Per Gym level (see upgrade level) you get three skill points. Free skill points are shown on the red flag, on the left of the menu where the training symbol is.

You can distribute skill points to every unit you have already unlocked. Every unit has three skills you can improve with by using skill points:

Damage (increase damage to your opponents), health (higher health during the battle) and healing (resurrection after a fight). Each skill can be improved by up to 25% with spending skill points.

Confirm your distribution by clicking on “save”. You are able to reset your skill points at any time. You will then be able to distribute them again.