How To Make The Most of Skill Gap Analysis

Your business needs constant changes. Roles in an organization must evolve as well, and therefore, employees’ skillset development needs to be kept up. Does your L&D team still not have any advanced plan for proactively preparing the workforce to meet that demand? If the answer is yes, it’s high time you should conduct a skill gap analysis to get started right away. 

What is a skill gap analysis?

Skill gap analysis is an assessment that identifies the current skills of employees and the required skills of an organization. These help you uncover differences or gaps between the two, which lead to the training,  or even hiring, needs. 

When to conduct a skill gap analysis?

Usually, a skill gap analysis is in need when there is a performance review or a change in an employee’s duties. It shows the level of employees’ knowledge and skills, and how their skills should be in the future. With an adequate analysis, you can set a suitable career development roadmap for each employee within an organization. 

Skill gap analysis is also useful for post-training evaluation. It helps you to plan proper training programs, as well as prove how your employees improve after the training.

Besides, many organizations conduct skill gap analysis as a regular process, along with one-off events. In that way, the L&D team can frequently review and proactively prepare the workforce for future business operations.

Who is involved in skill gap analysis?

It depends on the skill and which employees you need to evaluate. In most cases, the analysis requires the participation of employees, respective team leaders, and even C-suite. 

L&D and HR teams play an organizational role in the whole process. Hiring external consultants or evaluators is also an alternative to free up your overloaded staff if necessary.

Recommend reading:

• 4 Main Learning and Development Roles to Explore (Updated for 2022)

Why is skill gap analysis vital for an organization?

You might think a skill gap analysis is time and cost-consuming at first. But it really pays off with precious insights into workforce development to move your business forward. 

Here are five big benefits for your business when you conduct a skill gap analysis: 

• Give you an overview of business organization, which takes into account all departments and their specific skillsets. It allows you to determine more exactly which teams need training or not. 
• Optimize your long-term workforce strategy to adapt to the constantly evolving business environment. It allows organizations to be proactive in their workforce development strategy, as well as recruitment planning in the long term. 
• Increase employees’ productivity by providing them with vital training programs promptly to fill the skill gap. Additionally, a clear career development roadmap will encourage employees to upgrade themselves and contribute to business success. 
• Advance your competition by filling in your organization’s weak areas. 

How to conduct the best skill gap analysis in 5 steps?

1. Plan the analysis
2. Define business’ future goals and required key skills
3. Measure the current skills
4. Find out where the gaps are
5. Put your findings into action

Now, let’s get into the details step by step!

Step 1: Plan the analysis

You can conduct a skill gap analysis on two separate levels – individual and team/company

• Individual level: assess the skill level of employees and compare to the skill required for the job. 
• Team/company level: determine whether employees have the required skills for upcoming projects and employee training programs are necessary or not. 

Each level is conducted in particular situations. Knowing the scope of the analysis also helps you to decide who you need to work with to gather information. You can see an overview of skill gap analysis in this table below: 

Scope	When to perform?	Who to work with?
Individual	– Performance review – Change in employee’s duties  – Need for new skills for new project or promotion	Team leader
Team/company	– Strategy shifts that require different skillsets – Implement new technologies – Problems in business performance – Problems in meeting business targets	Team leader; HRExternal consultants

Step 2: Define business’ goals and required key skills

You have to know where the business wants to be to figure out the skills your employees need to get. Well, here we suggest a list of questions for you to complete this step

• What are the business’ goals in the present and the future of a year, 5 years, or longer?
• What are the strategies to get the company where you want to go?
• What skills do the business require from the current workforce?
• What knowledge or skills the organization are lacking or missing?
• What skills might the business require in the future?

You can involve not only managers and C-suite but also employees in the surveys to gain multiple insights. This also makes employees feel that they have their voice in the company’s growth. 

When identifying required skills, you should use numerical rating scales for the skill level required and its importance or priority. For example, a scale of 1 to 5 will range from fair to excellent level, or moderate to high importance. 

Recommend reading:

• Setting L&D Goals: 4 Successful Tips and Tricks

Step 3: Measure the current skills

There are various ways to measure your employees’ current skills, including

• Conduct survey and individual/group interview
• Conduct skill assessments
• Feedback from individual’s KPI or regular performance review

It should be noted that you will need to get 360-degree feedback to ensure objectivity. In other words, you can have feedback on employees’ current skills from employees themselves, colleagues, line managers, etc. Besides, we recommend you use support tools or functions in learning management systems to automate the gathering and analyzing process. It undoubtedly saves you much time and effort.

Step 4: Find out where the gaps are

Now you have both data of what employees have and what they need in place, let’s analyze them. 

On the individual level, the skill gap analysis can show you employees’ strengths and weaknesses by certain skills. Is he/she an expert in a skillset to be promoted to a higher position? Or does he/she lack any skill, which needs a training plan?

You can also compare each individual analysis to others to have an overview picture of a specific team or department. It allows you to determine whether the entire team lacks a certain skill or only particular employees. 

On the team/company level, the analysis helps you to recognize the areas that need improvements with training or hiring. Based on the analysis, you can set appropriate goals for the team or the whole company. 

Step 5: Put your findings into action

Your final skill gap analysis might become meaningless if you do not put it into action. You now need to plan how to fill those gaps by training, hiring, or a combination approach. 

Offer training

More than 50% of asked companies are likely to train and promote their current employees rather than hiring new ones. The training can be delivered in various forms such as

• Formal training, both traditional and online 
• Workshops, seminars, conferences
• Employee mentorship programs within the company
• Obtain certifications like Project Management Professionals (PMP) 

Hiring

When the skill gap is too wide to fill by training, hiring is a quicker and more cost-saving solution. You can add skill assessments in the interview process to shortlist candidates and ensure they match your requirements. 

To sum up

Conducting a skill gap analysis can be time-consuming and costly, but it’s worth every spending as well. It’s critical to know which skills your employees are required to ensure your business’ success in the future.

Read more

• Compliance training 101: How to engage your employees?

• A Complete Guideline to Optimise L&D Organization Structure

• Microlearning For Employee 101: All You Need to Know