How to conduct a skills gap analysis for your team
A skills gap analysis is a critical tool that helps organizations identify the skills and knowledge they need to strengthen or add to their teams in order to achieve their strategic goals. Knowing how to conduct a skills gap analysis helps organizations get the best out of their employees and avoid hiring additional staff when it’s not really necessary.
Identifying skill gaps empowers organizations to develop targeted training and development programs that cover essential skills and knowledge that employees are currently lacking. The right training will enhance employee capabilities, boost employee satisfaction, and drive business success.
Conducting a skills gap analysis step-by-step
Skills gap analyses are powerful tools for organizations to identify discrepancies between the skills their workforce currently possesses and the skills they need to achieve their strategic goals. It helps organizations understand the skills they lack and prioritize training and development initiatives.
The skills gap analysis process follows several steps. Some businesses choose to follow a skills gap analysis template to standardize the process. However, any skill gap analysis will follow these steps:
Step 1: Plan
A successful skills gap analysis will be carefully planned to take your business objectives and scope of the project into account. At this point, you must decide if you conduct your skills gap analysis on an individual or team level:
- Individual: An individual skills gap analysis involves determining the desired skills for a specific role and comparing them to the skills the employee currently has.
- Team/department/company: This is a more complex undertaking in which the skills required to work on a project or run a department successfully are analyzed.
The planning stage will also consider who to speak to to determine the skills needed. If you’re analyzing an individual, decide which people can best pinpoint individual employees’ skills gaps. This will likely be their team leader or a manager.
Address individual skill gaps with microlearning
Addressing individual skill gaps in frontline workers is essential as a lack of knowledge or expertise in a certain area can lead to costly mistakes, errors, and accidents. Fortunately, the best learning management systems like Axonify close individual skill gaps quickly and effectively with fun 3-5 minute tailored microlearning modules.
With this kind of mobile-first learning app, training can form part of employees’ everyday routines at work. Platforms offering microlearning modules enable workers to complete training sessions during a coffee break or lull in activity and close their individual skills gaps quickly and cost-effectively.
Traditional training sessions often lack practical examples of how to apply new skills in customer-facing roles. That’s why investing in an LMS that specializes in frontline workers from your industry is so valuable.
For example, retail workers in a department store can learn and strengthen a range of essential skills from personal shopping to driving sales. This practical knowledge can be applied the very same day on the floor—boosting performance and eliminating skill-gap-related mistakes.
Step 2: Identify critical skills
The second step is to determine the skills required for the organization to meet its objectives. Remember not to only consider the skills required to do the role in its current capacity. Also, anticipate skills that may be needed to reach future goals.
Consider questions like:
- Which skills are most highly valued by our company?
- Which skills are required to stay competitive going forward?
- Which skills do employees need to carry out their roles effectively and efficiently?
- Which skills are becoming more important in our industry?
- Do we need to train employees in new technologies?
- Is there any scope to create new job roles that don’t currently exist?
How to narrow down critical skills for your business
Information from several sources can help you pinpoint the essential skills for your business. These include:
- Job descriptions: Checking job descriptions is a great place to start. Analyze how jobs are advertised in your company and elsewhere. Take note of recurring hard and soft skills.
- Business goals: Looking at the big picture is crucial. Don’t limit yourself to the skills required right now. Instead, try to anticipate the interpersonal and technical skills required to give your company a competitive advantage in the future.
- Company values: Your company values are highly significant for your brand identity. Your employees must be trained in skills that reflect your values.
- Regulatory changes: Staying compliant with changing regulations requires ongoing employee training. Stay abreast of any regulatory changes and include these in your training list.
- Experienced employees: No one knows a role like the employees already working in that role. Ask different stakeholders like line managers and employees which skills they consider most important for their roles.
Step 3: Measure current skills
Training and development programs are most effective when they adapt to the skills your employees already have. Various tools can help you take a baseline reading of your employees’ current skill sets and assess skills gaps:
- Performance reviews: Line managers can use yearly performance reviews to reassess employee skills.
- Assessments: Paper-based skills assessments could come from colleagues or line managers. Self-assessments and interviews can also be conducted for a 360-degree view of each employee’s knowledge and abilities.
- KPI contributions: Tracking employee metrics is a good way to assess certain skills. However, soft skills may be harder to measure.
Step 4: Act on the data
Companies can choose one of two ways to close the skills gaps that have been identified: training or hiring. Decide which approach is best to fill each skill gap. In some cases, a combination of the two might be best.
Training to fill skills gaps
Many companies favor employee development over bringing in new hires. Offering high-quality, relevant training is one of the best ways to boost employee satisfaction and retention.
Your frontline workers are likely a rich source of untapped talent if you’re willing to invest in closing their skills gaps. The right training can be a cost-effective way to close gaps between employees’ current skill sets and the necessary skills for their new roles.
Hire for skill gaps
Hiring for skills gaps should be considered a last resort. However, it can be a good option if you need a certain skill set immediately or you perceive your current skill gaps to be too wide to address only with training.
However, companies should be aware of the impact new hires have on business operations. Research shows that hiring new employees causes a significant dip in productivity. For example, a 2024 paper on new hires and firm productivity showed that increasing the share of new hires by 10% decreased productivity by 3.4% in the first year. The impact is even greater when new hires come from unemployment. In this case, productivity was reduced by 5.6%.
Your hiring process must be thoroughly planned to ensure you hire the candidate with exactly the right skill set for the role. You may need to modify your current hiring process to screen for specific skills. For example, a company looking for strong negotiation skills could role-play a scenario to test each candidate’s skills.
Find skills gaps and close them with the right training
Conducting a comprehensive skills gap analysis enables organizations to gain valuable insights into their workforce’s strengths and weaknesses. This information can be used to develop targeted training programs, improve employee performance, and achieve strategic goals.
Organizations that invest in employee training and development create a highly-skilled, engaged, and adaptable workforce. A continuous focus on skill development is essential to remain competitive in today’s rapidly changing business landscape.
