Skills Management in Project Management: Definition, Benefits and Prerequisites

Resource management is a huge challenge for many companies. Which staff member to use for what project? And when? This does not only depend on the availability but also on the skills of the staff members. Yet, how do you ensure that the demand for certain skills is covered? Skills management will pave the way.

You will learn about the following topics in this article:

• Definition skills management / competency management?
• The benefits of skills management
• The prerequisites for skills management
• How to implement skills management
• Skills in tactical resource planning
• Long-term focus when assigning resources
• Organizational changes after implementing skills management
• The strategic benefits of skills / competency management
• Conclusion – Skills management in project management

Let us begin!

Definition Skills Management / Competency Management

Competency or skills management is the refinement of resource management. It makes it possible to specify resource requirements in detail according to skills and their characteristics. If the employees’ skills are recorded in this way, this even enables automatic resource allocation.

This makes skills management a powerful tool for using resources efficiently in projects. It has a strategic, a tactical and an operational aspect.

Strategic: From a strategic perspective, skills management is a combination of knowledge and human resources (HR) management. The aim is to determine the different skills required and the corresponding capacity requirements. This must be based on the strategic focus. It is possible to set priorities in good time to advance the desired long-term development of the workforce.

Tactical: Tactical skills management is a whole different story. Team leaders have to provide the right number of suitable staff for the required dates. In consultation with the HR department, they must look after their staff’s training and induction.

Operational: As part of their career management, individuals receive training and development according to the requirements of their teams.

The Difference between Skills and Competency Management

Competency management ‘means “the systematic handling of the company’s competence in line with the company’s overall objectives”. In this case, it operates at the strategic level of corporate management. Skill[s] management, in turn, operates at the level of personnel selection, personnel development, and the deployment of personnel in various positions.’ (Source: Mystery Minds)

However, these terms are often used interchangeably and synonymously.

The Benefits of Skills Management

Skills are abilities possessed by a team member at the company. Usually, each team member possesses several skills. These can be software skills, product-specific knowledge, certifications (e.g. as a project manager) or languages.

From the project management perspective, skills management represents a more flexible management of resources. It makes it possible to define the resource requirements for the projects not as individuals but generically as skills.

Thus, it becomes faster to determine – in principle and before the project start – whether a project can be carried out with the available capacities and skills. In subsequent weeks / months, the generic resources will be replaced with individual names.

Learn more about tactical resource planning: Project Resource Management

This approach carries an important benefit. With generic resources, you will have to put less effort into rescheduling projects. After all, no individuals are scheduled for activities further in the future whose availability might change in the meantime.

This even permits a tool-based automatic resource allocation, if the skills of the staff are registered accordingly. However, this approach does not consider social aspects or other soft factors which are usually impossible to reproduce in software.

This is why such methods often do not produce optimal results. In such a case, software can make suggestions. But it will not be able to fully replace good collaboration between project managers and team leaders.

The added value for the company is that deficits become visible. As a result, these can be addressed specifically. Therefore, you should always aim to have a team with predominantly evenly distributed knowledge.

This makes it easier to distribute the requested skills to all team members. The fewer differences exist between the team members’ skills, the less complicated the planning and redistribution will be.

Flexible personnel placement is also a key factor in strengthening competitiveness.

Our tip: Try to spread the knowledge as evenly as possible within the teams. The fewer differences exist between the team members’ skills, the less complicated it is to plan and reallocate the requested activities.

The Prerequisites for Skills Management

The most important prerequisite for making skills management work is this: the abilities of the staff members must be documented as fully as possible.

In bigger companies, this will not be possible without the approval of the employee organization.

Gathering employee-related data is one of the biggest challenges. Once their skills become transparent, staff members often fear disadvantages compared to other colleagues. This concerns e.g. personnel decisions such as promotions or lay-offs.

The significance of skills management is also highlighted in the PM Trends article.

You will only be able to alleviate these fears on the part of the employees, if both sides derive real benefit from skills management. At any rate, you should ensure that the recording of skills is integrated in a consistent personnel development plan. It can include, for example, further training, incentive systems or the like.

