Skills gap analysis: how to find and close skill gaps

A skills gap analysis compares the skills a role, team or company needs with the skills its people have today, then ranks the gaps so you can decide whether to train, hire, redeploy or redesign roles. HR and talent teams use it to set hiring criteria, aim training budgets and plan the workforce on evidence instead of assumptions.

TL;DR: This guide explains what a skills gap analysis is, why it matters, what causes skills gaps and when to run one. It walks through five steps from scope to action, compares the ways to measure current skills, and shows a worked team example with a copyable template. It ends with how to close the gaps you find, how to tell they are closing, the risks to avoid and the tools that help.

What is a skills gap analysis?

A skills gap analysis is a structured review that measures the difference between the skills an organization needs to hit its goals and the skills its workforce has now. The output is a ranked list of gaps for a person, a team or the whole company, each with a planned fix: train, hire, redeploy or restructure.

A skills gap is the distance between required and actual proficiency in one skill. The analysis is the process that finds those distances across many people and skills and decides which ones matter most.

The method serves two purposes that are easy to mix up:

• In hiring, the gap is defined at role level before a candidate exists. The output is a skills profile that shapes the job description, the screening criteria and the onboarding plan.
• In learning and development (L&D), the gap is measured in current employees. The output is a training plan, a list of people ready to move into new roles, and a short list of roles where the gap is too big to close by training alone.

The need is real. In the LinkedIn 2025 Workplace Learning Report, 49% of L&D and talent professionals agreed that their executives are concerned employees do not have the right skills to execute business strategy.

Why does a skills gap analysis matter?

A skills gap analysis matters because every hiring, training and promotion decision depends on knowing which skills you have and which you lack. Without that data, teams copy old job requirements, buy training people do not need, and discover missing skills only when a project slips or a key person resigns.

Hiring alone will not cover the shortfall. The SHRM 2026 Talent Trends report found that nearly 70% of HR professionals still face challenges recruiting for full-time positions, and 41% now train existing employees for hard-to-fill roles. Knowing exactly where the gaps sit is what makes that training worth the money.

The business outcomes that depend on accurate skills data:

• Hiring precision. Job posts built from a measured gap list the skills that separate strong performers, not legacy requirements. Screening gets sharper and early attrition drops.
• Better L&D spend. Training budgets aimed at measured gaps go to the people and skills that need them, instead of one course for everyone.
• Succession planning. Readiness checks show which high-potential employees are close to a senior role and what each one still needs.
• Workforce planning. Gap data rolled up across teams exposes structural shortfalls that individual coaching cannot fix, pointing to hiring, partnerships or role redesign.
• Retention and engagement. People who see a clear development path, and who work in roles that fit their skills, tend to stay longer.

For a deeper look at the payoffs, see our guide to the benefits of skills gap analysis.

Key takeaway: A skills gap analysis is a risk-management tool, not an HR form. Every mis-hire or misplaced training budget is a cost of running without accurate skills data.

What causes skills gaps?

Skills gaps usually come from change that outpaces learning. New tools and AI change what a role requires faster than job descriptions and training plans are updated. Experienced employees retire or leave and take know-how with them. Growth into new products or markets creates needs nobody on the team has met before.

Other common causes:

• Thin soft-skill development. Communication, leadership and problem-solving are often assumed rather than taught, so gaps build up quietly.
• Hiring on credentials instead of skills. A degree or job title does not prove a person can do the work, so gaps enter through the front door.
• No skills data at all. Many companies cannot say which skills they hold today, so gaps stay invisible until they cause a problem.

When should you run a skills gap analysis?

A skills gap analysis works best as a regular cycle plus event-driven checks. Many organizations run a full review once a year alongside strategic planning, then run smaller, targeted reviews when something changes. Fast-moving functions such as tech, data and digital marketing often need a semi-annual or quarterly check.

Run one outside the annual cycle when:

• A restructure, merger or major organizational change is planned.
• You are entering a new market or launching a new product.
• A new technology or tool is about to roll out, and again after it lands.
• A performance problem looks like it may be a skills problem.
• You are planning to hire or expand a team.

Let the pace of change set the schedule. The aim is to keep the workforce's skills in line with business goals, so the review should happen as often as those skill needs shift.

What are the levels of a skills gap analysis?

A skills gap analysis runs at three levels: individual, team or department, and organization. Each level answers a different question and leads to a different fix, so decide the level before you collect any data. Mixing them is one of the most common reasons a gap report ends up unused.

• Individual. One person's skills against their current role or a target role. The output is a personal development plan with skills to build, resources and a date to reassess. Common in performance reviews, promotion decisions and the first 90 days after onboarding. Employees can also run a personal version for their own career: pick a target role, read several job posts for it, note the skills that repeat, and ask a manager and peers where to focus.
• Team or department. Individual results rolled up to find patterns. If 14 of 20 engineers fall short on system design, that is a structural gap that calls for a team program or targeted hiring, not one-to-one coaching.
• Organization. All business units, usually once a year with strategic planning. It answers questions like "Can we deliver our three-year product roadmap without major external hiring?"

