What is a skills gap analysis?
A skills gap analysis is a tool used to assess the difference (or gap) between a workforce’s current capabilities and what is required to meet the current or future demands of the business strategy. It identifies the skills that employees need but don’t yet have to carry out their job or perform certain tasks effectively (Antonucci, Ovidio, 2012).
HR, along with team leaders and possibly external consultants, conduct a skills gap analysis to find out which specific skills and knowledge are lacking among the employees. This is typically done in preparation for upcoming changes, such as new projects, strategy shifts, and technology updates.
With this information at hand, HR can address the skills gap through upskilling, reskilling, L&D investments, succession planning and other methods that we will discuss later in this article.
With this information at hand, HR can address the skills gap through upskilling, reskilling, L&D investments, succession planning and other methods that we will discuss later in this article.
Why is a skills gap analysis important?
1. It gives you insights into your entire workforce
2. It boosts individual learning and development
3. It helps your strategic workforce planning
4. It can improve your recruitment efforts
5. It creates a competitive advantage
2. It boosts individual learning and development
3. It helps your strategic workforce planning
4. It can improve your recruitment efforts
5. It creates a competitive advantage
How to conduct a skills gap analysis
Step 1: Scope and diagnostics
The first step of an employee skills gap analysis is to define its scope and identify the needed skills.
You can conduct a skills gap analysis on an individual, team, or organizational level. For example:
You can start by asking and answering certain questions, such as:
The criterion for determining whether or not a skill is critical or non-critical is as follows. If an employee lacks a certain skill but still completes a task satisfactorily, the skill is non-critical. On the other hand, if an employee completes a specific task but with an unsatisfactory outcome, the missing skill is critical.
When deciding what your organization and industry will need in the future, consider questions such as:
The first step of an employee skills gap analysis is to define its scope and identify the needed skills.
You can conduct a skills gap analysis on an individual, team, or organizational level. For example:
- Individual – When the duties of a certain position are changing, or an employee is falling below performance standards.
- Team – When a project expects employees to complete a different set of tasks or use new technology.
- Organizational – When the company is not achieving business goals or a strategy shift requires expanded capabilities.
You can start by asking and answering certain questions, such as:
- What is the mission?
- What are the business goals?
- Which hard and soft skills do we value as an organization?
- What critical skills are needed to be able to perform the mission and meet the business goals?
The criterion for determining whether or not a skill is critical or non-critical is as follows. If an employee lacks a certain skill but still completes a task satisfactorily, the skill is non-critical. On the other hand, if an employee completes a specific task but with an unsatisfactory outcome, the missing skill is critical.
When deciding what your organization and industry will need in the future, consider questions such as:
- What jobs within your organization/industry are likely to be affected by automation?
- What skills are currently on the rise in your industry?
- What kind of jobs will your company need to add or expand on?
Step 2: Data collection and analysis
The second step involves collecting and analyzing data. The goal of this phase is to assess what tasks are being done now, rate how important these tasks are, and inquire about the skills required to do the work properly.
Data collection and analysis activities can include:
Developing job profiles and identifying critical skills needed for each job role:
Conducting an inventory of your employees’ current skills using:
Identifying your employees’ competencies and skill levels:
HR technology can help you with several parts of this. A talent management system, for instance, can serve as a searchable database that gathers all the information from your employees’ performance evaluations and competency assessments.
Data collection and analysis activities can include:
Developing job profiles and identifying critical skills needed for each job role:
- Review current position descriptions for future needs.
- Consider the impact of any upcoming regulatory or other changes as well as future work trends.
- Develop a list of competencies that most clearly and accurately describe what is needed to do the work.
Conducting an inventory of your employees’ current skills using:
- Position descriptions
- Job class specifications
- Performance evaluations
- Competency assessments
- Interviews/focus group meetings with supervisors, managers, and employees
Identifying your employees’ competencies and skill levels:
- Put information gathered from competency assessments into a single, searchable database.
- Log all employees and their existing competencies into the database.
- Cross-reference with identified necessary critical skills for now and the future.
HR technology can help you with several parts of this. A talent management system, for instance, can serve as a searchable database that gathers all the information from your employees’ performance evaluations and competency assessments.
Step 3: Designing interventions
This stage is about creating effective interventions. Once you’ve found out where the skill gaps are in your organization, you can form a strategy to best bridge them.
Simple skills gap analysis example
You can create a simple skills gap analysis template on a spreadsheet that compares current skill levels to desired skill levels. It would contain the following fields:
Be sure that everyone who is assessing employees’ skill levels has consistent criteria and understands how to apply them to their ratings.
You can customize a simple skills gap analysis spreadsheet for different teams or purposes, such as by department or for soft skills or hard skills.
You can create a simple skills gap analysis template on a spreadsheet that compares current skill levels to desired skill levels. It would contain the following fields:
- Employee name
- Skill to measure (these should be as specific as possible and relevant to a position either currently or in the future)
- Skill level rating (point system)
- Desired skill level (point system)
Be sure that everyone who is assessing employees’ skill levels has consistent criteria and understands how to apply them to their ratings.
You can customize a simple skills gap analysis spreadsheet for different teams or purposes, such as by department or for soft skills or hard skills.
Skills gap analysis template
Using a skills gap analysis template helps you consistently and systematically identify and address discrepancies between current employee competencies and those required for optimal performance.
The template provides a structured framework, making it easier for organizations to assess skill deficiencies and prioritize areas for development on a team and individual level.
👉🏻 Download Skills Gap Analysis Template
At the Academy, on the Learning&Development Manager course, we help HR professionals who are looking to add relevant and in-demand skills to their skill set so that they don't face a knowledge shortage.