Skills taxonomy: what it is and why it matters

A skills taxonomy forms a key step in the transition to a skills-based organisation, forming a part of a wider skills framework.

As market demands, technologies, and business strategies change, companies must continuously reskill their workforce. More than this, they need a structure that enables them to identify skills gaps and place talent where it is needed most. 

WEF research found that, between now and 2027, businesses predict that 44% of workers’ core skills will be disrupted, simply because technology is moving faster than companies can design and scale up their training programmes.

This is why many companies are transitioning to become skills-first organisations, placing greater focus on understanding and developing the skills of each employee. 

The role of a skills taxonomy

A skills taxonomy helps navigate this complexity by identifying transferable skills and gaps that need to be addressed, enabling companies to become more agile in response to changing business demands.

A key step towards a skills-first approach is knowing the skills that exist within an organisation. A skills taxonomy allows organisations to begin to understand the distribution of skills within the organisation. 

What is a skills taxonomy? 

A skills taxonomy categorises and organises the skills required across an organisation. It provides a common language for defining and assessing workforce capabilities, aligning them with business goals.

This taxonomy should be customised for the individual organisation, so that the skills framework is directly aligned with specific business needs, relevant roles, and strategic priorities​.

A skills taxonomy consists of standardised tags showing, with skills customised according to an organisation's language and tone of voice. 

Building a skills taxonomy 

The challenge for many organisations looking to bring in skills-first approach is that surfacing skills can be a time-consuming and complex process.  

Technology can now shorten and improve this process through skills inference. AI-powered skills inference solution surfaces skills from job data such as job descriptions, job postings, and assessment data, validating and suggesting enhancements to skills data based on industry insights. This skills data is then used to create a customised skills taxonomy. 

The skills framework

This skills taxonomy, with standardised skills tags, provides the ability to view and analyse the distribution of skills across an organisation, but it doesn’t provide the in-depth data required for many use cases, such as mapping out career paths or recruitment. 

A wider skills framework is required for a more comprehensive skills approach. The skills framework comprises more granular data, such as skills types and categories, which define skills in more detail, and skills proficiencies so organisations can see the skills possessed by employees and the levels of each skill. 

This skills framework provides the ability to view the range of skills across an organisation, and more importantly, detailed data which shows the category of skills and the level of competence for each employee. 

It's this greater detail that then feeds into key business use cases, from targeted learning and development programmes based on identified skills gaps, greater workforce flexibility through knowledge of skills, as well as improved recruitment processes where candidates are targeted and assessed based on the skills required for the role, not just experience or qualifications.

In summary 

A skills taxonomy provides the foundation for a resilient, future-ready workforce by offering clear insights into the distribution of skills. By building upon this taxonomy to create a comprehensive skills framework, organisations are able to put skills at the centre of their workforce strategy.

RoleMapper has launched the RoleMapper Skills Innovation Partnership to help fast-track the shift to skills by co-creating and building innovative AI and technology solutions to support people strategy and process challenges.