Sports coaches think this way. A coach looks at each player's strengths and weaknesses, then at how the squad fits together, and trains or recruits for the position that is weakest. A business team needs the same two views: the person and the combination.

How do you conduct a skills gap analysis?

You conduct a skills gap analysis in five steps: set the scope and business goal, define the skills each role needs, measure current skills, calculate and prioritize the gaps, and act on them with a plan you reassess. The steps are the same at every level; only the amount of data changes.

Step 1: Set the scope and the business goal

Decide which roles, teams or business units are in scope, and tie the analysis to one business objective: a product launch, a new market, a cost target or a compliance requirement. That link is what turns the analysis into a decision instead of a report.

Useful inputs: the org chart, headcount plans, strategic initiatives and the last 12 months of role performance data. The output is a one-page scope note listing the roles covered, the objective, and the decision the results will inform (hire, train, promote or restructure). Involve team leads and managers here so they own the result.

Step 2: Define the skills each role needs

For each role in scope, build a skills profile with every skill the role needs and the proficiency required. Include technical skills, behavioral skills such as communication and problem-solving, and leadership skills where they apply. Keep the list focused on what the business goal needs; a short list is easier to measure and maintain.

Three inputs give the most accurate profiles:

1. Your strongest performers. Work out what the top 20% of people in the role do differently.
2. Structured interviews with hiring managers using the same questions for every role.
3. Occupational data such as O*NET OnLine, the US government's database of skills, tasks and knowledge by occupation.

Give every skill a target level on a 1 to 5 scale with a short description of each level. A competency framework or competency mapping exercise is a good starting point if you already have one.

Step 3: Measure current skills

Measure what people can do today, using the most objective method the skill allows. This is the step where most analyses lose accuracy, because they rely on self-ratings or a manager's impression. The next section compares the methods.

For technical, functional and analytical skills, standardized skills tests give the cleanest data, because every person answers the same questions under the same conditions and is scored the same way. Testlify's test library has 3,500+ tests across role-specific, software, coding, cognitive, situational judgment and language skills, so scores can map straight onto the 1 to 5 levels from Step 2.

Pro tip: Use self-assessment only to start conversations, never as the main data source for promotions, restructuring or succession. People rate themselves unevenly; anchor high-stakes decisions on tests or work samples and use self-ratings as a second input.

Step 4: Calculate and prioritize the gaps

Gap equals required level minus current level. A positive number is a shortfall; a negative number is capability above what the role needs, which is useful for internal moves. For a team, average the individual gaps per skill and look at the spread as well, since an average can hide a few people with very large gaps.

Rank each gap on two questions: how critical is the skill to the business goal from Step 1, and how large is the gap? Gaps that score high on both are Tier 1 and need action now. The priority matrix below shows the full picture.

Step 5: Act, then reassess

Choose a fix for each Tier 1 and Tier 2 gap, assign an owner and a deadline, and set a reassessment date. The section on closing gaps covers the options. Reassessment closes the loop: without it you cannot prove the fix worked or catch new gaps that opened during the plan. Keep the skills data current between full reviews, so the next cycle starts from fresh numbers instead of last year's.

Which methods measure current skills best?

The best method depends on the skill and the stakes. Skills tests and work samples give the most objective data for technical and functional skills; 360-degree feedback suits behavioral and leadership skills; self-assessment is fast but least reliable. Most teams combine two methods, for example tests for hard skills and 360 feedback for soft skills.

Whatever method you use for promotion or hiring decisions, apply it the same way to everyone and keep it tied to the job. The EEOC guidance on employment tests and selection procedures explains why job-related, consistently applied tests matter for fairness. Testlify's 360-degree feedback test covers the behavioral side alongside skills tests.

How do you prioritize skills gaps?

You prioritize skills gaps by plotting each one on two axes: business impact and gap size. High-impact, large gaps get immediate action; high-impact, small gaps get targeted coaching; low-impact, large gaps get a planned fix later; low-impact, small gaps are simply monitored. The matrix stops teams from spreading budget evenly across every gap.

Two more filters help break ties. First, timing: a skill needed for a launch next quarter beats one needed in two years. Second, spread: a gap shared by most of a team points to a program or a hire, while a gap held by two people points to individual coaching.

What does a skills gap analysis example look like?

A skills gap analysis example makes the steps concrete. Take a SaaS company with 800 employees whose 42 customer success managers (CSMs) are losing enterprise accounts: churn is up 18% year over year despite more headcount. The VP of Customer Success runs a team-level analysis to see whether the cause is skills, process or both.

