How to Create a Skills Matrix for Your Teams in 9 Steps

Using a skills matrix within your organization can help you enhance your team’s productivity, minimize skill gaps, and ensure that every member is equipped for success—all while having an easy-to-use visual representation of your team’s competencies.

In this article, you’ll get a step-by-step guide on creating a skills matrix that leaves no unanswered questions. We’ve also included concrete examples at every step to help you understand exactly what you need to do next.

Step 1: Define the objective of your skills matrix

The primary goal of a skills matrix is to provide a visual representation of the skill sets and competencies available within a team or organization. It helps:

• Identify skill gaps
• Support targeted employee development
• Ensure the proper allocation of resources for optimal team performance and strategic growth
• Enhances the overall efficiency and effectiveness of workforce planning and talent management

A skills matrix focuses on professional growth and aims to enhance team capabilities, support career development, and align skills with strategic goals. This approach improves employee retention and ensures the organization is equipped to meet future challenges.

Some other business objectives you can set when creating a skills matrix include:

• Enhancing team capabilities and tailoring training programs to meet individual career aspirations
• Supporting career development and clarifying potential career trajectories
• Efficiently assigning staff to projects based on skill availability and capacity
• Aligning skills with strategic goals and identifying complementary skills across teams
• Ensuring you have qualified individuals ready to fill key roles as they become available
• Using skills data to refine workflows and reduce inefficiencies
• Promoting flexibility and adaptability in response to changing business needs

Step 2: Define the scope of the skills matrix

The second step in creating a skills matrix is to define its scope—whether it will be focused on role-level, departmental, or organizational needs.

• Role-level matrix: Focuses on specific job roles and detailing the skill sets required for each—this approach is beneficial for roles with unique or highly specialized requirements
• Departmental matrix: Covers skills within a particular department—this makes it ideal for larger organizations where teams have distinct functions and need tailored skill assessments
• Organizational matrix: Encompasses skills across the entire organization, providing a comprehensive view of all employees’ competencies.

The choice between these scopes largely depends on the organization’s objectives and size.

Don’t forget the scope of the skills matrix is also closely tied to the organization’s objectives picked for step one. A comprehensive organizational view is necessary if the goal is to align existing employee skills with strategic business goals. This may involve creating a single document for smaller organizations or multiple departmental matrices for larger ones.

By defining the scope accurately, the skills matrix can:

• Serve as a strategic tool to enhance workforce planning
• Support career development
• Align employee capabilities with the company’s long-term goals

Step 3: Identify the necessary skills in your organization

To create an effective skills matrix, it’s essential to identify and list all the skills and competencies required across various dimensions of your organization. This includes specific projects, individual roles, departments, and the organization as a whole.

You should consider:

• Soft skills like communication, team leader capabilities, and emotional intelligence
• Hard skills such as technical abilities and specialized knowledge

This comprehensive approach ensures that all critical capabilities are accounted for, promoting a well-rounded and skilled workforce.

To further refine this process, look closely at the new skills needed for different roles within your team or department. Identify both the core skills crucial for success in a particular role and additional skills that would be good to have.

A good starting point for determining which skills to evaluate is your company’s career framework. This framework is a written definition of each role’s core competencies, including:

• Soft skills: Communication, teamwork, problem-solving, emotional intelligence, etc.
• Hard skills: Job-specific technical skills such as web analytics, SEO, data analysis, etc.
• Values: How an individual embodies the organization’s values and cultural principles.

Organizations vary in how they approach this. Some maintain a single, generic competency model for all roles, offering a broad overview. Others develop detailed progression paths for every role and level, providing a clear roadmap for career development within the organization.

If your company doesn’t yet have any of these prepared, access our free templates to start using your own:

• Competency Framework Template
• Leadership Competency Framework Template
• Core Competency Matrix Template

Step 4: Create the matrix structure and rating system

Create a matrix with roles or individual employees listed along one axis (rows) and skills listed along the other axis (columns). This format allows you to visualize the skills possessed by each role or employee.

Ensure all relevant skills identified during step three are included as column headers. This may contain hard and soft skills essential for roles or projects within your organization.

Establish a rating system to evaluate proficiency levels for each skill. Keep the rating scale clear and intuitive to facilitate accurate assessments.

Example rating system:

• Level 0: No skill
• Level 1: Beginner
• Level 2: Proficient with some oversight
• Level 3: Independent proficiency
• Level 4: Expert and a mentor sought out for expertise

Limit the rating scale to a maximum of five levels, as recommended by Laura M. Hume to ensure distinctions remain meaningful without becoming overly granular:

Alternatively, you should define a color grading system to visually represent particular skill proficiency levels. This will help create a heatmap-style visualization of skill distributions and gaps across the matrix.