This enables staff members to see a benefit for themselves. After all, they have improved opportunities to further develop their own skills and increase their value for the company. Once the staff see more advantages than disadvantages, you will be more likely to obtain the necessary acceptance for skills management.

Our tip: Alleviate the fears on the part of the employees and further the acceptance of skills management with a consistent personnel development plan. Collaboration with the responsible bodies is a vital prerequisite for this.

How to Implement Skills Management

Step 1: Recording the Skills

• Option A

A first step towards the implementation of skills management can be to record the skills by teams rather than individuals. In such a case, the team leader names the skills of his or her team in general.

But this makes the team leader the only one who can select individuals from the team according to their abilities. By and large, this rules out automated selection.

On the one hand, this anonymization of skills will help you reduce the fears of the staff mentioned above. On the other hand, it may reduce the motivation in the teams, as there is a lack of personal incentives.

• Option B

You would take a different approach if you wanted to plan the individual skills for each person. In that case, each member of staff should be requested at regular intervals to update their own data and to align them with the responsible team leader.

• Option C

An even better system for skills management can be achieved if you also document the level of the skills. This gives you the details of how well certain skills are commanded by the respective team member. In the end, it is essential to know whether a newcomer can be assigned to a task or if it requires an expert.

However, this is also the most sensitive point for agreement with the employee organization. But as long as the staff members declare this themselves or a uniform qualification system exists, you should be able to overcome this hurdle, too.

Step 2: Handling Skills and Capacities

Each team member has an employment contract. From the capacity of weekly or monthly working hours, it is possible to calculate the project availability after subtracting vacation times and operations.

Ideally, you will have several people with the same skills on one team. In such a case, their availabilities can be added. For example, you may receive requests for three people of which you have ten on your team. You can respond to the requests easily by looking at these team members’ remaining availability.

But how would it be if your team members had different skills?

Your ten engineers can handle five different technologies, but not each of them can handle all five. Some may be able to handle only one, others may command all five.

The capacities and availabilities of the team members with multiple skills should be considered irrespective of the number of skills.

Example: If it is possible to have one team member, who is project manager, software developer and database administrator, you still have one team member with three skills rather than three team members with one skill each. Therefore, you cannot state capacities per team member and skill in such a case, but only per team member.

Someone may ask about the available capacity for software developers or database administrators. The answer might be eight for the first case and five for the second. But you only have ten people on the team. Still, the answer would be correct as long as the requests do not come all at once.

After all, your individual team members cannot do everything at once. At times, they will only be able to do the one thing or the other.

One solution for the dilemma of the multiple skills would be to allocate half the capacity of a person to one skill and the other half to another skill.

But be aware: this would entail that an overload situation would appear in the case of an engagement of over 50 percent for an individual even though he or she still has remaining availability.

This is why we recommend the normal allocation of the capacity to the individuals, regardless of their skills. The skill allocation per person ensues step by step.

Our tip: Allocate the capacity to the individuals regardless of their skills at first. In a second step, perform the skill allocation per person.

Skills in Tactical Resource Planning

In tactical resource planning, skills management is different depending on whether you are in a line or a matrix organization.

Note: By tactical resource planning, we mean the coordination between project and line managers. It depends on the company’s form or organization (matrix or line). The goal is to meet the requirements for resources with the necessary skills for projects in a timely manner using staff from the line. This is usually the team leaders’ task.

Skills Management in Line Organizations

In the line organizations, skills management at a tactical level is not very challenging. The project manager will forward the required work packages to the team leader. The latter knows the skills within his or her team. Thus, he can assign them optimally.

Skills Management in Matrix Organizations

Yet, in matrix organizations, the project manager must define the requirements for the desired project team members. These can be checked for accordance and availability with the available skills in the different teams.

Good skills management can speed up this process considerably and also improve it. With it, it will transpire quickly which skills are required, who matches these at which site and how well. And who is also available besides.

A degree of anonymization will come with a growing number of people to assign and their dispersion across different sites. This can actually be of advantage. It forces project managers to directly request skills rather than people, as they do not actually know the people.

