News Analysis
On April 23, Microsoft announced the forthcoming availability of People Skills, an AI-powered talent intelligence platform that aims to help organizations discover, develop and take advantage of employees' capabilities. People Skills is the next iteration of what was formerly known as Skills in Viva.
Microsoft is not the first to offer an AI-inferred skills tool, it does have an advantage over other, stand-alone solutions: the rich context within the Microsoft ecosystem which People Skills pulls from.
From Static to Dynamic Skills Management
Microsoft's People Skills shifts skills management from static data to dynamic, AI-inferred capabilities, said Jeremy Rambarran of Touro Graduate School of Technology.
Traditional systems rely on manual input, HRIS integration or employee feedback — sources often inconsistent or outdated. By embedding People Skills into Microsoft 365 Copilot and Viva, Microsoft recognizes how organizational knowledge continuously changes.
People Skills infers skills using behavioral signals from Microsoft Graph, which provides access to data stored across Microsoft 365 services. That creates a living, dynamic skills map, Rambarran explained. This approach moves skill tracking from static documentation to intelligent insights.
By giving Copilot validated business and personnel data, People Skills provides more contextual support. While earlier Viva modules focused on wellness, engagement and learning, People Skills and the Skills Agent bring automated skill identification, team-building tools, skill-based search and workflow-integrated insights.
Key Features of Microsoft People Skills
These updates enhance talent discovery and support personalized development. Leaders can build flexible, skills-based teams while employees can connect with colleagues having specific expertise. Key features include:
- AI-powered skill inference from Microsoft 365 data.
- Integration with LinkedIn's 16,000+ skill taxonomy, customizable per organization.
- Skill visibility in Copilot Chat, Outlook, Teams and Viva.
- Organization-wide workforce insights for leaders.
- Skills Agent for team building, career paths and learning guidance.
- User control over visibility and data privacy.
By embedding skills intelligence into everyday tools, People Skills moves beyond traditional HR systems, helping manage personalized development, supporting internal mobility and driving other data-informed talent decisions.
Beyond Traditional Skill Assessment
Traditional HR tech systems rely on employee self-assessments, manager input or formal evaluations to map skills. These approaches provide structured insights but often fail to capture new things employees have learned, Shiran Danoch, founder and CEO of Informed Decisions, told Reworked.
Microsoft takes a different approach with People Skills. Instead of waiting for self-reports, it infers skills by analyzing real-time behavioral signals — such as how employees use Microsoft 365 tools like Outlook, Teams and Word.
The Need for Dynamic Skill Taxonomies
Danoch also emphasized the need to rethink how organizations define and track skills. Static taxonomies no longer serve fast-moving environments, she said. Instead, companies must adopt dynamic, AI-driven models.
"In a world where skills needs shift rapidly — driven by technology, market demands and even changes in workplace language — static, one-time-built taxonomies quickly become outdated," she said.
Organizations must update their taxonomies regularly with live data: recent job postings, internal workforce trends, emerging role requirements and labor market shifts. AI helps by identifying new skills, mapping related competencies, clustering similar concepts and retiring outdated terms.
"Ultimately, a customizable taxonomy isn't just about labeling skills — it's about enabling better decision-making: who to hire, how to develop and where to grow," Danoch says. "And that requires constant adaptation.”
Enhancing Leadership Visibility Into Team Skills
Many leaders don’t know what skills their teams actually have. They often base decisions about hiring, development and mobility on resumes, tenure or anecdotal impressions.
Microsoft aims to change that by analyzing how employees use Microsoft 365 tools to reveal capabilities organizations may never have captured formally.
This skills inference model helps leaders:
- Find hidden talent and match employees to stretch roles or projects.
- Spot adjacent or emerging skills that help employees get new jobs within the company.
- Personalize development conversations with real data.
- Present employees with visible, attainable career paths.
- Build more balanced teams by seeing cross-functional skill sets.
Microsoft's Competitive Advantage
Microsoft holds an advantage here, according to Dani Johnson, co-founder and principal analyst at RedThread Research. "Because Microsoft owns the platforms where work actually happens — Teams, Outlook, LinkedIn and more — it can observe work activity directly and infer skills from those signals without needing external integrations," she explained.
