A Quick Guide to Performing a Skills Gap Analysis

January 18, 2018
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The primary objective of a skills gap analysis is to identify and fill capability gaps, whether through employee development and training, succession planning, mentoring, hiring or company reorganization. This analysis can help to pinpoint which of these solutions is best suited to address an organization’s needs.

Organizations of every size, in every industry should perform a skills gap analysis at least once each year. This project is vital to determining the gap between the skills needed and the skills available in the local workforce. Undertaking this work helps to ensure that your company is always adequately equipped to meet its business goals.

We see a strong correlation between companies that perform this analysis regularly—regardless of economic conditions—and business performance. For this reason, we recommend conducting the analysis when there are spikes in poor employee performance reviews, needs for new skills, changes in positional duties, corporate strategy shifts, new technologies being deployed, and organizational problems with meeting business objectives.

Here are the fundamental steps required to conduct a skills gap analysis:

  1. Identify Current and Future Skills Needs

One of the ways that market leaders become laggards is through complacency, and losing awareness about their business capabilities in comparison to competitors’. A good first step is to survey and interview all middle managers and company executives to assess which skills are necessary in each area of the business. Ask respondents to indicate areas of need and areas of relative strength or weakness relative to competitors. Many respondents may need to do some research and talk to industry peers in order to provide more informed responses.

Within each department, create a prioritized list of skills that are currently required, and another for anticipated needs. Ask respondents to assess on a scale of 1-5 how well the current staff meets these needs. In smaller organizations, you may just ask whether or the skills are already in place.

  1. Assess Positions, Responsibilities, and Employees

Once you have identified your organizational needs, the next step is to determine staff capabilities. Review the job descriptions of all current roles within each department and catalog the skills of each employee. Assess each individual’s capabilities on a 1-5 scale. Then make notations about each employee’s strengths and weaknesses in areas not directly related to skills. Consider willingness to be coached, intelligence, specific aptitudes required for the job, and attitude as components of this subjective evaluation. Managers should also note which skills are the most important for each position. Many companies use performance assessments for the skill evaluation and questionnaires and interviews for the individual assessments. Skills management software packages like Skills DB Pro can help with this step.

  1. Compile an Inventory

In order to track your company’s progress toward closing skills gaps, create an inventory by measuring any differences between needs and capabilities for each position. Use the same 1-5 scale, where 5 represents no gap and 1 represents no employee in place at all. Now you have a sortable list that represents your areas of need and can provide at-a-glance insights to human resources and hiring managers.

  1. Create a Skills Development Road Map

Using the inventory, determine which areas of need require urgent action. For these positions, collaborate with the appropriate hiring managers and teams to determine whether the quickest route to filling gaps is through training, mentoring, hiring, reorganizing, or any combination of these approaches. We have found that getting more employees involved in this collaborative step increases their engagement and their feeling of equity in the business and its objectives. Employees who are presently being overworked because of skills gaps are usually relieved to know that help is on the way.

Have you personally been involved in your company’s skills gap analyses? Share your experiences—including how you feel it benefits your organization—with us on Facebook!