What makes this an advantage? Without skills management, project managers will only ever request the resources they know directly. Thus, specialisms will come sneaking in, which is doubly risky. The specialists are booked constantly and also overbooked, as alternative people for the tasks are “unknown”.

However, this will not give the “known” people time to share their knowledge, nor will it benefit their health. And in the worst case, resources, which are already scarce, are unexpectedly absent. This will be much more painful than maintaining a system for skills management.

What is more, requesting skills rather than people forces the project managers to formulate the requirements more precisely. This in turn enables the team leaders to distribute the work more evenly among all suitable individuals.

Our tip: Rely on requesting skills rather than people. This allows the team leader to distribute the work more evenly among all suitable individuals.

Long-Term Focus When Assigning Resources

When assigning resources to projects, you can distinguish between two approaches:

• You focus on the advantages for the project: as a planner, you employ largely those team members that best meet the requirements. These individuals will carry out the tasks fastest and with high quality.
• You focus on the advantages for your company: you rely more heavily on individuals who do not (fully) possess the required skills. These will develop in the course of the project and acquire the required know-how. This may take longer, the profit may be lower, but you create knowledge. The project will have disadvantages, but the company will profit.

Try to follow the second approach whenever possible. Ultimately, more people with frequently required skills become available this way. This makes future human resource planning more flexible.

In addition, you reduce the danger of exclusive knowledge. This decreases your company’s dependence on individual people.

At the same time, the motivation of these knowledge bearers may increase if they get the opportunity to learn, become more important and can accomplish more than just routine jobs.

Our tip: As a team leader, rely more heavily on individuals who do not (fully) possess the required skills. This makes your future human resource planning more flexible, as you create knowledge in this way.

Organizational Changes after Implementing Skills Management

When planning with staff skills, it is irrelevant for the project manager which organizational unit a resource belongs to. All he or she needs is a note as to whether there is sufficient capacity for the required skills at the required date.

Ideally, skills management software would report:

• which resources at the company possess the required skills
• whether the latter are available during the desired period of time

Another interesting read: Requirements for Resource Planning Tools

If skills management is done consistently, the request from the projects will not be addressed to the team leader directly. The future coordination process of tactical resource planning will be possible e.g. via central resource managers or a Project Management Office (PMO).

This becomes possible, because the company’s organization structure changes accordingly. Certain resources could be allocated from a central and location-independent pool.

Ideally, you would have:

• Staff members used only in projects who do not carry out any operations (except for team meetings)
• Staff members only carrying out operations who are not used in projects

The advantage is that this further increases the plannability in the team. However, this is only possible where:

• Tasks can be separated clearly (for this, the workload on both sides, i.e. for project activities and operations, must be stable, without the necessity to change over and over again)
• Knowledge building can be ensured, which is often required on both sides

The Strategic Benefits of Skills / Competency Management

Let us briefly look at the strategic aspect of skills management. It provides the following benefits:

• In project portfolios, it will reveal if bottlenecks for capacities and skills are to be expected, and when.
• It becomes possible to counteract these in good time, i.e. via targeted training, recruitment or cooperations cooperation are ways to prevent future bottlenecks.
• You will find out at an early stage when certain knowledge is no longer needed.

From a strategic perspective, it is essential to combine these approaches of asserting which skills are needed and which skills have become unnecessary. This method allows you to train people whose skills will be less sought-after in the future to meet new demands in good time.

Besides good skills management, successful strategic capacity planning requires an enterprise-wide resource overview. The graphic below shows how a tool based on an enterprise-wide resource pool can support the dynamic assignment of skills and staff members to strategically valued projects.

Conclusion – Skills Management in Project Management

This article has taught you that skills management or competency management is a very advanced form of resource management. You are now familiar with the most important benefits from a strategic and tactical-operational point of view.

But it will not be easy to establish this approach. Reservations on the part of the staff members who fear disadvantages for themselves are very common. It is possible to alleviate these if the high effort for recording the skills is tied in with concepts for personnel development.

And you now know that you should focus on requesting skills rather than individual people. This allows the team leaders or resource managers to distribute the work more evenly among all suitable individuals.

Our final tips

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Is there anything you would like to add regarding skills management? What gives you a headache? We will be happy to respond to your comment below!

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