While other systems infer skills by connecting to third-party data sources, Johnson pointed out that Microsoft's approach means its data streams and inference engine are built into the same ecosystem, providing an edge in accuracy, scalability and real-time insight.
"We're still early, but there is likely significant potential. At a fundamental level, better data enables better decisions," Johnson said. "If Microsoft can deliver high-quality inferred skills data without requiring a heavy lift from organizations, it gives leaders a clearer picture of what employees know, what they can do, where they might go and what they're interested in."
The Downsides of a Walled Ecosystem
That said, the product has some downsides. Mainly, as much as Microsoft might like it to be so, the company’s products aren’t everywhere.
"This works for now — a single system where all the data is stored is great — but it doesn't account for work happening outside of Microsoft,” Johnson said. “Again, this is true for now."
It also isn’t clear just how deep an employee’s skill level might go. "Inference isn't the same as assessment. It can reveal patterns of activity, but not the level of mastery or effectiveness," Danoch said. "And because it depends heavily on the Microsoft ecosystem, skills used on other platforms — or soft skills like leadership — may be underrepresented."
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Even so, skill inference offers a powerful signal. Organizations should view it as one layer of a broader strategy — best used alongside verified assessments and human insights to get a full picture, Johnson said.
The Evolution from ‘Little AI’ to ‘Big AI’
Johnson emphasized the importance of this capability as we shift from "little AI" — tools designed to automate narrow, task-based work — to "big AI," which allows rethinking entire systems for greater efficiency.
"In that context, having a real-time understanding of both the skills within an organization and the work that needs to be done will be key," she said. "That intersection is where AI can help us design and continuously improve smarter, more adaptive systems than we've had before."
She added that another advantage lies in making data useful. Real-time visibility into employee skills helps managers identify talent gaps within their teams.
"This will help organizations figure out how to work differently," Johnson said. "Right now, most work is assigned based on the formal organizational structure. But when you actually understand who has what skills, you can assemble teams dynamically around the work that needs to be done."
Tools like People Skills help find skills across an organization and put them to work more effectively.
"Tools like this will help leaders develop new skills more efficiently and effectively," Johnson added. "If we know exactly which skills people already have, we can offer more personalized development. That way, we're not wasting time on training that's unnecessary, and we can pinpoint skill gaps early and address them proactively."
For Copilot itself, Johnson believes its most valuable contribution is context. "Knowing an individual's — or an organization's — skills provides more than just generic answers," she said. "Increasingly, I think the real secret sauce will be an organization's internal [intellectual property] and data. Tools like this allow companies to leverage that proprietary information in the current context to make smarter, faster decisions — also in the current context."
"People Skills enables leaders to swiftly pinpoint skill shortages, create cross-functional teams rooted in actual expertise rather than assumptions and focus on upskilling in the areas that require improvement the most," Rambarran said. "Utilizing AI suggestions makes team formation guided by data instead of titles."
Microsoft People Skills: Launching May 2025
The company will begin rolling out People Skills, a new data layer within Microsoft 365 Copilot, Microsoft 365 and the Microsoft Viva portfolio, at its Microsoft Build conference, taking place May 19 to May 22. The capability infers skills dynamically based on activity within Microsoft 365 apps.
The Skills Agent will be available in June 2025, enabling creation of skill-based teams and supporting employee discovery of colleagues with relevant expertise.
People Skills provides contextual understanding of the workforce, complementing business context embedded in Copilot.
Editor's Note: Catch up on other trends in the world of employee skills:
- Companies Don't Know Their Own Talent. AI Can Change That — Companies know less about their employees than LinkedIn does. That's a problem.
- How AI Can Help Map Your Talent — Time to ditch the paper org chart. Predicative AI can help you forecast the future needs of your workforce by analyzing the talent you have today.
- How 3 Companies Use Talent Marketplaces to Close the Skills Gap — Skills gaps are real — and only getting bigger. Here are three companies investing in internal talent marketplaces to close the gap.