A skills matrix is a tool businesses use to evaluate and document the skills and knowledge of their employees. It typically takes the form of a chart or table that lists the various skills and competencies required for a particular job or role, along with the proficiency levels of each employee in those skills.
If you are a solopreneur BAS agent or bookkeeper - this is for you also! Using a skills matrix on your OWN skills can help identify which skills gaps you can fill with contractors and assistants.
A skills matrix aims to identify any skills gaps and ensure business owners know they have the necessary skills within their team or themselves to perform their job effectively. It can also help organisations plan for future staffing needs, identify training and development opportunities, and allocate resources more efficiently.
In this section, we’ll outline a skills matrix and provide an example. You’ll understand how a skills matrix can benefit business owners and solopreneurs, how to create a database of skills, apply a grading system and understand a matrix to evaluate staff, contractors or even yourself.
What is a skills matrix?
A skills matrix can take on different formats depending on the needs and preferences of your business. A simple method to create a skills matrix begins by identifying a list of skills or competencies required for a particular role or task and entering them in the left column of a table.
Then employees or you as a solopreneur and any contractors or team members you might have, are entered in the top row. Managers or supervisors with experience of the person rate the proficiency level of the team member in each skill area on a scale of 1 to 5 (with 1 being low proficiency and 5 being high proficiency).
Example:
| Skills/Competencies | Employee A | Employee B | Employee C |
| Leadership | 4 | 3 | 4 |
| Communication | 3 | 3 | 2 |
| Critical Thinking | 4 | 2 | 3 |
| Financial Analysis | 3 | 4 | 4 |
| Presentation Skills | 4 | 3 | 3 |
The numbers in the table indicate the proficiency level of each person in each skill area. For example, Employee A has a proficiency level of 4 in leadership, a proficiency level of 3 in communication, a proficiency level of 4 in critical thinking, a proficiency level of 3 in financial analysis, and a proficiency level of 4 in presentation skills.
This table is an example. Your skills matrix would likely list more competencies and skills (see below on how to identify skills).
Benefits of a skills matrix for your BAS, bookkeeping or accounting business
A skills matrix is an important tool for organisations for several reasons. It helps identify the skills and knowledge of the team and provides a comprehensive list of required skills for a job or task, mapping them against the skills each team member possesses. A skills matrix allows managers to identify gaps, assess training needs, support career development, increase productivity or outsource the required skills.
Expanded benefits for your business
- Identify skills gaps : A skills matrix helps organisations identify the skills required for each role. Taking the time to consider the requirements of running a business helps to identify areas that have gaps. For example, as a BAS agent, you know exactly how to conduct proper invoicing but may need guidance when it comes to marketing your business. Recognising the gaps allows you to fill those gaps, ensuring the business has the skills required to run effectively and efficiently.
- Assess training needs : A skills matrix helps organisations to identify the areas where additional training or support is required. This enables managers to provide targeted training programs that address the specific needs of individual people. Especially as solopreneurs, it can be challenging to take the time to assess training needs or simply make time for training. Completing a skills matrix lets you quickly see where to start to make a positive difference in your business.
- Increase productivity : By identifying the skills and knowledge required for specific tasks or roles, a skills matrix can help organisations to optimise their workforce and improve productivity. This ensures that people are assigned tasks matching their skills and abilities, improving job performance and increasing efficiency.
- Assist HR in finding replacements : If an employee resigns, a skills matrix can aid HR teams to quickly identify the lost skills and knowledge and determine a suitable replacement. This can help expedite recruitment, saving time and resources in the long term. By identifying the gaps in your business, you can decide which areas to outsource and free up your time to win more clients.
Scenario 1:
A small business owner notices that their sales team is struggling to meet their targets, and they suspect that it may be due to a lack of specific skills or knowledge. They create a skills matrix for their sales team, identifying the critical skills required for successful selling.
After mapping these skills against their sales team, they realise that many employees need certain crucial skills, such as negotiation and product knowledge. With this information, they provide targeted training and development opportunities to fill the gaps in their employees’ skill sets.
Over time, they notice a significant improvement in their team’s sales performance and a higher confidence level in their ability to sell effectively. The skills matrix has helped the business identify areas for improvement and take targeted action to address them, ultimately leading to improved business performance.
Scenario 2:
Mary is a BAS agent and wants to fill out a skills matrix to assess her strengths and weaknesses and identify areas where she can improve. She begins by creating a list of skills and competencies relevant to her job, such as bookkeeping, taxation laws, software proficiency, communication, and customer service.
