What is skill gap analysis?

A skill gap analysis is a process for identifying the disparity between the skills your workforce currently possesses and the skills needed to achieve organizational objectives. In this process, you develop a plan to fill this gap by offering training programs to your employees or hiring new staff.

Here, you evaluate the competencies, knowledge, and experience of your employees in relation to desired skills and competencies. Once discrepancies are identified, you can develop targeted strategies to bridge this gap.

What are the benefits of doing a skill gap analysis?

Now, you may be wondering, "Why should I conduct a skill gap analysis?" The truth is, that there are numerous benefits to skill gap analysis. Let me list some of them for you.

• It boosts learning & development for employees: The analysis unveils fresh learning and development goals for individual contributors. It sheds light on extra skills needed for their current roles and highlights the competencies necessary for potential future promotions. By pinpointing these areas, employees can proactively pursue opportunities for growth and development, ultimately enhancing their value within the organization and aligning themselves more closely with its strategic objectives.
• It provides insight into staff's expertise: Performing a skills gap analysis helps identify team members who excel in specific skills and find the best roles for them. Understanding the different skill levels among employees also helps you pinpoint areas for improvement and direct efforts effectively.
• It gains a competitive advantage: Closing skill gaps ensures that employees possess the necessary expertise to remain competitive and adapt to market changes effectively. This not only enhances the organization's capability to meet present demands but also positions it for future success.
• It gains a competitive advantage: Closing skill gaps ensures that employees possess the necessary expertise to remain competitive and adapt to market changes effectively. This not only enhances the organization's capability to meet present demands but also positions it for future success.
• It serves as a foundation for planning: Performing a skills gap analysis can provide valuable insights to businesses, revealing not just whether employees' skills align with current business requirements, but also indicating potential training needs to prepare them for future changes. Substantial disparities in skills may necessitate adjustments in hiring practices or the setting of objectives for future workforce planning initiatives.
• It serves as a foundation for planning: Performing a skills gap analysis can provide valuable insights to businesses, revealing not just whether employees' skills align with current business requirements, but also indicating potential training needs to prepare them for future changes. Substantial disparities in skills may necessitate adjustments in hiring practices or the setting of objectives for future workforce planning initiatives.
• It enhances productivity: Enhanced productivity naturally follows when employees possess the requisite skills to fulfil their roles effectively. Conducting a skill gap analysis enables you to optimize your workforce and allocate resources more efficiently. Consequently, this leads to heightened productivity levels, as employees can execute tasks with increased competence and efficiency.

How to conduct a skill gap analysis?

Now that you understand a skill gap analysis and its benefits, let's explore how to conduct one. If you're planning to conduct one, follow these four steps below to systematically assess your employees' current skills.

Compare them to the skills required to achieve organizational objectives and develop targeted strategies to bridge any gaps.

Step 1: Plan on which level the skill gap analysis occurs

A skill gap analysis can occur at two levels, and you can choose to undertake one or both simultaneously.

• Individual: This involves identifying the skills required for a particular job and comparing them to the skills currently possessed by the employee.
• Team/company: This entails adopting a broader perspective on the skills required to work effectively on a project or lead the team or company. This analysis aids in targeting employee training programs to develop the necessary skills.

During this stage, it's crucial to determine which stakeholders will participate in the skill gap analysis. This can ensure that the right insights are gained and that the resulting action plans have broad support within the organization.

Step 2: Identity skills needed to achieve the goals

To determine which skills are crucial and which ones are not, consider your company’s business goals for the upcoming years and identify the skills required to achieve these objectives. Ask yourself questions such as:

• What skills do your employees need to do their jobs efficiently?
• Are there employees lacking skills that are critical to their job role?
• What specific skills does your company need in order to achieve those business objectives?
• Which of your positions could end up being automated by new technologies?

Step 3: Identify current skills

Now that you've identified the skills employees require, your next step is to assess the skills your employees already possess. This is crucial for understanding the current capabilities of both your employees and your company. There are several methods to accomplish this:

• Interviews with employees.
• Performance reviews include 360-degree feedback, which is an evaluation system where employees receive anonymous feedback from their peers and colleagues in the workplace.
• Surveys and assessments.
• KPI contributions.

Oh, before I forget, it’s best to track the results of these tools in a spreadsheet for easy comparison. This has already saved me a lot of time!

Step 4: Close the skill gaps

Now that you have identified both your current skills and the skills required, the next step is to compare the two. This comparison enables you to identify the skill gap.

With all the necessary information at hand, you can now take action to narrow the skills gap. There are two primary approaches: training existing staff or hiring new employees. It's advisable not to attempt to close all gaps simultaneously. Instead, prioritize specific gaps and determine the most effective method for addressing them before moving on to others.

The decision on how and when to close a gap depends on factors such as the urgency of acquiring that competency, your budget constraints, and the time required to upskill existing employees.

Training existing employees often emerges as the optimal choice due to its efficiency. Not only is it more budget-friendly, but it also keeps employees motivated and engaged. This was also highlighted by the speaker in the previous blog by Vincent Delbaere on internal mobility, career management, and talent development.

When should you conduct a skills gap analysis?

Ideally, you should conduct a skills gap analysis once a year to ensure alignment with evolving industry demands and workforce capabilities.

It is important that you conduct a skills gap analysis when:

• There is going to be a change to your business strategy, model, or organizational structure.
• There are drastic changes in the economy that may impact your business.
• You’re implementing new technologies.
• You’re struggling to achieve its business objectives.

What tools or software could be used to conduct a skills gap analysis?

You have various resources available to conduct a comprehensive skills gap analysis, including a range of tools and software specifically designed to streamline the process and improve efficiency. Here are some examples:

• Skill assessment platforms: Platforms such as ProProfs and Mettl provide comprehensive tools for evaluating and analyzing employee skills. Through detailed skill assessments, you can identify existing skill gaps and develop tailored training plans to effectively address them. These platforms play a crucial role in aligning employee skills with organizational goals and promoting continuous professional development.
• Learning Management Systems (LMS): Examples like Moodle, Blackboard, and Canvas are robust platforms designed to streamline employee training processes. They facilitate the organization and delivery of courses, as well as efficient tracking of employee progress and skill acquisition. With built-in reporting features, LMS platforms offer valuable insights into employees' skill development over time.
• HR technology: Talent management systems and HR analytics software are essential in modern HR practices. They enable the collection, analysis, and visualization of skills data. These tools empower HR professionals to identify trends, patterns, and potential skill gaps within the workforce. By leveraging insights from skills data, you can make informed decisions regarding talent management strategies, ultimately driving business success.
• Online training platforms: Platforms like Udemy for Business, LinkedIn Learning, and Coursera for Business offer a wide range of online courses to enhance employee skills across various domains. They provide employees with flexibility in accessing courses anytime, anywhere, promoting personalized skill development.

Skill gap analysis to grow your business and its employees

So, skill gap analysis is essential for identifying areas of improvement and growth for both businesses and individuals. By pinpointing disparities between current skills and those needed to achieve objectives, you can develop targeted strategies to bridge these gaps, enhancing productivity, competitiveness, and employee development.

Leveraging tools like skill assessment platforms, learning management systems, HR technology, and online training platforms streamline the process, ensuring alignment with evolving industry demands and workforce capabilities. Regularly conducting skill gap analysis enables you to stay agile and resilient in the face of change.