What is a skills gap analysis?
The skills gap analysis is becoming more and more important as the need for organizations to reskill and upskill their employees continues to rise. Human resources experts and hiring managers are increasingly reporting a skills gap, according to a new survey by Wiley. Over the last 12 months, it increased from 55% to 69%.
This post will provide a three-step process for performing a skills gap analysis, define the term, and discuss its benefits.
When a company wants to know how well-equipped its employees are to fulfill the present and future needs of its strategy, it can do a skills gap analysis to find out. According to Antonucci and Ovidio (2012), this tool helps employees find the talents they need but don’t already possess in order to accomplish their jobs well.
Lack of both technical and interpersonal abilities can plague businesses. Some hard skills that are in high demand are project management, internet communication, and analytics. Soft skills such as the ability to think critically and solve problems, as well as the ability to communicate effectively and work well with others, are in low supply, according to a study by the Association for Talent Development.
Companies lacking the necessary expertise will have a hard time keeping up with the ever-shifting technological and business landscapes. Lack of preparedness in the workforce leads to a decrease in innovation, underperformance or resignation of personnel, and an inability to meet customer expectations.
Human resources, in conjunction with team leaders and, if necessary, outside consultants, do a skills gap analysis to identify in-house knowledge and skill gaps. This is usually done before big changes like new initiatives, changes in strategy, or modifications to technology are about to happen.
Using this data, human resources can fill the skills gap in ways we’ll talk about later on in the article, such as through investments in learning and development, succession planning, reskilling, and upskilling.
Examples of a skills gap
There are solutions available to organizations who choose to address the skills gap issue. Some instances of how businesses have found and addressed skill shortages are as follows:
NASA
Data scientists are essential to the functioning of the National Aeronautics and Space Administration (NASA), the United States government organization responsible for space research and exploration. Given the strong demand for these individuals, they decided to look inside the current workforce for potential candidates. Although the company as a whole possessed data capabilities, not all of the diverse skills had been properly classified.
With the help of a talent-mapping database, NASA was able to determine which data-related abilities were necessary for specific projects. Employees with certain skill sets can be more effectively matched with projects that call for those specific competencies.
Verizon
Verizon, a communications technology giant, plans to train half a million people for future careers by the year 2030. It made Verizon Thrive, a program for tech trainees. Participating in the 12-month earn-and-learn program helps individuals with great potential acquire the critical skills needed for tech jobs at Verizon.
Verizon offered full-time positions to 95% of the first cohort of apprentices when they finished the program.
Chipotle
Chipotle, like many other fast casual restaurants, deals with the problems associated with excessive turnover and an inadequate supply of managers. It started paying for employees’ college tuition in full up front in 2019, so they can graduate without taking out any loans.
Among Chipotle’s crew workers who participate in the program, the employment retention rate is 3.5 times greater. There is a 7.5-fold increase in the likelihood of a promotion to a managerial position for employees who use the benefit.
Healthcare company powered by artificial intelligence
An AI-driven healthcare firm was the victim of a skills gap, according to Miriam Groom, CEO of Mindful Career and Leader Human Capital at KPMG. Groom claimed that while their engineers were great at creating innovative algorithms, they lacked knowledge when it came to patient-centric design and the intricacies of healthcare.
The business launched a TechMed partnership program that spans departments in response to this discovery. A combination of technological genius and compassionate, patient-first solutions resulted from pairing engineers with medical experts for immersive experiences. Thanks to this interdisciplinary learning, not only did their products become more effective, but the company also noticed an increase in employee happiness.
In what ways might a skills gap analysis be useful?
According to the World Economic Forum’s Future of Jobs Report, the continuous development of AI and automation will disrupt the critical skills and knowledge of 44% of the workforce over the next five years.
This will cause some positions to become obsolete while others see significant shifts in their primary duties at companies across all sectors. Here is where job redesign comes into play, reshuffling these duties and obligations to better fit the modern workplace.
Find out what your employees lack in terms of knowledge and abilities before you start reworking their roles. Determine which of these abilities is critical to the success of your company.
That is why it is crucial to undertake a skills gap analysis of your staff. Just to name a few reasons:
- It provides a comprehensive view of your complete staff
You’ll be able to see which workers lack certain abilities and which ones have the most sought-after expertise in specific areas of the company.
This way, you can focus your training and development initiatives on the areas where your employees need it most. In the end, this will help the team perform better by making the most efficient use of its resources. Finding training and development programs that are a good fit for skill requirements can save expenses in half, says McKinsey.
- It promotes personal growth and development through learning.
As a worker, you may benefit from a skills gap analysis by learning more about the areas in which you need to grow professionally so that you can succeed in your current and future positions. Half of the workers surveyed (53%) in PwC’s Global Workforce Hopes and Fears Survey said they need specialized training for their job.
Additionally, it will show which workers are contributing the most and should be promoted or paid more. The productivity of your staff may benefit from this as well.
