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How (and why) to conduct a skills gap analysis

Industries change rapidly, and new skills are constantly required to stay at the top of your game. That statement is true for individuals and organizations in virtually every industry in the world. People and companies need to adapt to stay at the top, and they need to regularly assess if they have the skills to do so. To accomplish this, it’s helpful to conduct a skills gap analysis to determine areas of improvement and growth.

This article will walk you through how (and why) to conduct a skills gap analysis at your organization. But first, what is a skills gap analysis, anyway?

What is a skills gap analysis?

A gap analysis measures where you are currently versus where you want or need to be in the future. Therefore, a skills gap analysis is a survey of what skills an individual or company currently possess and those that they will need in the future to meet their business goals.

Think of a skills gap analysis as a planning tool to ensure that your team is equipped to meet the demands of your industry, customers, and strategic path.

As mentioned, a skills gap analysis can take place on an individual, departmental, or company-wide level. They can be small or comprehensive in scope, and they can be conducted at any interval that aligns with the company’s growth cadence.

However, it’s conducted, the outcomes of a skills gap analysis are used to inform employee development and training requirements and hiring strategies that will fill those gaps.

Now that we’ve defined what a skills gap analysis is let’s look at why you should conduct one.

Why do a skills gap analysis?

We’ve mentioned that skills requirements shift rapidly in virtually every industry around the world. But let’s quantify that more clearly. Here are some statistics that demonstrate the need, and urgency, that many companies feel around upskilling their workforces.

These statistics indicate a clear real need for upskilling and reskilling at many organizations around the world. Most will need to conduct a skills gap analysis to determine where they should focus their time and money.

Apart from the growing need for upskilling and reskilling, there is a range of benefits to this practice for organizations, including:

  • Helping to ensure that you’re staying on top of industry trends
  • Enabling strategic workforce planning
  • Giving you a clear picture of your entire organization
  • Increasing productivity and output over time
  • Increasing employee engagement by addressing desires for professional and career development
  • Optimizing your long-term recruitment strategy by crystalizing short- and long-term goals and enabling proactive recruitment
  • Giving you a competitive edge and allowing you to seize opportunities as they arise

Without a skills gap analysis, the bottom line is that it’s very difficult to get a complete picture of your company’s potential and factors that might drag on that potential.

 

How to conduct a skills gap analysis

Now that we’ve discussed what a skills gap analysis is, and why they’re important, let’s dive into how to conduct one. To do so, we’ve broken this process into four key stages:

  1. Planning
  2. Identifying required skills
  3. Measuring current skills
  4. Filling the gaps

This walkthrough is mostly intended to demonstrate how to conduct a large scale, company-wide skills gap analysis. This same thought process can be condensed and used to identify skills gaps at the departmental and individual levels as well.

1. Planning

Failing to plan is planning to fail. This statement could not be more true with a skills gap analysis. Without taking these critical planning steps, it’s likely that this initiative will either fail to get off the ground entirely, or will be looking for the wrong things.

To avoid both of these situations, we recommend following these planning steps:

Decide the scope of your skills gap analysis

Will the skills gap analysis be conducted at the individual, team, or company-wide level? Who will you focus on in this skills analysis? Answering these questions early will help determine what it is you’re looking to achieve, looking for, and how you plan to frame your analysis.

If the goal is to conduct individual skills gap analysis, then you’ll likely be focussing on comparing each employees’ skills with their existing job requirements. Team or company-wide skills gap analyses, on the other hand, will focus on determining whether or not your company has specific skills required to complete an upcoming project or strategic initiative.

Set roles for the skills gap analysis

Who will be the team leader for the project? For individual assessments, this is likely the team leader or direct supervisor. On a company-wide level, this is likely a team leader or the HR department.

Determine when you’ll conduct the analysis

Establish a project timeline, and cadence, for when and how frequently you’ll conduct the skills gap analysis.

For individuals, this might be when the employee has a change to their duties, or if they’re being onboarded to a new project. For the company, this is usually triggered when there are clear signs of problems meeting business goals, if there’s a shift in strategic directions, or if new technology or processes are introduced.

Determine how you’ll respond to the outcomes

Clearly establish what you will do with the results of your gap analysis survey early on. This will prevent delays in reacting to the findings, and help clarify expectations for key stakeholders early in the process.

It’s likely that some kind of investment will be needed in the form of training, succession planning, mentoring, or hiring. Identify and plan for these eventualities in this phase of the process.

2. Identify the required skills

Once you’ve laid out your plan of attack, and established how you’ll respond to the outcomes, the next step is to figure out what skills you’re looking for. For this, we’ll focus on skills needed at the company level for new projects or strategic initiative.

