How To Effectively Assess Employee Skills: A Beginner’s Guide

Conducting employee assessments is an essential aspect of managing a successful team. A good understanding of your team’s abilities allows you to identify knowledge gaps, strengths, and areas for improvement. In addition, it’s an essential step used in the onboarding process to evaluate the abilities of new employees.

As an employer, knowing where to start, what assessment tools to use, and what skills to measure can be challenging. In this article, we’ll explore the steps to effectively assess employee skills and provide actionable tips to help conduct an efficient employee evaluation.

What is a skills assessment?

A skills assessment is a process used to evaluate an individual’s abilities, knowledge, and competencies in a particular area. The process typically involves completing specific tests and tasks to demonstrate some level of proficiency in a given skill set. Such activities are critical to onboarding, career development, promotion, and certification processes. To score an individual, you may consider using a skills matrix template.

Assessing employee skills is crucial for employers, as it helps identify areas where employees may need additional training or skill development. LinkedIn’s 2023 Workplace Learning Report reveals that 83% of organizations aim to build a more people-centric culture, and learning and development is a common strategy for 81% of these organizations. Besides improving their company culture, achieving set business goals, upskilling employees, and enhancing employee retention are other common objectives among these organizations.

What are the benefits of an effective skill assessment?

There are a lot of benefits that come from evaluating employees’ competencies. Below are some benefits of conducting an effective skill assessment:

• A better understanding of workforce competencies. When conducting skills assessments, employers typically require employees to complete written, verbal, or practical exams. Based on each employee’s skill level, management gains insight into the skills and knowledge of their employees, which can help with informed decisions that guide talent management and hiring processes.
• Closing skills gaps. According to data from Springboard, 70% of companies believe they already have a skills gap. Since skills tests provide objective data about workforce performance, companies can identify areas where their competencies fall short.
• Better planning for training and development initiatives. Evaluating your employees’ competencies gives you an idea of their abilities and how they measure up to their career path and the overall company vision. Data from the assessment also helps to decide which methods are most effective for training and organizing personalized development plans based on individual performance and professional goals.
• Increased employee engagement. According to a CSRWire survey, career development opportunities are an important key in increasing employee retention rates. Over 60% of employees agreed they’d be more likely to stay with a company that provides better learning opportunities to enhance their skill set and advance their careers.

The employee skills assessment process

Considering the general importance of skills assessments, ensuring the credibility of the process is essential to achieving the desired results. The steps below explain what to consider when planning a skills assessment.

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1. Understand the skills to be assessed

To identify the relevant skills to assess, consider the job requirements and the tasks and responsibilities employees are expected to perform. Review job descriptions and measure them against each employee’s job performance data.

You can assess different types of skills in an employee skills assessment. Some examples include:

• Technical skills. These are job-specific skills required to perform specific tasks or operate specific equipment. For example, this includes programming skills for software developers or welding skills for metalworkers. A typical way to assess skills is to conduct written exams or test projects.
• Soft skills. These interpersonal skills are important for effective communication, collaboration, and problem-solving. Examples include communication, leadership, and conflict resolution. Employers typically measure these skills by observing the individual’s behavior throughout the assessment period.
• Transferable skills. You can apply these skills across multiple jobs and industries. They’re typically hard skills employees have developed through previous work or education, such as proficiency in a particular software program or a specific method for data analysis.
• Job-specific knowledge. These skills refer to the specialized knowledge and understanding of specific products, services, or processes. They are often acquired through education, training, and experience in a particular field or industry. They also vary with the job or industry.

2. Choose the right assessment methods

There are several methods for assessing skills, each with strengths and weaknesses. Some common skill assessment methods include:

• Self-assessment. The self-assessment method involves having employees assess their skills and abilities. For each employee, you may develop a questionnaire that helps them answer critical questions about their strengths, weaknesses, interests, and performance. While it can be subject to bias, a self-assessment can be an effective way to encourage self-reflection and self-evaluation. The subsequent improvement can be less intimidating than other assessment methods, all while creating opportunities for fruitful conversations about skills and expectations.
• Peer assessment. With the peer assessment method, you pair up employees to assess and evaluate their team member’s skills. Peer assessment can provide valuable insights into teamwork and collaboration. However, employees may not feel comfortable assessing their peers. A level of anonymity in the process can help.
• Supervisor assessment. Supervisor assessment can be effective in identifying specific areas for improvement and setting development benchmarks, and it can help ensure the assessment aligns with the job requirements. However, this type of assessment can be subject to bias and requires a skilled and knowledgeable supervisor, so comparing this assessment with other assessment methods can be beneficial to get the big picture.
• Performance appraisal. A performance appraisal involves evaluating an employee’s job performance over a set period. Performance appraisals can provide a comprehensive view of an employee’s skills and abilities and help align the assessment with job performance goals. However, it can be time-consuming and may not assess the individual’s soft and transferable skills effectively.

Other crucial factors include assessing resources, employee population, and method reliability. Once you’ve chosen metrics and the assessment method, it’s time to develop a comprehensive plan for how the assessment program will run.