Next, Mary assigns a proficiency level to each skill based on her assessment of her abilities. She rates herself as proficient or expert in bookkeeping and taxation laws but a beginner in software proficiency. She also recognises that she needs to improve her communication skills, particularly when it comes to explaining complex financial concepts to clients.
Mary then uses the skills matrix to set goals for herself. She plans to attend training courses to improve her software proficiency and communication skills. She also plans to seek feedback from clients and colleagues to help her identify areas where she can improve.
By regularly reviewing and updating her skills matrix, Mary can track her progress and adjust her goals and training as needed. This helps her continually improve her skills and provide better service to her clients, which benefits her business.
How a skills matrix benefits your employees or remote team members.
A skills matrix benefits everyone by providing clear guidelines for the requirements of their position, promoting job satisfaction and encouraging communication between staff.
- Initially, a skills matrix can aid contractors or remote workers in understanding the entirety of their role within the organisation. A previously created skills matrix is a clear guide to the tasks expected of the role.
- Identifying areas for improvement : A skills matrix help to identify areas where there is a need to improve skills and knowledge. This can help people to develop a targeted training plan to address their skill gaps, leading to improved job performance and career advancement opportunities.
- Supporting career development: By identifying the skills required for different roles and tasks, a skills matrix can help people to understand what skills they need to acquire to advance in their careers. This can provide a career development roadmap and help employees set goals for their professional growth.
- Promoting job satisfaction : People who understand the skills and knowledge required for their roles are better equipped to perform their jobs effectively and confidently. This can increase job satisfaction and provide a sense of fulfilment in their work. When working with contractors or remote workers, clarity around their job requirements contributes to their satisfaction and productivity, as they often work alone.
- Encouraging feedback and communication : A skills matrix fosters communication between the team. By discussing their skills and knowledge with their managers, employees can receive feedback on their performance and identify areas for improvement.
Since it is up to you what the skills matrix includes, you can create one based on passions, skills beyond the workplace, and professional development goals. The matrix can also be updated to include your interests, preferences and life goals, creating a holistic window into a strength and growth trajectory.
Scenario 3:
Sarah is interested in advancing her career and taking on new responsibilities within her company. She’s unsure where to start, so she speaks to her manager about potential opportunities. Her manager suggests they review her skills matrix together to identify areas where Sarah could improve and potentially take on new responsibilities.
Together, they review the skills matrix and note that Sarah has advanced proficiency in several key skills related to her current role, but there are a few areas where she could improve. They discuss ways for Sarah to develop these skills, such as attending a training program or working on a project with a colleague with expertise in that area.
With this information, Sarah is able to create a development plan with actionable steps to improve her skills and take on new responsibilities within the company. The skills matrix has provided a clear roadmap for her professional growth and given her a sense of direction in her career path.
How to create a skills matrix
Create a database of skills for a skills matrix following these steps:
- Identify the job roles.
Conduct a thorough analysis of your organisation’s structure: Start by analysing your organisation, including the various departments, teams, and job roles. Identify the different areas that require specific skills and knowledge. If you are a solopreneur or BAS Agent, identify all the many hats you wear during your work day. Include tasks such as taking calls, composing emails and business development client meetings.
- Conduct job analyses.
If this is your first time creating a skills matrix, consider conducting a job analysis to identify the skills and knowledge required for each job role or task.
Job descriptions can be a valuable resource for creating a skills matrix. Job descriptions typically outline the duties and responsibilities of a particular job role and provide an overview of the required skills and qualifications. By reviewing job descriptions for each job, you can identify the specific skills and knowledge needed to perform the job effectively.
It’s important to note that job descriptions may only sometimes provide a complete picture of the skills and knowledge required for a particular job. Therefore, it’s recommended to supplement job descriptions with additional research, such as observing team members performing their duties and interviewing them. For solopreneurs, make sure you consider all the parts of your work day, from taking phone calls to invoicing for clients. You may be amazed at how much work you complete unrelated to your BAS agent role.
- Compile a list of skills and knowledge required for each job role or task.
These may include technical skills and industry-specific knowledge.
For example, if creating a skills matrix for a manufacturing company, include job roles such as machine operator, quality control inspector, and production supervisor. The related tasks for these roles may include operating specific machinery, inspecting finished products for defects, and supervising the production process.
Skills identified will change depending on the type of business you run and the job position you are looking at. As a BAS agent, you know you need an understanding of tax and superannuation laws and regulations. However, have you considered the skills required for sales and marketing?