To identify priority skills, you need to talk to a lot of people within your organization, including:

  • The executive team to understand what strategic initiatives and major projects are coming down the pipe
  • Department heads to get a handle of what skills they’d need on their teams to complete specific projects.
  • Individuals to get more information about what skills they would need to perform to the required level in the future.

The goal here is to understand what skills are needed, and then understand who may have (or need) those skills. You should also turn an eye to your hiring strategy to ensure that the skills you’re highlighting in your job descriptions align with your current and future needs.

Ask you the following questions during this process:

  • What skills do we value as a company?
  • What skills do our employees need to be successful now and in the future?
  • What skills are we highlighting in your hiring process?
  • Does the hiring process align with our new skills requirements?

Going through this process of interviewing people across your company, and analyzing your hiring strategy, will help you create a list of must-have skills.

From there, we recommend breaking these skills down by level of importance. Assign a numerical value between one and ten for each.

This might include;

  • Level of importance (1-10)
  • Skill level required (1-10)

Use this scorecard to guide where to focus your effort, and as your baseline when measuring your current skills.

3. Measure your current skills

Now that you’ve identified and ranked your required skills, the next step is to find out if your company currently has them.

There are a number of strategies to accomplish this, depending on the size of your company. In all cases, though, this step requires you to engage directly with employees of all levels across the organization. Collect their input about what skills they currently have, what they need, and how they’d like to gain them.

Some tools you can use to collect this information include:

  • Employee surveys
  • Skills assessments
  • Interviews with employees
  • Feedback notes from performance reviews
  • 360-degree reviews
  • Analysis of KPIs for teams and individuals

In all cases, the idea is to gain as much information as possible about the company’s current performance relative to your goals. If there’s a clear lag in some areas, then this may indicate a skills gap.

You can also apply these findings to hypothetical situations. For example, if one team is currently struggling due to a skills gap or performance issues, and you need that team for a major strategic initiative in the near future, then they will likely be an area of focus for hiring or training.

As you go through this process, refer back to your skills scorecard. Keep track of which high priority skills are present within your organization, and to what level. If there are holes in this scorecard, or the level of skill is not where it needs to be, then this is where you should be focussing your attention.

4. Fill the gaps

By now, you’ll likely have a laundry list of skills gaps that need to be addressed. You should also have a pretty good idea of how you need to address them. Remember the planning phase when you outline how you’ll respond to findings from the skills gap analysis? This is where that planning will pay off.

Generally, there are two ways that skills gaps are addressed: training or hiring.

Training involves having your employees work through a defined professional development plan that focuses on the areas that you’re looking to upskill. Have the employee and hiring manager work together to create a PD plan that works for both parties.

The company will then need to commit the resources to training the employees. This may come in many forms, including:

  • External training courses
  • Online courses
  • Mentorship programs
  • Events or conferences
  • Certifications

Hiring, on the other hand, may be required if the skills gap is too significant to address with training. Think of a skill like artificial intelligence coding or any highly technical and strategically critical skillset.

When hiring to fill a specific skills gap, you should:

  • Modify your hiring process to screen specifically for the skill that you’re looking for
  • Create specific job requirements and requisitions for those skills
  • Source passive candidates using social recruiting or talent pipelines
  • Use structured interviews to objectively measure candidates’ skill level relative to your requirements
  • Conduct in-depth skills testing exercises to ensure that the candidate is at the level you’re looking for

If your company is going through a major strategic shift, then it might also be necessary to alter your recruitment ads, job requirements, employer branding, and job site strategy to appeal to specific skill sets as well.

Skills gap analysis tools

Conducting skills gap analysis can be fairly onerous. Luckily, there are plenty of skills gap analysis tools to help. Here is a quick round up of tools you should consider to make this process easier.

  • Excel. The perfect tool for creating simple survey frameworks, capturing data, and analyzing trends. Use this to plan and capture data for smaller skills gap analysis, or for analyzing large quantities of quantitative data.
  • Survey Software. Tools like 15Five or OfficeVibe  can be used to create and send customized surveys to your employees. This is a great way to survey a large number of employees quickly.
  • Skills Management Software. Tools like HRSG or Avilar offer turnkey solutions for competency and workforce planning that can be used to create and monitor your master framework to guide your skills gap analysis. Use these as your mission control to keep track of engagement, skills gaps, training, succession planning and more.
  • Performance Management Software. Use these tools to create and track goals, measure performance against KPIs, identify areas of improvements, share notes on individual development, and aggregate data on team progress.
  • Learning Management Software. Use these tools as a key solution for addressing your skills gaps.

We hope this guide will help you identify and address any skills gaps within your organization.

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