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3. Develop an effective assessment plan

Here are some key considerations for developing an effective assessment plan:

• Establish clear objectives and goals. Define the purpose of the assessment, the metrics you’ll assess, and the desired outcomes. Clear objectives and goals help ensure that the assessment is focused and effective in achieving its intended purpose.
• Create a timeline for the assessment. Ensure you create a schedule that considers the time needed to plan, conduct the assessment, and analyze the results. A timeline helps ensure the assessment is timely and doesn’t interfere with other business activities.
• Determine who will conduct the assessment. The next step is to determine who will conduct the assessment. This may involve selecting a team of assessors, such as hiring managers, supervisors, or subject matter experts, or outsourcing the assessment to a third-party provider.
• Provide clear instructions and guidelines. You’ll need to provide clear instructions and guidelines for the assessment process to ensure it’s conducted consistently and fairly. Having laid-out instructions helps guide the examiners and ensure the activities are consistent with the company’s culture and objectives.
• Determine how results will be analyzed and reported. You can use software like Skills Base, Pluralsight Skills, and TalentGuard to monitor soft skills, design skills assessment tests, and generate relevant analytics in real-time. You may also use Google Forms to get more interactive employee feedback before analyzing them manually.

4. Conduct the assessment  

Employee skills assessment is an important step in making critical business decisions. Here are some tips for conducting an effective assessment:

• Provide adequate training to assessors. Assessors are professionals who conduct the assessments. They must be trained on the assessment methods and criteria to ensure an accurate process. In addition, they should have excellent analytics and communication skills to provide constructive feedback and accurate evaluation of data generated in the process.
• Ensure fairness and consistency in the assessment process. Use objective criteria to evaluate employees’ skills, providing equal opportunities for all employees to participate in the assessment process. Assessors should avoid any biases or prejudices that may affect the results.
• Encourage open communication and feedback. Provide opportunities for employees to ask questions and provide feedback on the assessment process. You should also give employees feedback on their performance, offering guidance on improving their skills.
• Ensure confidentiality. Confidentiality makes individuals feel comfortable participating in the assessment process. Respect employees’ privacy and avoid any conflicts of interest. Ensure the assessment results are only shared with those who need to know and that the information is handled securely.

5. Analyze the results

Here are some key considerations for a proper employee performance review analysis:

• Evaluate the results of the assessment. The first step is to evaluate the assessment results to identify areas where employees excel and areas where they need improvement. Look at the scores and feedback provided by assessors and analyze the data to identify patterns and trends.
• Identify gaps in skills. Identify areas where employees’ skills aren’t meeting the requirements of their specific roles or where there’s a significant difference between their current skills and the skills required for their future career growth.
• Develop an improvement plan. Based on the assessment results and identified skills gaps, the next step is to develop a plan for improvement. Set specific goals for employee development and identify the developmental and training programs that can help employees acquire the necessary skills to meet those goals.

6. Provide feedback and coaching

For providing feedback and coaching after the assessment process, keep these tips in mind:

• Deliver feedback in a constructive manner. Offer feedback that focuses on employees’ strengths and opportunities for improvement. Keep an objective tone, and mention specific points where they excelled and areas where they need improvement. Then, present actionable instructions highlighting areas where employees can make meaningful changes.
• Provide coaching and resources. Once opportunities for improvement have been identified, provide coaching and resources to help employees develop the skills they need. You may provide training, mentoring, coaching opportunities, or other resources to help employees acquire the skills they need to succeed.
• Monitor progress. Finally, monitor employees’ progress over time to ensure they’re achieving their goals. Progress monitoring involves providing regular feedback, coaching, and tracking their performance to ensure they develop the skills needed to succeed.

Best practices for conducting employee skills assessments

Consider several factors to ensure you conduct an excellent employee skill assessment. Here are some best practices to follow during the process:

• Communicate the purpose of the assessment. Ensure employees understand how you will use the assessment data and what the company hopes to achieve by conducting the assessment. They should also know who will access the data and how you will handle any sensitive information.
• Determine the scope of the assessment. Develop clear and objective assessment criteria relevant to the job roles and responsibilities. Be specific enough to gather meaningful data without overwhelming employees with too many questions or details.
• Use a variety of assessment methods. Different assessment methods can provide valuable insights into various types of employee skills and competencies. Consider using a combination of methods to cross-evaluate the result to improve its validity.
• Provide training and support for assessors. Ensuring assessors are appropriately trained and understand the assessment criteria and methods can help ensure the assessment results are accurate and consistent.

Find skilled employees with Upwork

Effective skill assessments are crucial for identifying the strengths and weaknesses of employees and determining the areas where they need to improve. Investing in employee development can lead to numerous benefits, including improved job performance, increased job satisfaction, and reduced turnover rates.

If you’re looking for skilled professionals to help you conduct effective skills assessments and develop your employees, consider working with competency assessment professionals on Upwork who can help you design and execute these assessments to their fullest potential.

Upwork is not affiliated with and does not sponsor or endorse any of the tools or services discussed in this article. These tools and services are provided only as potential options, and each reader and company should take the time needed to adequately analyse and determine the tools or services that would best fit their specific needs and situation.