•   Article   •   3 mins

What Is a Skills Taxonomy? And Why Is Your Competency Model Obsolete?

Michael Jordan famously practiced and perfected his basketball skills five hours per day, six days a week in the off-season. To become the best, people have to “be like Mike,” as the saying goes, and put in hours of hard work.

Just like Mike, everyday workers need to build skills with practice. Skills are needed to perform well and can help lay out a path forward to the next role. Skills empower workers to achieve results and build experience. 

Skills are today’s currency of work. Your people and their skills are your organization’s biggest assets. Assessing, growing, measuring and cultivating skills enables your talent and your company to succeed.

A skills taxonomy can help you make sense of what your people can offer as you work toward achieving business goals. 

A skills taxonomy is:

A hierarchical system of classification that can categorize and organize skills in groups or “skill clusters.” A skill taxonomy is very structured and will usually include the skills that are most important to business goals, sometimes with the skills’ definitions as well.

A skills taxonomy gives much needed structure to a company’s abilities to assess, grow, measure and cultivate key skills that translate to business results.

Skills vs. Competencies 

When you’re creating a skills taxonomy, it’s important to distinguish between skills and competencies.

A competency is “knowledge, behaviors, attitudes and even skills that lead to the ability to do something successfully or efficiently.”

A skill, on the other hand, is “learned and applied abilities that use one’s knowledge effectively in execution or performance.”

Skills are the components that go into building a competency. For example, the ability to communicate effectively is a competency. Skills that help you communicate effectively include writing concisely, speaking confidently and crafting informative, easy-to-read documents.

Going back to our basketball analogy, a player needs to know how to make three-point shots, layups, free throws, jumpers, fades and step backs. Each type of shot requires different skills. These skill sets are developed through practice, and the team must know where each player’s strengths are in order to make plays and score. One team member might have a knack for setting up a pick and roll, another might be especially good at getting fouls called to help rack up points. Knowing these skills and competencies helps develop crucial team strategies and helps players and coaches make decisions. A team’s ability to insert shooting competencies into the right structure and format contributes to scoring enough points to win.

Skill Taxonomies vs. Competency Models

Skill gaps are widening across industries, and traditional talent models like competency models, aren’t sufficient to help plug those gaps.

Those competency models are too complex and static, and they’re never used the way L&D leaders hoped, because they become quickly outdated. Contrast that with skill taxonomies that focus more on what people can actually do for a particular job. They’re dynamic and constantly updated as new skills emerge and others fade.

When your company builds and uses a skills taxonomy that reverberates with workforce strengths, it can upskill or reskill talent in key areas that need improvement. Aim. Shoot. Score!

Supporting Your People

A taxonomy-based skills strategy can help you differentiate your company when employees are evaluating the next steps of their careers. In today’s competitive job market, retaining talent can cut hiring costs and build a culture where employees see how they can grow and develop internally. A skills taxonomy — in a cohesive way — shows employees how they can demonstrate skills and competencies.

If employees have a clear direction, they can build skills and competencies to perform better in their current roles and obtain future roles. While the line from skill building to promotion isn’t always crystal clear, people certainly benefit from having a rubric for what to work on.

Having a good understanding of skills taxonomies can equip you to help develop upskilling and reskilling programs for your employees. 

Advancing L&D

By partnering with business units to evaluate key skills needed in each function, L&D can play a pivotal role in targeting relevant learning opportunities that help employees build skills and competencies. 

Depending on the companies’ tech stack, some HRIS (Human Resources information systems) feature skills taxonomies and can track and measure skills across the organization. 

Having a system and the data to map out where skills gaps occur, developing programs to close them, and building on current skills and competencies is a competitive advantage. 

A skills-based approach can future-proof your company, even if every one of your employees isn’t an A-Team all star. A skills taxonomy can provide your employees with the structure, clarity and paths needed for them to grow at your organization.

More Articles in Skills

Let’s keep in touch.

Sign me up for the monthly newsletter with exclusive insights, upcoming events, and updates on Degreed solutions.

Your privacy is important to us. You can change your email preferences or unsubscribe at any time. We will only use the information you have provided to send you Degreed communications according to your preferences. View the Degreed Privacy Statement for more details.