Businesses across industries are increasingly prioritizing skills development as a response to ongoing disruption. While change remains constant, learning and development (L&D) efforts are helping organizations adapt and stay competitive.

In fact, The World Economic Forum’s “Future of Jobs Report 2025” found that although employers still expect 39% of workers’ core skills will shift by 2030, the pace of disruption is stabilizing — partly due to a stronger focus on continuous learning and reskilling. 50% of the workforce has now completed training as part of long-term learning strategies, up from 41% in 2023, the research found.

As organizations continue to prioritize skills development to stay future ready, let’s consider how skills taxonomies can be part of the solution.

What Is a Skills Taxonomy?

A skills taxonomy is a useful tool that can help L&D teams create clear role expectations, align learning programs to business needs and use consistent language across departments.

Lisa Paulson, manager of L&D at Nesnah Ventures, describes a skills taxonomy as “a hierarchy of skills that are needed for the organization to be able to realize its goals.”

Skills taxonomies can be broad in scope, outlining the skills required within a specific business function, or more granular, identifying the skills needed for individual job roles.

Nolan Hout, senior vice president of growth at Infopro Learning, defines skills taxonomies as “a classification system of an agreed upon set of skills and definitions of those skills.”

Ultimately, skills taxonomies are about ensuring the right people are in the right roles with the right skills to effectively contribute to the organization’s goals and overarching mission, says Ajay Pangarkar, CEO and partner at CentralKnowledge, and co-author of “Learning Metrics: How to Measure the Impact of Organizational Learning.”

It’s worth noting that although the term “skills taxonomy” may sound like a trendy buzzword, the concept behind it isn’t new, Pangarkar says. Organizations have long been focused on identifying and applying the right skills at the right time to meet business goals. Terms like “skills mapping,” “competency modeling,” “skills inventory” and “skills matrix” may differ slightly in definition, but they all serve a similar purpose of helping ensure the organization has the right skills in place to stay competitive.

Here is an example of what a skills taxonomy might look like for a data scientist role:

Building a Skills Taxonomy: 3 Tips for Success

Creating a skills taxonomy can be challenging given how fast business needs are shifting. Consider these best practices to get started:

1. Identify current and future skill needs.

Start by identifying your organization’s immediate skill needs (i.e., the skills required now to meet current business goals and deliver value to the customer or end user) and future skill needs (i.e., the skills the organization will need to be competitive one, three or five years from now), Pangarkar says.

Identifying future skill needs is especially important for businesses in industries marked by high rates of change. For example, Pangarkar explains, a tech company “may have the necessary skill set today to satisfy whoever’s buying that technology or using that technology.” However, “We know in a year or three years or five years, that technology is looking very different,” and will require an evolved skill set.

Here are a few ways to identify your organization’s current and future skill needs:

• Review current job roles and performance data to identify gaps or strengths.
• Conduct interviews with both stakeholders and employees to gather a well-rounded view of skill needs. Talk with business leaders to understand priorities and where the organization is headed, and with employees to uncover their current challenges and perceived skills gaps. “I think it’s really important to get perspectives from each group,” Paulson says.
• Analyze industry trends and benchmarks to anticipate potential shifts.
• Partner with human resources (HR) to explore succession plans, upcoming technology integrations or business expansions that may require new capabilities.

2. Continuously update and refine.

For a skills taxonomy to be effective, Paulson says, “It needs to be updated and maintained” and “show future skills that are going to be needed, because business changes so quickly.”

After identifying your immediate and long-term skill needs, build in regular touchpoints to revisit and update your skills taxonomies. This will help maintain alignment with shifting business strategies, market conditions and technological advancements.

3. Leverage AI and tech-based solutions.

It’s possible to identify current and future skills manually, using the above techniques to get started. However, technology — specifically, artificial intelligence (AI)-powered tools — “can get you there faster,” Hout says. Solutions from providers like Fuel50, Cornerstone, Infopro Learning and others can help identify skill strengths and gaps based on existing workforce and performance data, job roles and responsibilities, and industry trends.

That said, no AI tool is perfect. For example, Hout explains, you may encounter “false positives,” or skills that are technically related but not relevant in your business context. Still, that doesn’t mean AI isn’t worth leveraging. Even if the output isn’t perfect, it can give you a solid foundation to refine and build upon.

Brenda Sugrue, learning industry advisor and former chief learning officer at EY, emphasized this idea in a recent “Insights to Impact” video series by Udemy Business, sharing, “Speed and flexibility are more important than precision when skills gaps and needs are so great and so fast changing.” Sugrue adds that she’s learned, “particularly from skills management systems, that AI-powered systems really get better with time and use. So I’m actually much more comfortable now to let definitions and estimates of skills emerge from multiple sources of data that the technology and the AI can pull together.”

Greater Skills Visibility: A Win-Win

When employees understand the skills required for new roles, they’re better positioned to grow and advance within the organization. This visibility supports internal mobility by aligning employee development with business needs — a win-win for both employees and the organization.

Hout explains, “There’s a huge cost to bringing in [someone] new. If you’re able to move them laterally, it’s the proverbial win-win, right?” It’s a win for the company because it retains talent, avoids the cost and time of onboarding someone new, and fills a key role. And it’s a win for the employee, who is “now better able to leverage their skills in a job that is better suited for them.”

By creating targeted skills taxonomies, L&D leaders can help build an adaptable workforce that’s prepared for the future — and whatever changes lie ahead.