Everything You Need To Know About Skill Gap Analysis

The need for organizations to reskill and upskill their staff is growing, making the skills gap analysis even more crucial. A skills gap, talent gap, or talent shortage is the difference between the talents of your workforce and the capabilities your employees need to meet your company’s goals.

A skills-gap analysis can be an essential part of your toolkit as an HR professional. It enables you to spot talent shortages before they significantly affect how your company operates.

This article will outline skills-gap analysis and discuss its benefits, necessity, essential steps, and best practices.

What is Skill Gap Analysis?

Skills gap analysis is a strategic approach for locating and filling skills gaps in your workforce. It is a specially created tool that calculates the difference between your company’s desired and actual skill levels. This gives you the precise information you need to make critical business decisions. The examination of skills gaps is now an essential component of workforce planning. It can significantly impact leadership planning, upskilling or reskilling, promotion choices, and training and development programs.

A skills gap analysis is required to create a successful training plan since it looks at employees’ current and desired skill levels. 

Why Is a Skill Gap Analysis Helpful?

According to the World Economic Forum’s 2018 The Future of Jobs Report, To maintain or improve their skills, 54% of all workers will need to do so by 2022. This is a result of the accelerating digitization and technological advancements that impact our personal and professional lives.

Automation will destroy certain occupations for enterprises in all industries. In contrast, others may change their principal functions and responsibilities. This is where job redesign, or reorganizing these tasks and duties to conform to the changing nature of work, has significance.

Before you start redesigning positions, you must determine which knowledge and abilities are currently lacking in your staff. And the clarity of those capabilities that are essential for the smooth operation of your business.

Let us discuss the advantages of performing a skills gap analysis:

1. It provides you with details about your entire team

People have both strengths and weaknesses. Even though your marketing group is well-versed in communication, one team member might be a superior editor, and another might be a design expert. Both employees with (important) skill shortages and those who are highly educated about particular sectors of the firm will be apparent through skill gap analysis.

You’ll be able to concentrate (training) resources on the skills that require the most improvement. As a result of making the best use of its resources, the team’s total performance will improve.

2. It promotes personal growth and learning

Employees might not always express the need for more training if they believe they are deficient in a certain skill. Employees can desire extra training in a certain area but feel their employer is not providing it. They eventually become irate and even “check out” mentally. They then seek a company that is more interested in their career trajectory.

Therefore, it’s crucial to analyze the skills gaps among staff. This will determine a customized development plan for each employee. Additionally, you want to give each of your employees the skills they need to succeed.

3. It will help you with your strategic workforce planning

Your employees’ existing talents and the elements they need can help you build your talent plan.

A clear understanding of individual skills who can do what and where to put them will help you retain your competitive edge faster by fostering an enthusiastic and engaged workforce.

You can develop a talent assessment strategy for what each employee needs to do to enhance performance and boost productivity using the results of your skills-gap study.

4. It can improve your recruitment efforts

Your hiring efforts will be aided by carrying out a skills-gap analysis. If you can describe those needs, you can more easily find people who have the skills you require but are currently lacking in your organization.

Doing this may hasten the onboarding process, lower your attrition rates, and immediately cut your hiring and training costs.

5. It creates a competitive advantage

Use a combination of all the discussed tactics. You can create a competitive advantage and stay one step ahead of your competitors. Knowing the strengths and weaknesses of your staff will help you plan for hiring, training, and growth, which will increase your company’s performance.

Doing a skills-gap assessment has several advantages and will benefit your entire company.

How to Perform a Skills Gap Analysis: A Step-By-Step Guide

Let’s look at how to conduct a skills-gap study.

In this part, you may discover a step-by-step tutorial on how to analyze your workforce’s talents.

1. Scope and diagnostics  

The first stage’s objective is to define the challenge. This refers to determining the requisite skills in a skills gap analysis context.

To ascertain the skills the organization needs both now, and in the future, you must first ask specific questions and acquire replies. 

As an example:

• What is the organization’s goal?
• What are the business goals of the company?
• What fundamental skills are necessary to carry out the purpose and accomplish the company goals?

The following criteria are used to determine if a skill is critical or non-critical. A skill is non-critical if an employee is unable to do a task but succeeds in doing so. On the other side, if a worker completes a given task but the results are subpar, a critical skill is missing.

2. Define medium and long-term objectives with the help of your leadership

In light of those mentioned above, you should include your stakeholders in the process of deciding what your company’s goals are.

They will be the ones who are most knowledgeable about the long and short-term goals they have for the organization, whether it be greater productivity, more sales, or lower total costs.

The management of your company will also have superior insights into current and future trends to impart to you. Your examination of the skills gaps will flow more naturally with this knowledge.

You should find out the following information regarding the future abilities required by your company and industry:

• Which job titles are most likely to be (partially) automated in your company or industry?
• Which skills are now in demand in your industry?
• What (new) job categories will your company need more of?

3. Determine whether you are proceeding with an individual or team assessment 

Organizations often undertake a skills-gap analysis on two levels: the individual and the team/company.

You can evaluate a worker’s suitability for carrying out specific activities and whether or not they have the required abilities on a personal level.

You can decide whether or not your team as a whole holds the necessary knowledge to finish a project and whether you’ll need to hire outside support on a team or business level.

Ideally, you should conduct both of these studies because they shed light on the skill levels of specific individuals and the team. Knowing this enables you to tailor training for groups and individuals without imposing a standard set of guidelines.

