Microsoft has taken a bold step into the evolution of workplace technology with the launch of People Skills – a new agentic AI capability designed to transform skills management. Announced last week, People Skills is now part of Copilot, Microsoft 365 and the Viva suite.
This new data layer builds on the former Viva Skills feature and introduces a smarter, more integrated way to understand and manage workforce capabilities. Its potential impact on the HR tech space is profound, positioning Microsoft as a serious contender in a market long dominated by traditional HR platforms.
At its core, People Skills enables Copilot and the Skills agent to better understand an organisation’s most valuable asset — its people. By drawing from rich data sources across Microsoft 365, the platform can now map and interpret employees’ skill sets with a high level of accuracy.
This means HR teams can gain a clearer, more dynamic picture of their workforce, allowing them to identify skill gaps, find internal experts, and support targeted development plans. It’s a timely innovation in an era where skills intelligence is fast becoming central to workforce strategy.
What makes this especially disruptive is the automation and integration at play. The Skills agent continuously identifies and monitors employee skills in real-time — with no need for manual updates or third-party tools. The result is a modern, AI-powered foundation for skills management that rivals and potentially replaces the need for standalone HR tech solutions.
Microsoft People Skills infers individuals’ skill sets derived from the user profile and their activity. This is then mapped to a customisable built-in skill taxonomy. This data layer supports the Skills agent and enriches Copilot Chat, Microsoft 365, and Viva services by providing contextual information about individuals within your organisation.
For organisations that also use LinkedIn, there’s an added bonus: employees can sync their LinkedIn skills and profiles with the internal profiles, creating a seamless skill identity across both platforms.
Microsoft’s introduction of People Skills and the Skills agent represents a major shift in how organisations approach talent management. By embedding real-time skills intelligence into Microsoft 365, Microsoft is redefining how companies can identify, develop and mobilise their talent, using tools they already rely on.
This move directly challenges traditional HR technology providers such as Workday and Oracle. Unlike these systems, which often exist in silos and depend on separate logins, data connectors, and workflows, Microsoft’s approach is fully integrated. It brings skills data into the daily flow of work – removing barriers between talent intelligence and productivity.
To support business leaders and HR analysts, Microsoft has also introduced a Skills landscape report through Copilot Analytics. This report provides detailed insights into workforce skills and allows users to customise the view based on teams or business functions. These reports can also be exported for deeper, tailored analysis.
Starting in June 2025, the Skills landscape report will be available in Viva Insights and will include four key reporting pages. These tools are designed to help organisations track progress and identify skill gaps across the business.
Microsoft’s shift into HR integration marks a foundational shift toward truly intelligent workforce management. By making skills data actionable, accessible and constantly evolving, Microsoft is poised to lead a new era in HR tech. Organisations that embrace this innovation early will be better positioned to adapt, compete and thrive in a talent-first future.
If you’re looking to maximise your investment in the Microsoft 365 platform and require some guidance, our Microsoft MVPs are ready to help.
