There’s a New KPI in Town – Skills Density
Retailers and consumer goods companies are slowly getting the message that upskilling and reskilling their workforces is one of their most important priorities with the pending impact of AI on them. This coincides with the recognition that skills are more important than qualifications.
There is a new KPI in town that you may not be familiar with. It’s called Skills Density. Simply stated it is the number of skills there are in your workforce divided by the theoretical number you need. It can be expressed as a number or a percentage, and it should be tracked over time.
Skills Density is a key measure of how well your talent development strategy is working.
How to Calculate It (An Example)
Let’s look at Merchandise Planners to see how this works in practice:
• Step 1: Identify Key Skills. Review the job description and list the core competencies required (both technical merchandising skills and soft skills like critical thinking). Let’s assume that number is 15.
• Step 2: Forecast Your Headcount. Determine how many planners you need this year, accounting for promotions, retirees, and turnover. Let's say you need 20 planners.
• Step 3: Find Your Target Number. Multiply the skills one planner needs by your total forecasted headcount. The total skills you need for this role this year is therefore is 15 x 20 = 300
• Step 4: Audit Current Skills. Have senior merchandising management review the team to count how many of those 15 skills each person currently possesses. If the average is 9 skills per person, your current total is 180.The Result: Your current Skills Density is 180 / 300, or 60%.
Now, ask yourself: How much could you increase your full-price sales and achieved gross margin if your upskilling initiatives pushed that 60% to 70% this season—and 80% next year?
Replicating this process for every role in your Buying and Merchandising department is the secret to building a highly productive, future-proof workforce plan.
For more insights on workforce planning and achieving your ROI, download our summary paper: Upskilling and Reskilling in a World with AI. If you find it valuable, contact us for the full version—a complete blueprint, free for retailers.
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Posted by Brian Hume
18th June 2026
