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What’s the Most Valuable Asset in Any Business

There’s one thing that all businesses have in common: They all possess one asset that is more valuable than any of their other assets.

The skillful utilization of this most valuable–and usually most expensive–asset is a critical requirement for managers at all levels of the organization.

In fact, regardless of the size of a business, most people agree that the effective and efficient management of this asset is one of the primary determinants of the success or failure of any business.

So, what is this mysterious asset hiding in plain sight in any business?

This mysterious business asset is the human resources of an organization.

Businesses of any size will ultimately succeed or fail based on how they utilize their human resources. When businesses fail to plan they can plan to fail! This saying applies

Firms that take a strategic approach to planning their utilization of their human resources will have a greater chance of succeeding. The first step of this planning process is to assess the current capacity of the organization’s human resources.

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What is a Skills Inventory

Since a firm’s human resources are its most valuable asset, managers need every tool they can find to properly leverage the skills and abilities of employees.

One tool that managers can use to assess the current capacity of the organization’s human resources is a skills inventory.

The skills inventory will provide a snapshot in time of where the organization is currently at in its capacity. (It’s similar to being in a large mall and finding the store map that shows you where you are at relative to where you want to go.)

The use of a skills inventory can be invaluable for meeting a firm’s goals and objectives and for making better management and human resource decisions.

So, what is a skills inventory?

A skills inventory summarizes the skills, education, and experiences of current employees.   Depending on the size and complexity of a business, the process for preparing a skills inventory will vary.

Some businesses use commercial software.  Other firms use database programs.  Some small businesses use simple worksheets or even a paper based system to prepare the skills inventory.

Whatever the method, if done correctly a skills inventory will provide a collective business inventory of the skills, knowledge, and real-world experience that a firm’s workforce possesses.

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The Importance of a Skills Inventory

With a current skills inventory, the management team can identify any gaps that exist between the skills, knowledge and experience that the company has in its existing employee workforce versus what the company needs to meet current and future business needs.

This skills inventory information can then be used by managers for improved decision making in several areas including the following:

• Hiring staff that better meet the current and future needs of the various business units;
• Assigning the right employees to the right functions;
• Staffing internal project teams with the best talent to ensure organizational success;
• Targeting training and development efforts to alleviate existing skill gaps;
• Identifying key employees to develop for future business needs;
• Developing an internal talent channel to replace key employees and managers that depart from the organization;
• Developing a workforce plan for the future strategic needs of the business;

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Keeping Your Skills Inventory From Becoming Obsolete

As these areas show, a skills inventory is a valuable tool. It does have some continuing maintenance requirements however.

Managers should implement a process for regular updating of the skills inventory.  The employee skills, knowledge, and experiences will change over time as the normal processes of attrition, staffing, and training and development occur.  Since a skills inventory is a snapshot of the organization at a certain period of time, a static inventory will lose its value eventually if it is never updated.

A skills inventory is a simple tool for the manager’s toolbox that is also very versatile and valuable if done and used correctly. It can be a valuable tool for meeting the firm’s goals and objectives and making better management and human resource decisions.