4. Identify the skills you need to achieve these goals.

Once you’ve decided and clearly understood what needs to be done, you may determine what skills are required to achieve your business goals. There are several ways to accomplish this.

Consider the skills your employees already have and those they will need to succeed in their jobs in the future. Think about the current job descriptions, corporate values, and the previously mentioned business goals.

Include team members in the process by asking them what skills they feel they are lacking. Your organization can also conduct a skills test to identify the level of skill each team member possess. The team members will feel invested in the company’s change, which will boost morale in addition to being helpful for your research on the skills gaps.

Following the listing, you can classify the desired skills as basic, intermediate, or advanced. This scale-making technique allows you to evaluate the expertise of both specific individuals and entire teams.

5. Data collection and analysis

The next step is data collection and analysis. The goals of this phase are to assess the work currently being done, prioritize its importance, and identify the skills required to carry it out efficiently. Possible data gathering and analysis tasks for a skills gap study comprise:

Developing job profiles and identifying critical skills needed for each job role

• Examine current job descriptions to identify future requirements.
• Consider how impending (regulatory) changes and upcoming work trends will affect the work.
• Make an effort to create a list of competencies that best explains what is required to perform the work.

Creating an inventory of your employees’ current skills

A few ways through which you can create an inventory of your employee’s skills are:

• Study Position descriptions
• Study Job class specifications
• Performance evaluations and employee assessments 
• Interviews/focus group meetings with supervisors, managers, and employees  

Identifying your employees’ competencies and skill levels 

• Create a single, searchable database using the data gathered from competency evaluations.
• HR technology can assist you with numerous aspects of this by creating a crosswalk with the requisite critical abilities for the present and the future. It quickly becomes impractical to manually keep track of every employee’s competencies and ability levels, particularly when your firm is considered medium or large.

For instance, a talent management system can be that single, searchable database that compiles all the data from your employees’ competency evaluations and performance reviews.

6. Measure skills internally

There are several ways to measure skill levels in your organization. Some of them are:

To evaluate employees’ talents objectively, use skills tests

The best way to assess your employees’ skills is to conduct a skills test. Testlify has a collection of easy-to-use tests that examine personality traits, linguistic ability, soft and hard skills, and cultural fit.

These assessments, which subject-matter experts developed, will give you excellent, objective information on a person’s degree of aptitude.

Want to know how skill tests can help you find the right candidate for your job? Click here.

Use a personal SWOT analysis. 

Companies use the SWOT analysis to determine how competitive they are in their market and to develop a framework for strategic planning.

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is a useful tool that can give organizations fresh perspectives, insight into what they are doing right and poorly, and alertness to warning indications.

Use a 360-degree evaluation.

As you will be assessing individuals’ talents internally, you should solicit comments from the workforce. By requesting performance feedback from the following people, you can acquire what is known as a 360-degree assessment or evaluation:

• Clients
• Team Leaders
• Management
• Subordinates

Once you have a sufficient amount of information, you may create a detailed picture of a worker’s knowledge and abilities, which you can use to organize their forthcoming training.

Identify skills gaps

You can obtain all the required information by utilizing one of the methods mentioned above or by combining them. Finding skill gaps requires looking over the information gathered in the following step.

You might want to create a grading scale to determine the proficiency levels of particular employees, perhaps from 1 (poor) to 10. (excellent). Once you’ve finished, you’ll be equipped to bridge the gap between your current skill level and your future goals.

You can do this by providing coaching, training, hiring new staff, or hiring independent contractors.

7. Designing interventions 

This phase creates an intervention that meets the organization’s needs. You may develop a strategy to best fill these gaps once you’ve identified where the talent gaps are in your firm.

There are several “interventions” you can do, depending on the talents you’re lacking and the capabilities of your current workforce:

Training and development of existing employees 

Your skills gap analysis findings may influence the creation of learning and development initiatives that will retrain your staff in the outdated or lacking abilities.

Job redesign

Inquiries into the mission, business goals, and the abilities needed to achieve those goals – both now and in the future – may lead to changes in the duties and responsibilities of particular vocations. This is what we mean by “job redesign,” which may also result in people receiving new training in skills that have become important.

Recruitment of people with critical skills

Your skills gap study findings will probably alter the standards by which candidates are hired. Because even if you can retrain or upgrade your present employees, you will eventually need to hire new employees (due to employees leaving or retiring).

It will save you time to hire someone with the necessary expertise directly rather than having to train them. Additionally, it will hasten their operational and productive transition. You can tap into the contingent workforce and engage a freelancer or contractor to help you (temporarily) fill a skills gap if you can’t find people quickly enough.

8. Conduct a skills-gap study regularly

Although it seems difficult initially, you will develop a process necessary to undertake skills-gap analysis more frequently.

This will provide you with a competitive edge. Ensuring that you are always at the top of your game, know how your company’s skills and knowledge have changed, and know which staff requires additional training.

To streamline the process, you should construct a template that you can use each time you wish to conduct a skills-gap study. Additionally, you may automate it by sending staff surveys through email every three or six months to maintain a steady data supply.

Final Thoughts

It is imperative to know what skills and competencies your personnel hold. A skills gap analysis is a helpful tool. When carried out correctly, it gives you meaningful information about your entire staff, supports strategic personnel planning, and improves recruitment efforts. Using an effective skills gap analysis, you can customize your learning and development programs to reskill your personnel where necessary.