Example color grading system:

• Red: Indicates low proficiency levels (e.g., Level 0 to 1)
• Yellow: Represents developing proficiency (e.g., Level 2)
• Green: Signifies high proficiency levels (e.g., Level 3 to 4)

Step 5: Collect data on current employee skill levels and populate the matrix

One of the most common ways to create a skills matrix is via Excel. Follow the below steps to create a skills matrix in an Excel document:

• Create a table or matrix with the skills listed in the first column and name it “Skills”
• Write down the team members’ names horizontally in the column “Employee name”
• Create the columns “Expertise” and “Interest” under Name
• Add the data on expertise and interest levels collected earlier

Doing this will give you an overview of each employee’s abilities and skill level. Sort the skills into categories based on their contribution to practical project completion.

You can evaluate the current skill levels of all team members through self-assessments, peer reviews, or manager evaluations.

Step 6: Analyze the results

Once your skills matrix is populated, examine the completed matrix to identify strengths, weaknesses, and gaps that need addressing.

Conduct a calibration session where stakeholders review and validate assessment data for consistency and accuracy. Then, you can collaborate on action plans to address identified gaps and leverage strengths effectively across the organization.

What to focus the analysis on:

• Identify skills gaps and training needs:- Highlight areas where multiple employees lack proficiency, indicating a need for training
• Identify internal subject matter experts:- Identify highly skilled employees who can be mentors or trainers. [If this is an objective, one of the rating scales can be “constantly exceeds expectations” or “sets a new standard” to differentiate the top “skill masters”

Step 7: Develop an action plan to address gaps

Based on the analysis, create a plan for training, hiring, or reallocating resources to bridge any identified skill gaps.

You can also consider setting up mentorship programs. These allow you to pair less experienced employees with experts for on-the-job learning. This facilitates knowledge transfer, preparing your team for future challenges and aiding succession planning efforts.

Step 8: Review and update the matrix regularly

Establish a systematic review and update process to maintain the skills matrix’s relevance and effectiveness. Regular updates ensure the matrix evolves with changing business needs, technological advancements, and employee development.

Consider establishing a feedback loop process to incorporate feedback from employees and managers to refine the matrix. Use anonymous feedback tools to encourage honest responses and review feedback to identify common themes or areas for improvement.

Step 9: Leverage the skills matrix data for other HR processes

Use the data from the skills matrix to inform other HR processes such as employee performance reviews, succession planning, and recruitment. Integrate this list of skills matrix data with other HR systems and processes to ensure a holistic approach to talent management.

Some examples of how the integration can look like are:

• Succession planning: Identify high-potential employees and plan their career paths based on their required skills and competencies—this makes for a seamless transition when key personnel leave and motivates employees by providing a clear career progression roadmap for growth within the organization
• Recruitment: Align hiring process criteria with the skills your organization needs (as identified in the skills matrix)—this targeted approach ensures that new hires bring the specific skills required, fostering a balanced and high-performing team
• Learning and development: Align the skills matrix with ongoing training and development plans and programs—following this approach ensures your employees know what you expect from them and where they stand compared to your expectations for their specific role

Tools for creating a skills matrix (+ Free templates)

Various tools offer the flexibility and functionality needed to create an effective skills matrix, simplifying the process. Classic solutions such as Excel and Google Sheets are highly customizable with numerous formatting options. Pivot tables and charts further support visual data representation that’s easy to share and accessible from any device.

Complementary resource: Get our skills gap analysis template for a more in-depth analysis considering skill importance and proficiency.

These free templates are a great resource, especially for smaller organizations creating or improving their HR processes. However, for growing organizations, juggling multiple Excel sheets and documents with policies and training plans is not time or cost-effective. You will have to:

• Get input from all stakeholders and teams
• Ensure said data is valid and fair
• Constantly worry about accidentally messing up anything in Excel
• Keep the matrix up-to-date

Manual skills matrices quickly get overwhelming and complex to manage, making it challenging to pinpoint and reference specific skill gaps or development needs within different teams. In such cases, software solutions will offer a better alternative. Deel Engage is a software solution that will automate and increase the efficiency of your skills matrices and overall talent management processes.

Assess and develop employee skills with Deel Engage

Deel Engage helps organizations:

• Get valid, unbiased data via customizable feedback forms to build high-performing teams
• Automatically engage all stakeholders - send reminders with a slick if reviewers fall behind on their assessments
• Calibrate your skill assessment data to ensure consistency across the organization
• Scrutiny your automatically generated skills matrix once the review cycle is complete
• Automatically keep your skills matrices up-to-date with regular feedback cycles (performance review, etc.)
• Use bar and radar charts, 9-box grid, or skills matrices to stay on top of goal progress, identify high potentials, and uncover development opportunities
• Give your people a roadmap for professional growth and keep your team motivated
• Train your people
 with internal and external courses

Build a highly-performing team and better assess your team’s skills with Deel Engage. Request a demo today.