- Your workforce strategy will benefit from it.
Making ensuring you have the correct amount of skilled workers in the proper positions is one of the many goals of strategic workforce planning. You can’t begin to prepare for the future without first gaining a clear picture of your present ability level.
You can find out which critical roles are missing essential abilities by doing a skills gap analysis. The next step is to establish objectives and criteria for achieving the desired level of workforce performance.
- It has the potential to boost your hiring campaigns.
Finding something requires prior knowledge of what it is you are seeking. If you know what skills are necessary for a position and can narrow your search to individuals who possess them, hiring top talent is a breeze.
Another option is to come up with fresh approaches to talent acquisition that will help you find and hire the right people.
- It makes you stand out from the competition.
You can gain an edge over your competitors and maintain it if you implement all of the aforementioned strategies. You will be aware of your employees’ abilities and areas for improvement. In this approach, you can enhance your organization’s performance by strategic planning of training and hiring.
Methods for performing a skills gap analysis
There are three stages to performing a skills gap analysis, and they are all somewhat derived from the process of organizational growth. So, here’s how it works:
Phase One: Assessment and Evaluation
Identifying the necessary abilities and defining its scope is the first stage in conducting a skills gap analysis for employees.
An individual, group, or company can all benefit from a skills gap analysis. As an illustration:
- Personal: In cases where an employee’s performance is inadequate or when the responsibilities of a specific job are evolving.
- Team: When employers want workers to do a new set of jobs or use innovative tools for a project.
- Organizational: In cases where the firm is unable to meet its objectives or when a change in strategy necessitates the development of new skills.
Begin by posing and responding to specific questions, like:
- What is the goal?
- What are the objectives of the business?
- What are the most important soft and hard skills for our company?
- In order to carry out the mission and achieve the company’s objectives, what are the most important skills?
To find out if a skill is critical or not, we use the following criteria. A skill is considered non-critical if an employee can get the job done without it. However, if a worker accomplishes a particular task but the result is subpar, an essential skill is lacking.
Asking yourself questions like these can help you anticipate the needs of your business and your industry:
- Is automation going to have an impact on any specific occupations in your company or field?
- In your field, what abilities are most in demand right now?
- If your business were to grow, what new types of positions would it require?
Phase 2: Gather and analyze the data
Data collection and analysis constitute the second stage. The purpose of this stage is to take stock of the current workload, prioritize the tasks at hand, and identify the knowledge and abilities needed to complete each one.
Possible steps in gathering and analyzing data include:
Creating detailed descriptions of each position and cataloging the essential competencies required to fill them:
- Consider future demands when reviewing present job descriptions.
- Think about the way people will be working in the future and how that will affect any changes in regulations or other factors.
- Compile a list of skills and knowledge that best characterize the job requirements.
Taking stock of your staff’s present abilities by means of:
- Job descriptions
- Qualifications for the position
- Assessments of work output
- Evaluations of skill
- Meetings with employees, managers, and supervisors in the form of interviews or focus groups
Finding out what your workers are good at and how much they know:
- Consolidate all of the results from the competency tests into one easily searchable database.
- Enter all staff members and their current skill sets into the system.
- Verify with the recognized important abilities that are essential for both now and tomorrow.
There are a number of ways in which HR tech can be of assistance. As an example, a talent management system can compile all the data from your employees’ competency and performance reviews and store it in a searchable database.
Difficulties in measuring skill gaps
According to HR Hints’ People & Culture Partner Kinga Golebiowska, there are three main obstacles that HR experts face while performing a skills gap analysis:
It’s easy to focus only on technical skills when doing a skills gap analysis because technology pushes us to change how we work all the time and lets us benefit from automation. In doing so, we run the risk of ignoring the importance of important intrapersonal and interpersonal abilities, such as the ability to communicate, evolve, and lead. Making a hasty decision without thinking about how the industry will change in the future can lead to a solution that doesn’t last. Workers may fight change if they feel uninvolved or unprepared for it. The key to overcoming this obstacle is efficient change management.
Phase 3: Creating Interventions
At this point, you should be thinking about ways to help people. The first step in filling in your organization’s skill gaps is identifying them.
Skill deficits will manifest differently for various organizations. The research from the World Economic Forum that was cited earlier states, however, that cognitive abilities are becoming increasingly in demand. When it comes to the most important fundamental abilities, analytical thinking and creative thinking are neck and neck, with technology literacy coming in at number three.
Analyses of skill gaps and interventions
Your present workforce’s capabilities and the talents you’re lacking will determine the kind of assistance that’s most appropriate. Let’s look at the choices:
Improvements to current staff members through training
The training requirements of your staff can be better understood with the use of a skills gap analysis. The findings of the investigation could pave the way for more extensive training and education initiatives. Your staff will be prepared to meet new demands and fill skill gaps with the help of targeted training.