Some examples of common skills or competencies may include:
| Project management | Marketing |
| Time management | Customer service |
| Communication | Technical writing |
| Leadership | Data analysis |
| Teamwork | Programming |
| Conflict resolution | Graphic design |
| Creativity | Web development |
| Critical thinking | Social media management |
| Problem-solving | Public speaking |
| Decision-making | Coaching |
| Attention to detail | Training and development |
| Planning and organising | Negotiation |
| Strategic thinking | Risk management |
| Financial management | Quality control |
| Sales | Adaptability |
- Assign a proficiency level to each skill or knowledge category.
Once skills have been identified, you will need to assign a proficiency level to each skill. An example of assigning a proficiency level to a skill follows. In this example, proficiency levels have been assigned to the customer service skill, with different proficiency levels defined for novice, intermediate, and expert levels. This allows the skills matrix to accurately reflect the expertise required for each job role or task related to customer service.
Skill: Customer Service Proficiency levels:
- Novice : Basic knowledge of customer service principles and practices, can handle simple customer inquiries and complaints.
- Intermediate : Handles complex customer inquiries and complaints, effectively communicating with customers and managing customer expectations.
- Expert : Able to lead and train customer service teams, develop and implement customer service strategies, and provide exceptional customer experiences.
- Store the database of skills and knowledge.
Store the information in a central location, such as a spreadsheet or database. Keep the database current and regularly review and update the skills matrix to ensure accuracy. The initial work will then be easy to apply to team members as they join or new roles as they are created.
- Populate the Matrix.
Finally, use the database of skills and knowledge to populate the skills matrix, mapping the skills required for each job role or task against the skills possessed by each person.
As in the example provided, after identifying the job roles and related skills, you can input the employee’s or contractor’s name into the table and identify the list of skills required for their specific job role with their name.
Create a grading system.
Create a grading system for the skills database that accurately reflects the proficiency levels of each skill and provides a clear guide for understanding and comparing skill levels.
- Define the proficiency levels.
Determine the proficiency levels that will be used to grade each skill. This will vary depending on your organisation, but common descriptions range from beginner to expert or novice to advanced.
- Identify the criteria for each proficiency level.
For each level of proficiency, identify the specific criteria that define the level of proficiency. This can include the knowledge, skills, and experience required to meet each level.
- Assign numerical values or labels to each proficiency level.
Assign numerical values or labels to each level of proficiency to help identify and compare skill proficiency levels. For example, you could assign numerical values 1 to 5 or labels such as novice, intermediate, and expert.
- Develop a rubric:
A rubric is a detailed guide that outlines the criteria for each level of proficiency and provides clear examples of what each level looks like in practice. Develop a rubric for each skill, detailing the criteria for each level of proficiency and providing clear examples of what each level of proficiency looks like.
Evaluate the skills
Evaluating the skills typically involves a combination of different methods, including performance reviews, skills assessments, self-assessments and feedback.
For organisations with multiple employees, direct managers can comprehensively understand their employees’ skills by using any of these methods. While you may work within a small team (or just yourself!), applying these principles to assess your skills is still possible.
- Performance reviews
During a performance review, a manager can evaluate an employee’s skills and competencies concerning their job role and responsibilities. This evaluation can provide valuable information to develop and update a skills matrix for the employee and their team.
For example, if an employee’s performance review highlights strength in a particular skill, such as project management, the manager can update the skills matrix to reflect this proficiency level. Conversely, if the review identifies a weakness in a particular skill, such as public speaking, the manager can identify training opportunities or development plans to help the employee improve their proficiency in that area.
For future reference: Once you have this resource, conducting a performance review is made much more straightforward by referring to the skills matrix.
- Skills assessments
Skills assessments can help organisations measure knowledge, abilities, and proficiency in specific areas. These assessments can take various forms, such as written tests, practical exercises, or other evaluation forms.
Written tests can be used to evaluate knowledge of a particular subject, such as a programming language, legal regulation, or organisational policies and procedures. Practical exercises, on the other hand, can assess an employee’s ability to apply their knowledge to real-world scenarios. For example, a practical exercise for a software developer may involve building a software application. In contrast, a practical exercise for a customer service representative would likely include handling customer complaints in a simulated environment.
- Self-assessments
Providing people with the opportunity to self-assess their skills and abilities can help to identify areas where they feel confident and areas they don’t. Self-assessment involves colleagues reflecting on their skills and knowledge and identifying areas where they may need additional training or development. This step is particularly relevant for small teams or solopreneurs. Taking time to reflect on the business is an essential step towards improvement.
