Skills Taxonomy - What’s the importance and risk?

The official description of a Skills Taxonomy is a structured list of skills defined at the organisation level that identifies the capabilities of a business in a quantifiable way. Essentially, it is a system that classifies skills within an organisation, government or educational institution into groups and clusters.

Why is this now important enough, that not only companies are creating their own but governments and educational institutions? 

Until very recently we relied on keyword mapping and matching and in fact many job platforms and HR Technologies still do. The challenge with this traditional approach has led to people not being discovered for roles they could excel in, misguided career pathing and missed learning opportunities. Skills are a dynamic asset we individually acquire throughout life, so to categorise them into keywords and hope technology accurately leverages this information on this datasource is actually crazy. 

The importance of accurate skills mapping and classification has risen in line with the evolution of lifelong and micro credential learning as well as the importance of being inclusive at all stages. Smart skills taxonomies will ensure that each individual employee, student or graduate is fully represented in terms of their complete skills set. This is why the US government has development ONET, the European Union has development ESCO and China is now developing their own Skills Taxonomy. 

So what is the importance of a Skills Taxonomy;

1. Accurate skills classification - all of your skills whether hard, soft, acquired or “natural” can be mapped and clustered. Through the Digital Skills Passport we are enabling companies and educational institutions to access an extensive Skills Taxonomy or integrate to one they have developed. As a result, there is now a way of measuring and mapping skills acquisition in real time so gaps can be identified and L&D can receive the insights for future skills investment. 
2. Lifelong curated learning - the idea of a degree and job for life is gone. People are hungry to learn (78% of employees are happy to learn new skills) but serving up libraries of content has the reverse impact on high engagement. A skills taxonomy can enable the employee or student to self-select the desired skills or be accurately guided to the skills that can help achieve their goals so now every user has their own personalised L&D journey. 
3. Inclusive skills matching - in this hybrid world, the fear of presenteeism meaning promotion is creeping in again. Therefore it is more important than ever to support internal talent matching, whatever model you operate. A diverse inclusive matching system that is based on skills first can transform any unconscious bias an organisation may have to internal employees or graduate hires. It can also revolutionise alumni and mentor matching programmes.
4. Personalised Career Guidance - It is estimated that 73 million jobs will be replaced by technology but at the same time 85 million jobs could go unfilled by 2030. Personalised career guidance based on accurate skills data mapping, future skills predictive analysis and available learning is key to supporting people in their employability and companies in reversing skills shortages and investing in their people. 
5. Skills asset mapping for future proofing - an integrated skills taxonomy that accurately leverages AI and ML to cluster, map and predict will give the competitive edge to companies and educational institutions. 87% of companies know they have a skills gap but don't know what skills they are. With skills mapping layered on top of a skills taxonomy now real time skills gap analysis can happen so that the future development of curriculum and learning can meet the needs of industry. 

The major risk

Skills lost in translation - If there was one global skills taxonomy then this risk would not exist. However, like with any international cultural communication, key information can be lost in the translation and nuances. If you are a headquartered US Company using ONET as your key skills taxonomy but then have European offices leveraging ESCO, the skills classification is different and therefore can create bias in mapping, matching and even forecasting. 

What's the solution

A master skills taxonomy that can inclusively communicate, translate and cluster any skills taxonomy for effective and inclusive skills mapping and matching. This would mean that no student, graduate or employee is mismatched to work opportunities and would receive the best personalised and curated experience for lifelong learning. 

Summary 

The evolution of the Skills Taxonomy is an exciting breakthrough for governments, enterprises and educational institutions. It is estimated that G20 countries could miss out on $11.5 Trillion from skills gaps by 2030 if they are not addressed. This asset class if mapped accurately will lead to smarter investment in learning and the future proofing of skills so economies can thrive in our ever changing wonderful world. 

By Vanessa Tierney 

CEO - Abodoo 

About us

The Skills data and development team at Abodoo have worked incredibly hard to crack this and in development we have the first global skills translator which will mean that as a master taxonomy it will inclusively communicate and translate with any skills taxonomy. 

Our three core products for enterprise, education and government are;

1. Revolutionary Digital Skills Passport with QR code and personalised learning integration
2. Skills Mapping for gap analysis
3. Inclusive skills matching to support internal talent pools. 

If you are planning your skills strategy for 2023, we would be delighted to hear from you

[email protected] 

Abodoo