Redesigning the job
If you want to know if particular positions require reorganization, ask questions regarding the company’s purpose, long-term objectives, and the abilities needed to reach those targets. What we mean by this is job redesign, and it may include reskilling or upskilling current workers.
Filling key positions with qualified candidates
If you conduct a skills gap analysis, you should expect your hiring standards to shift based on the findings. You will still need to hire new individuals to fill vacant jobs, regardless of how good you are at reskilling or improving the skills of your present staff.
It will be more efficient to hire someone with the necessary expertise already rather than spending time teaching them. Plus, they’ll be up and running and producing results in no time. To temporarily bridge a skills vacuum, you can engage freelancers or contractors from the contingent workforce if you can’t find people quickly enough.
According to the Wiley Closing the Skills Gap survey, companies planned to address talent gaps in the following ways:
- Train workers to acquire new skills (65%)
- Talent acquisition for critical positions (48%)
- Employing temporary workers (41%)
The majority of companies that deal with skill shortages employ a mix of measures.
When things don’t line up with what the organization needs, even when they appear significant, it can lead to wasted resources and a lack of support. Not only that, but if the senior leadership isn’t on board with the solution after the analysis is complete, it will be very difficult to secure the necessary resources and support.
Maintaining control over your organization’s talent gaps requires routinely conducting skills gap analyses. Every twelve to twenty-four months, as a rule of thumb, you should perform a thorough evaluation. But, it may be required to evaluate skill gaps more often in industries that change at a rapid pace. According to Kinga Golebiowska, People & Culture Partner at HR Hints, the most crucial thing is that it shouldn’t be an infrequent practice, but a regular occurrence.
By conducting evaluations on a regular basis, you can find any gaps before they have a major influence on your company. This way, you can consistently lower the risk of poor performance and losing your competitive edge.
Case studies of skill gap analyses
Having a consistent method for performing a skills gap analysis is crucial. The best and most useful results will come from a method that is both well-structured and maintained. Here are two kinds of skill gap analyses that we can examine.
A basic example of a skills gap analysis
An easy way to do a skills gap analysis is to use a spreadsheet to do a comparison between your present skill level and your ideal skill level. Here are the fields that it would include:
- Name of employee
- Measurable skill (they should be as detailed and applicable to the job at hand as possible)
- Grading method for skills
- Objective degree of competence (point system)
Make sure that all individuals responsible for ranking employees’ skill levels are using the same criteria and are aware of how to apply them.
You may modify an easy-to-use spreadsheet for skills gap analysis to suit your needs, whether that’s by team, by department, or by hard or soft skills.
Assessment of quantitative skill gaps
In order to quantify the difference between each ability and every subject under examination, Antonucci and Ovidio developed a method for skills gap analysis.
Their system exclusively considers the negative gap scenario, in which an employee’s competencies fall short of what is required. They are also making a distinction between a skill gap involving frequently used skills and a skill gap involving seldom used skills.
The study begins with a mapping of the abilities required for each job description. Each necessary competency can have its benchmarks established in one of two ways: either top-down (from management to workers) or bottom-up (from workers to management).
Here are some benefits of using this method for benchmarking:
- Both the top-down and bottom-up approaches yield the same result when following the procedure.
- By factoring in the significance and frequency of use, you may obtain quantitative estimates of the skills gap.
- It allows for a semiautomatic procedure that is both versatile and useful when designing training programs.
When using the quantitative approach, keep in mind these three points:
- Information gathering: Either paper-based tests with supplementary interviews or skill management software can help businesses gather the necessary data. The latter becomes the clearer choice, particularly when analyzing skill gaps among a big workforce.
- Methods of collecting the essential data for assessments: Self-assessment questionnaires and 360-degree evaluations can collect data on the required skills, the frequency of usage of specific abilities, and the store of skills that are role-specific. 15Five and Reflektive are just two examples of the feedback systems that can help you gather and analyze employee opinions.
- Scores: The evaluations of abilities are shown on a scale from 1 to 5, where 1 represents the lowest level and 5 represents the maximum level. With each level, interviewees rate their own real ability level as well as the level they think is essential. There is a consistent grading system in place to show the level of skill use within an organization.
After you have collected all the necessary information, you can compare the talents that employees have with those that are needed, as well as see how often those skills are employed in the organization. Once you have this information, you may take the necessary steps to address the skills gap. We’ve already discussed some of these solutions.
Sample template for a skills gap analysis
A skills gap analysis template can help you find and fix the gaps between your employees’ present abilities and what they need to perform at their best.
With the help of the template’s organized architecture, businesses may more easily identify skill gaps and set priorities for team and individual growth.
To wrap things up
Identifying the present and future needs of your staff in terms of skills and competences is crucial in an era where firms are actively seeking ways to prepare their employees for the future. Your company risks losing its competitive edge and missing out on innovation opportunities if it doesn’t fill talent shortages.
One of the most important ways to find out what your staff can do and how to make them even better is to do a skills gap analysis.
