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Skills Gap Analysis: All You Need to Know

What’s better than hitting two birds with one stone? Hitting three birds with one stone – figuratively speaking, of course! Reach your business objectives, maintain a skilled workforce and find the best-fit candidates by leveraging the power of a skills gap analysis. 

Is your company a tad shy of reaching its goals? You might be struggling with skills gaps! Skills gaps occur when your existing team’s skills don’t quite align with the skills your company needs to meet its objectives – it’s a disconnect between what you’ve got and what you need. 

Understanding the gap between your team’s capabilities and your company’s needs will help you figure out where to invest in skills development, be it through training programs or development initiatives. It will also contribute to a refined hiring process, making sure you’re taking on candidates equipped with the necessary skills to drive your company forward. 

Now imagine having a tool that not only spots these deficiencies but provides you with all the data needed to create strategic plans to sculpt a skilled workforce that dances through challenges. No, it’s not a magic wand; it’s a skills gap analysis. Ready to dive in? 

The Benefits of a Skills Gap Analysis 

A skills gap analysis is an excellent tool for pin-pointing exactly what skills and abilities employees need to fulfill their role requirements. Using the data collected from your analysis, you can work towards bridging those gaps and meeting your goals. A skills gap analysis isn’t just about diagnosis; it’s about prescription too.

Conducting frequent skills gaps analysis will provide a bounty of great benefits for your organization, including: 

Improved hiring and recruiting

Through a skills gap analysis, you’ll gain a comprehensive understanding of the specific skills your company lacks. Knowing exactly what skills you need from your next candidate will streamline your hiring process, and help your business save time and money on recruiting. 

Honed learning and development initiatives

Develop targeted training and upskilling using the results of your analysis. This personalized approach ensures your workforce receives precise training and tailored support to excel in their roles. 

Improved workforce performance

Upskill your current employees and contribute to a more skilled, adaptable and effective workforce as a whole. It’s a win-win situation that elevates your team’s capabilities and drives your business towards greater success. 

Enhanced employee satisfaction and retention

Use your analysis to help invest in your employees’ advancement. This will promote a culture of continuous growth and skill enhancement which will increase job satisfaction, motivation and long-term employee retention.

Better adaptability to industry changes and advancements

Equip your workforce with the foresight needed to stay ahead of the ever-changing work landscape. Help your company stay nimble and competitive by proactively acquiring the skills needed to adapt to emerging trends, technologies, market shifts, or whatever comes your way.

How to Conduct a Skills Gap Analysis

1. Define your business objectives and project scope.

A skills gap analysis can assess your workforce at a few different levels: individual or team/department/company. To decide the most suitable level of analysis, start by defining your business objectives. Once you have nailed those down, you will have a clearer idea of the analysis level that will collect the data you need to achieve your company goals. 

  • Individual: This level of analysis focuses on identifying the key skills required for a specific role and comparing them with the existing skills of an individual employee. In this instance, a team lead or team manager is well-placed to roll out and oversee the evaluation process, given their familiarity with the intricacies of individual roles and responsibilities. 
  • Team/department/company: This level of analysis delves into the skills and capabilities needed for the successful completion of a project or the efficient operation of a team, department, or entire company. For this broader scope, internal or external HR consultants are the most appropriate individuals to spearhead the analysis. Their expertise in organizational dynamics and workforce management means they are able to carry out a comprehensive assessment that spans multiple roles and responsibilities. 

2. Identify the needed skills and competencies.

Next, you will want to identify the necessary skills and competencies your company needs to meet the objectives you previously laid out. For this, you will want to consider the skills that are currently needed for ongoing operations as well as skills that may be needed to meet future goals. To determine these, ask yourself these questions: 

  • What skills does your company value the most? 
  • What skills are required for your employees to successfully fulfill their job duties at present? 
  • What skills are required for your employees to successfully fulfill their job duties in the future? 

Obviously, you don’t have a crystal ball to help you see what skills may be needed in the future but there are an abundance of resources you can use to guide you in this area. For this, you can:  

  • Review employee surveys.
  • Consult managers and other stakeholders. 
  • Use job descriptions.
  • Review exit interview notes.
  • Research industry trends.
  • Refer back to your business goals.

3. Measure the current skills and competencies.

Now it’s time to assess the skills your employees and team currently bring to the table. This step not only identifies the strengths within your workforce but also lays the groundwork for targeted skills development. To gather this data you can do the following: 

  • Conduct employee surveys.
  • Gather 360-degree feedback. 
  • Carry out skills and behavioral assessments. 
  • Request self-assessments. 

4. Analyze and act on the data.

You now have the data you need to start comparing the skills you currently have with the skills your company needs so you can identify any gaps. Top tip: Rate the skills on their importance so you can identify critical skills with ease. 

Once you have identified those gaps, there are two routes you can go down to close them: Train your existing workforce or hire new team members. 

Training your existing workforce

When it comes to upskilling your current team, there are a ton of initiatives you can implement. 

  • Individualized learning & development policies: Empower your team to own their development by offering individual learning budgets.
  • A learning & development platform: Build a space full of engaging and valuable content, where your employees can share their wealth of knowledge.
  • Employee mentorship programs: Create developmental relationships between experienced team members and other employees who want to expand their skill set.  
  • Reward upskilling through career progression: Start awarding promotions based on acquired and applied skills, considering both upward and lateral moves.  
  • Opportunities to obtain certifications: Provide financial and flexible support so your staff can acquire professional and industry specific certifications.
Hiring new team members

If training and upskilling your current team is not enough to bridge the gaps then it’s time to consider hiring additional employees to bring the necessary skills and knowledge to the table. 

  • Adjust your hiring process: Modify your hiring to target individuals with the specific skills you need. This could include incorporating relevant skill assessments. 
  • Change your job descriptions: Adjust your job descriptions to highlight the critical skills your analysis calls attention to. 
  • Consider sourcing passive candidates: Create some headhunting initiatives and tap into the passive candidate pool where you’ll increase your chances of finding individuals with the skills and knowledge you need.  
  • Use a recruitment agency: Last but certainly not least, reach out to a staffing firm and get assistance from skilled consultants who have the resources, reach and knowledge to source the perfect candidates for your company.

5. Monitor the program and make adjustments.

The great thing about these upskilling initiatives is that they are flexible to your needs. Implement new upskilling and hiring programs, evaluate their effectiveness and alter them as needed. You can measure the Return on Investment (ROI) of these programs by doing the following: 

  • Define clear objectives.
  • Establish Key Performance Indicators (KPIs) for employee performance and recruitment efforts.
  • Solicit feedback from employees. 
  • Assess employee retention rates. 
  • Track employee progress. 

Skills gap analyses are about more than just plugging holes. They are about creating a workforce that not only meets challenges, but anticipates them! And remember, this isn’t a one-and-done process. The business landscape is always changing so you should map out regular analyses so your company can remain competitive and on beat with trends, market shifts and evolving business goals. 

And if you decide that hiring new talent is the best way to fill your skills gaps, then we know a great recruitment agency for that…*cough cough*..we’re talking about us! Our consultants are ready to help with your hiring needs, contact us here.

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Posted on Oct 18, 2023