In the evolving world of human capital management, Microsoft has quietly unveiled a game-changing initiative, Microsoft People Skills. Soon to escape preview, this new service reimagines how organizations understand and nurture employee skills using the power of AI. It signals a significant shift from traditional HR technologies on the market today.
For years, organizations have relied on self-reported data or manager assessments to gauge employee skills. These imperfect methods are riddled with subjectivity. Microsoft People Skills upends this model by leveraging the everyday digital exhaust from tools operating within the Microsoft 365 ecosystem. From meetings and email to project contributions, People Skills infers employee strengths and growth areas based on actual work patterns. Surveys or résumés are so last week. This contextual, AI-driven skills mapping is unlike anything the market has seen.
“Most tools rely on self-reporting or leader perception. Microsoft People Skills actively uncovers skills through daily employee activities. I don’t know of another product that has accomplished this.”
At its core, People Skills sits adjacent to Microsoft’s broader investment in Viva and the employee experience. However, where Viva offers a holistic engagement platform centered around communication, learning, and wellbeing, People Skills is hyper-focused on building a skills-based culture. It enables organizations to track real-time growth, identify areas where employees struggle, and tailor career paths based on dynamic, inferred capabilities.
“The biggest challenge is informing users that this collection is happening and providing them instructions on how to opt out.”
This offers powerful potential for assembling teams. Managers can use the Skills agent, an AI-driven tool that surfaces real-time skill insights, to construct agile, high-performing teams based on the actual technical and behavioral competencies of employees. There’s even room to explore integrating personality assessments, potentially creating teams not just by skill but by team dynamics and culture fit.
That said, any tool driven by passive data collection must also address concerns around privacy and transparency. Microsoft has anticipated this challenge. People Skills includes robust privacy and visibility controls at the user, group, and tenant level. Employees can opt out of skills inferencing or visibility features via their Microsoft 365 profile, though doing so depends on their awareness and understanding of these capabilities.
Beyond visibility, People Skills has broad implications for internal mobility and workforce development. Managers gain access to a clearer picture of employee capabilities, including “hidden” skills that may not have appeared through their daily interactions. This insight enables better alignment between employee passions and project opportunities, as well as targeted upskilling paths supported by mentorship and learning interventions.
However, trust remains a critical factor. Like all AI-driven systems, the accuracy and fairness of inferred skills raise important questions. Microsoft has not yet shared deep insights into how these inferences are validated, nor what safeguards exist against algorithmic bias.
“With everything in AI, we should be wary of bias and think critically about how we validate these models.”
For organizations planning to adopt People Skills, change management and communication are paramount. Rolling out such a system without clear messaging could be misinterpreted as surveillance, undermining trust and potentially slowing the broader adoption of Microsoft’s Copilot and other AI initiatives.
Looking ahead, People Skills could be one of the most transformative HR technologies in the enterprise space—if organizations choose to act on the insights it provides. It offers the opportunity to reinvigorate engagement, drive targeted development, and create highly adaptable teams. But it will require more than dashboards and data. It demands a culture of action.
“Organizations have to act on these insights and not let them become noise that the influx of data throws at leaders every day.”
Microsoft People Skills is more than another HR tool. It’s a signal of where enterprise AI is headed: embedded, context-aware, and designed to augment people development at scale. If used intentionally, it could shift how companies think about talent, agility, and growth in the AI era.
Image Courtesy of Unsplash (Annie Splatt)