialty. All levels of management need human skills so they can interact and communicate with other people successfully.
As the pace of change accelerates and diverse technologies converge, new global industries are being created (for example, telecommunications). Technological change alters the fundamental structure of firms and calls for new organizational approaches and management skills.
There are different types of skills in the corporate world. Soft Skills, communication skills, business writing, corporate presentation, public speaking, sales, marketing, leadership and managerial skills are few of the skills.
In 2003, the HR team at IBM saw the need to develop a set of tools and processes for managing their large workforce. IBM could see that data insights would become ever more vital to business success and they concluded that a system that tracks and provides ample information about their most important asset (their people) was needed for continued performance. As a result, they developed the Workforce Management Initiative.
IBM recorded tremendous success from this initiative. Although the system cost millions of dollars to implement, IBM quickly saw the financial benefits of the system. They stated that the system "paid for itself just in the hard savings from better contractor management, not counting the improvement in full-time employee management."
Over time, many other companies saw the value of tracking employee skills. Some initially tried to do this with ratings on paper documents, but this was largely unsuccessful since they ended up with a large amount of paper documents that cannot be queried. Others used spreadsheets which performed much better than paper reviews. Spreadsheets are still being used to track skills in our time.
However, spreadsheets are hard to manage when the amount of data becomes huge. They also lack some vital functionality needed for effective skills management. This need gave rise to the development of commercially available skills management systems such as Skills DB Pro, and the inclusion of skills management into SAP systems such as Success Factors.
Employees who benefit
Skills management provides a structured approach to developing individual and collective skills.
As a result of skills management, employees would be aware of the skills their job requires, and any skills gaps that they have. Depending on their employer, it may also result in a personal development plan (PDP) of training to bridge some or all of those skills gaps over a given period. Employees gain from improved identification and understanding of their own strengths and weaknesses, from being able to set personal goals, and to understand the value they bring to the organisation (which in turn can boost morale) 
Skills management enables managers to know the skill strengths and weaknesses of employees reporting to them. It can also enable them to search for employees with particular skill sets (e.g., to fill a role on a particular job.)
A rolled-up view of skills and skills gaps across an organization can enable its executives to see areas of skill strength and weakness. This enables them to plan for the future against the current and future abilities of staff, as well as to prioritize areas for skills development.
- Ighelogbo, Mesheal Fegor (25 January 2016). "The impact of skills management on business performance" (PDF). Skills DB Pro. Retrieved 16 February 2016.