- Feedback from colleagues.
Feedback from colleagues, or peer feedback, is valuable for evaluating your skills and performance. Peer feedback involves colleagues providing feedback to a team member on their skills, behaviours, and overall performance in the workplace. This type of feedback can provide a valuable perspective on skills, particularly in teamwork, communication, and collaboration.
Peers are often best placed to evaluate colleagues’ interpersonal skills, including their ability to communicate effectively, work collaboratively with others, and build positive working relationships. They can provide insight into others’ strengths and weaknesses and offer suggestions for improvement. This feedback can be constructive when assessing interpersonal skills that are more difficult to measure using other methods.
Organisations may use various methods to gather peer feedback, such as surveys, focus groups, or one-on-one interviews. Surveys are a convenient way to collect feedback from multiple colleagues at once, while focus groups and interviews allow for more in-depth and nuanced feedback.
- Observation.
Observation of employees in the workplace is a critical component of skills evaluation. Managers can observe employees performing their duties, identifying areas where they excel and those that require improvement. Observation works via different means, such as one-on-one meetings, project reviews, and team meetings.
By observing employees in the workplace, managers can gain valuable insight into their strengths and weaknesses and provide them with feedback to help them develop their skills. By observing employees regularly, managers can provide ongoing feedback to improve performance and foster a culture of continuous improvement.
If you work within a small team or have a remote workforce, you can apply these principles to the work delivered by the team member. Answering questions such as whether the work is usually complete and timely or whether feedback is often required will help you assess their work.
Visualise the results
Creating a visual representation of your skills matrix will effectively communicate information to stakeholders and makes the data more accessible. Graphs or charts can help you visualise skills gaps and highlight improvement areas.
For example, you could create a bar chart showing proficiency levels for each skill category. This could help you quickly identify which contractors have the skills you need for a particular project or task and which require further training. You could also use a scatter plot to show the distribution of skills across your workforce, allowing you to see where the strengths and weaknesses lie.
Keep your skills matrix clear and straightforward when creating a visual representation. Use appropriate colours and labels to make it easy to understand and avoid cluttering the chart with unnecessary information. Additionally, update the visual representation regularly to reflect changes in employee skills or new skill requirements.
Are skills and competencies the same thing?
While skills and competencies are related concepts, they are different.
Skills refer to a specific ability or proficiency that an individual has developed through training, education, or experience. For example, a software engineer may have skills in programming languages like Python, Java, or C++.
On the other hand, competencies refer to a set of behaviours, knowledge, and attributes that enable an individual to perform a job or task effectively. Competencies can include skills and broader qualities like problem-solving, communication, leadership, and adaptability.
You may want to develop a competency framework that outlines the specific skills and competencies needed for each role and how they contribute to the organisation’s overall success. This can be a valuable reference for hiring, training, and performance evaluation.
Summary
A skills matrix is a tool that helps businesses evaluate and track the skills and knowledge of their employees and identify any skills gaps that need to be addressed.
By assigning proficiency levels to each skill or knowledge category, businesses can ensure that their staff have the necessary skills to perform their roles effectively and identify areas for improvement and development.
The benefits of a skills matrix include improved performance, career development opportunities, and succession planning. For businesses, it can lead to better workforce planning, talent management, and identifying skills gaps for recruitment and training purposes.
The steps required to create a skills matrix are:
- Identify the job roles.
- Conduct job analyses.
- Compile a list of skills and knowledge required for each job role or task.
- Assign a proficiency level to each skill or knowledge category.
- Store the database of skills and knowledge.
Populate the Matrix.
Once you have created and populated the matrix, you can then use it to evaluate the skills of your staff via Performance Reviews, Skills assessments, self-assessments, feedback from colleagues and observation.
Future best practice.
Implementing and maintaining a skills matrix can be complex, but some best practices can help ensure its success. One tip is to keep the database of skills and knowledge up to date and accurate by regularly reviewing and updating it. This can involve adding new skills as job roles evolve or identifying outdated skills that are no longer relevant.
Another essential practice is communicating the skills matrix’s benefits to the team and management. This can include highlighting how it can help people develop their skills, advance their careers, help management identify skill gaps, and improve workforce planning.
It can also be helpful to provide training and support to employees and managers on using and interpreting the skills matrix and give and receive feedback on performance and skill development. Establishing transparent processes and guidelines for updating and maintaining the skills matrix can help ensure its ongoing success.
The key to successfully implementing and maintaining a skills matrix is to make it an ongoing and collaborative process that involves regular communication, training, and review.