Scope and goal. 42 CSMs in three regional teams. Goal: find the skills behind the rise in enterprise churn. Decision: targeted training versus selective hiring for next year.

Required skills. Studying the CSMs whose accounts did not churn in 24 months gives six skills and target levels: executive stakeholder communication (4), proactive risk identification (4), product knowledge (4), data analysis and reporting (3), contract negotiation basics (3) and escalation management (3).

Measurement and gaps. All 42 CSMs take skills assessments covering the six skills.

Action. Eleven CSMs account for most of the Tier 1 shortfall. They get an eight-week coaching program; the other 31 get a self-paced track and product refreshers. Proactive risk identification becomes a screening criterion for every future CSM hire, so the gap does not return through new headcount. Reassessment is set for 90 days after the program ends.

The lesson: a measured analysis puts the effort on the specific people and skills where the gap is large and tied to the business problem, instead of a blanket course for all 42.

What should a skills gap analysis template include?

A skills gap analysis template should capture the role, the required skills with target levels, each person's current level, the gap, a priority, the planned action with an owner, and a date to reassess. Using the same template across teams lets you roll results up and compare them over time.

Core parts of a good template:

• Header: role, department, team size, analysis date and the business goal.
• Skills list: grouped as technical, behavioral and leadership.
• Proficiency scale: 1 to 5, with a short description of each level so every rater uses it the same way.
• Required and current columns: side by side, with the source of the current score (test, 360, manager).
• Gap column: required minus current, color-coded: red for 2 or more, amber for 1 to 1.9, green under 1.
• Priority tier and action: train, hire, redeploy or restructure, with an owner and a deadline.
• Reassessment date.

Copy this table into a spreadsheet to start:

Spreadsheets work for small teams. Past roughly 20 people, a skills matrix or a skills inventory kept in a dedicated tool saves time and avoids copy errors.

How is a skills gap analysis different for hiring and for L&D?

A skills gap analysis for hiring defines the gap before the person exists and measures candidates, while one for L&D measures current employees against current or future roles. The five steps are the same, but the output, the decision and the measurement tools differ, so run them as two related exercises rather than one generic process.

Hiring. The output is a candidate skills profile that drives the job description, the screening tests and the onboarding plan. Measurement happens during selection through pre-hire assessments, not employee surveys. When the screening tests mirror the gap you measured inside the team, new hires arrive closer to the level the role needs. This is the core idea behind skills-based hiring.

L&D. The output is a prioritized training plan, often split by team and seniority, plus a list of roles where the gap is too large to train. Measurement combines skills tests for technical skills with 360 feedback for behavioral ones. Pair the results with a learning and development plan so each gap has a matching learning path.

How do you close skills gaps once you find them?

You close skills gaps with four main moves: train the people you have, move people who already have the skill, hire for it, or redesign the role so the gap stops mattering. Gap size, urgency and how widely the gap is spread decide which move fits each gap. Most plans use a mix.

• Train (build). Best when many people sit just below the target level and the skill can be taught. Use courses, workshops, certifications and on-the-job training, designed around the measured gap rather than generic content. See our upskilling guide for formats.
• Redeploy (move). When the skill already exists elsewhere in the company, an internal move is faster and cheaper than an external hire. Internal moves are rising: LinkedIn Global Talent Trends reported internal mobility up 6% year over year in 2024. A skills inventory built from assessment data makes that hidden talent visible; read more on internal mobility.
• Hire (buy). Best for specialized, urgent Tier 1 gaps with no internal candidate close to ready. Write the job post and screening tests from the gap so you hire the missing skill, not a credential. Contractors or partners can cover a short-term need while you build the skill inside.
• Redesign (restructure). If the same gap shows up cycle after cycle, the role may be the problem. Split responsibilities or create a specialist role. Our piece on why not every skills gap needs a headcount covers this option.

Training sticks better with support around it:

• Mentoring and coaching. Pair less experienced people with those who have the skill. Like a sports coach working on one technique at a time, a mentor gives fast, specific feedback that courses cannot.
• Learning by doing. Stretch assignments, job shadowing, simulations and practice projects let people apply a new skill in a safe setting before it counts. Athletes improve through practice and game time; employees need the equivalent.
• Partnerships with schools and colleges. Internships and apprenticeships build a pipeline for skills that are scarce in the market.
• A learning culture. Learning budgets, protected time for study and recognition for new skills keep development going after the formal program ends.

Focus pays off. One founder interviewed for an earlier Testlify article described picking the ten most important skills in the company, finding the employees who already had them, and promoting those people into new responsibilities, which closed gaps and kept top performers motivated at the same time.

Which models help with skills gap analysis?

Several established models help structure a skills gap analysis and the training that follows. A competency model defines what good looks like in each role, people analytics supplies the data, ADDIE designs the training, and Kirkpatrick's four levels check whether it worked. McKinsey's 7-S framework places skills in the wider organization.

You do not need all of them. A competency model plus a simple training evaluation covers most team-level analyses.

How do you know the skills gap is closing?

You know a skills gap is closing when reassessment scores rise toward target levels and the business measures tied to the gap improve. Agree on those measures before any training or hiring starts, so you can compare before and after instead of judging success by course completions.

Indicators to track as key performance indicators:

• Skill scores. Retest the same skills with the same method; the gap column should shrink.
• Performance. Output, quality, error rates or sales results for the teams involved.
• Engagement and retention. People who feel capable and see growth tend to stay; watch voluntary turnover.
• Business goals. Is the product launch, market entry or churn target from Step 1 on track?
• Customer feedback. Better service quality shows up in satisfaction scores and renewals.
• Hiring costs. When internal moves and training cover more needs, external hiring and agency spend fall.

Career support is part of the picture. The same LinkedIn report found only 15% of employees said their manager had helped them build a career plan in the past six months, so a gap plan that includes manager check-ins stands out.

What are the risks of a skills gap analysis?

The main risks of a skills gap analysis are inaccurate measurement, business needs changing faster than the plan, rising costs, unintended side effects and leaning too hard on hiring. Each one can be managed with clear methods, honest communication and regular reassessment.

• Inaccurate assessment. Flawed methods put people in the wrong training or lead managers to hire the wrong profile. Use objective tests where possible and check results with managers.
• Changing business needs. In fast-moving industries, required skills can shift before the plan finishes. Shorter review cycles and a focused skills list reduce the risk.
• Spiraling costs. Training, upskilling and hiring add up. Check the return on each fix, counting softer returns such as keeping key staff.
• Unintended consequences. Over-focusing on a few skills can open new gaps elsewhere, and some employees may feel their current skills are undervalued. Show appreciation for existing strengths and explain what the training offers them.
• Over-reliance on hiring. Filling every gap from outside is expensive, can unsettle team culture and leaves existing staff feeling passed over.

Other blockers are resistance to change, tight budgets, lack of time and weak leadership buy-in. Involve employees from the start, share why the analysis is happening, and get a senior sponsor before you collect any data.

How is AI changing skills gap analysis?

AI is shifting skills gap analysis from a once-a-year audit to a continuous process. Assessment platforms can now draft role-specific tests from a job description, suggest the skills and scoring criteria a role needs, and update skills profiles each time someone completes an assessment, so gaps surface in weeks rather than at the next annual review.

Three practical changes:

• Faster skills profiles. AI suggests the competencies for a role, which cuts the time Step 2 takes. A person still needs to review and trim the list.
• Continuous measurement. Short, repeatable assessments keep skills data fresh between full reviews.
• Personalized fixes. Gap data can drive individual learning paths instead of one program for everyone.

Keep a human in the loop. AI suggestions follow the inputs you give them, so vague role definitions produce vague skills lists.

What tools support a skills gap analysis?

The tools that support a skills gap analysis fall into five groups: skills assessment platforms for objective measurement, performance management systems for behavioral data, learning platforms that tag content to skills, HRIS skills modules that store the results, and spreadsheets for small teams. Most companies combine a measurement tool with their existing HR system.

• Skills assessment platforms test employees or candidates and score them against role benchmarks. Look at test library depth, question types, reporting and ATS or HRIS integrations.
• Performance management systems collect manager and peer feedback over time. Useful for behavioral skills, best used next to objective tests.
• Learning management systems with skills tagging link courses to skills. They show what training was taken, not what skill was gained.
• HRIS skills modules store and report skills data, but depend on good data fed in from assessments.
• Spreadsheets are fine for 20 people or fewer.

For a detailed comparison, see our list of skills gap analysis tools.

How can Testlify help with a skills gap analysis?

Testlify gives HR and L&D teams the objective measurement layer a skills gap analysis needs. You can test current employees and candidates on the same skills, compare scores against the levels each role requires, and act on the gaps without building tests from scratch.

• 3,500+ ready-made tests for role-specific, software, coding, cognitive, situational judgment, personality and language skills, plus 25+ question types for custom tasks. Browse them in the skills assessment platform overview.
• AI test builder that turns a job description into a role-specific assessment and suggests competencies and scoring criteria.
• Per-skill scoring and benchmarking, with AI candidate insights, weighted scores and CSV or PDF export, so results drop straight into your gap template. See reporting and analytics.
• 100+ ATS and HRIS integrations, including Workday, SAP SuccessFactors, BambooHR and Greenhouse, so skills data sits next to role and team data.
• 20+ proctoring checks and assessments in 15+ languages, so results hold up for global and remote teams.

More than 1,500 talent teams use Testlify. To see how it fits your own analysis, read how Testlify assessments identify skills gaps or book a demo.

What are the most frequently asked questions about skills gap analysis?

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