How to Conduct a Skill Gap Analysis in 2024 (+Template)
- Published:
- Updated: July 31, 2024
According to a Closing Skills Gap report, 69% of HR professionals surveyed said their organization faces a growing skills gap challenge, up from 55% in 2021.
A skills gap is a discrepancy between the skills required to work for a certain job or industry and the skills that job seekers or employees currently have. With the rise of digital transformation and emerging technologies such as cloud computing, AI, automation, and big data redefining work, skill gaps are becoming common.
A skills gap analysis enables HR and L&D teams to assess their employees’ competencies and knowledge, identify gaps, and target these gaps with upskilling.
In this article, we’ll explore the concept of conducting a skills gap analysis and creating an action plan to overcome the skill gap challenges and work towards building an efficient workforce.
What Is a Skill Gap Analysis?
Skill gap analysis is the process of identifying the difference between the skills currently possessed by employees and the skills needed to achieve the organization’s goals. This involves defining the necessary skills and competencies for various roles, assessing the current skills of employees through self-assessments, performance reviews, and standardized tests, and pinpointing areas where development and training are required.
The objective is to ensure that the workforce is adequately equipped to meet both present and future demands, enhancing overall organizational performance and achieving strategic goals.
The Importance of Conducting a Skills Gap Analysis
To maximize digital transformation ROI, remain competitive, and achieve business outcomes, organizations must identify and close skill gaps to ensure they have the talent and skillsets to succeed. Here are five reasons to conduct an annual skill gap analysis with your workforce.
1. Prepares for digital transformation
A skill gap analysis helps identify specific digital skills and competencies employees need to leverage new technologies effectively. This process ensures the workforce is ready to adopt and utilize digital tools and systems, ultimately enhancing productivity, innovation, and competitive advantage in an increasingly digital marketplace.
2. Helps HR teams understand the needs of their workforce
A skills gap analysis helps HR teams comprehensively understand the current capabilities and developmental needs of their workforce. By pinpointing specific areas where employees lack essential skills, HR teams can tailor training programs, employee development plans, and support mechanisms to address these gaps, enhancing employee satisfaction, retention, and overall performance.
3. Identifies organizational skill gap
A skills gap analysis identifies critical skill shortages that could impede business operations and growth. This enables leaders to proactively address these deficiencies, ensuring the organization has the necessary talent to meet its strategic objectives and maintain operational efficiency.
4. Enables investment in employee development and learning
A skills gap analysis highlights the areas where investment in employee development and learning is most needed. Organizations can allocate resources more effectively by identifying specific skill deficiencies and designing targeted employee development plans that enhance employee capabilities, foster career growth, and improve overall organizational performance.
5. Provides direction for employee hiring and recruitment
A skills gap analysis provides valuable insights into the specific skills and competencies lacking within the organization, guiding hiring and recruitment efforts. This information helps HR teams create precise job descriptions and recruitment strategies that attract candidates with the necessary skills, thereby filling critical gaps and strengthening the talent pool.
How to Conduct a Successful Skill Gap Analysis
While a skill gap analysis can be daunting for those new to the assessment, here are a few simple steps to get you started.
1. Identify current skills
Start by cataloging individual employees’ skills and gaps, as well as competence gaps and needs from an organizational perspective.
- Individual: Identify the skills a job requires and compare them to an employee’s actual skill level. You can gain valuable information for your skills gap analysis through information attained from turnover rates, unmet key performance indicators, performance reviews, exit interviews, 360 feedback, or behavioral assessments.
- Team or company: Determine whether your employees have the skills to work on an upcoming project or whether external hiring is necessary.
2. Identify future skills
Align your workforce’s skill set with the organization’s strategic goals and future projects. Identify the skills and competencies that will be necessary to achieve these objectives. This involves staying abreast of industry trends, technological advancements, and evolving market demands. Collaborate with leadership and department heads to understand the company’s future direction and the skills that will be critical for success.
3. Identify critical skills
Determine which skills are essential for the organization’s core functions and strategic initiatives. These vital skills are often tied to key business processes, competitive advantages, and essential job roles.
You can figure out the critical skills for your organization by asking questions such as
- What skills are most valued by our company?
- What skills do employees need to do their jobs effectively and efficiently?
- What skills are currently on the rise in the industry?
- Which positions could end up being automated?
- Are there any new technologies in the market that the workforce needs to be skilled in?
4. Ask for employee feedback
Engage employees in the skills gap analysis process by soliciting their input on current skills, perceived gaps, and areas for development. Employee feedback provides valuable insights into day-to-day challenges and skills deficiencies that may need to be apparent through top-down assessments. Use surveys, focus groups, and one-on-one interviews to gather comprehensive feedback.
5. Create a skill gap analysis plan
Develop a detailed plan to address the identified skill gaps. This plan includes specific actions, timelines, and responsible parties. It may involve designing targeted training programs, implementing mentorship or coaching initiatives, revising job roles, and hiring new talent to fill critical gaps. Ensure the plan is aligned with the organization’s overall strategic goals and includes metrics to measure progress and effectiveness.
Best Practices for Creating a Skill Gap Analysis Action Plan
Once you’ve completed the skill gap analysis process, it’s time to take the appropriate action to bridge these gaps within your organization. Here are a few tips for implementing a successful skill gap analysis plan.
1. Fill in the skill gaps with appropriate training methods
Identify the most effective training methods to address your identified skill gaps. The most effective training method will depend on numerous factors, like your organization’s maturity level, industry, current skill gaps and competency needs, employee preferences, and more.
A few of the most common training methods include:
- Traditional classroom-style training: Face-to-face learning and instructor-led courses ideal for foundational knowledge and complex topics that benefit from direct interaction with an expert.
- Online training: eLearning occurs via web browsers and allows learners to engage with training materials at their own pace via tools like learning management systems (LMS).
- On-the-job training: On-the-job training takes advantage of the 70-20-10 method of learning to provide more contextual employee training. The rule states that 70% of learning comes from real-life experiences and hands-on training, 20% from social interaction and peer-based learning, and 10% from traditional training programs. With on-the-job training programs, employees learn by doing, enabling them to master skills through hands-on practice.
- Mentorship and coaching: The coaching method involves an experienced professional—a supervisor, mentor, or veteran employee—who mentors or coaches an employee on specific job tasks and responsibilities.
- Simulation training: Simulation training lays out different scenarios that allow employees to practice tasks that mimic the actual work of their specific job’s role. This is an ideal training method for employees working in high-risk or high-stakes fields, such as pilots or doctors.
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2. Prioritize experiential learning
While educational courses and training materials are crucial to upskilling, traditional classroom learning is less effective than hands-on training. L&D content must be paired with opportunities to put the lessons employees are learning into practice.
Emphasize experiential learning, which involves learning through doing and practical experience. Job rotations, internships, shadowing, project-based assignments, and simulations can achieve this.
Experiential learning helps employees apply theoretical knowledge in real-world situations, enhancing their skills more effectively. You can encourage a culture of continuous improvement and learning by providing opportunities for hands-on practice and problem-solving.
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With Whatfix Mirror, create replica sandbox environments of your web apps and enterprise software for hands-on IT training that doesn’t risk live software usage. Enable employees to learn by doing with in-app guided experiences like Tours, Flows, and Task Lists.
3. Analyze training effectiveness
After implementing the training programs, evaluating your training’s effectiveness in closing the skill gaps is crucial. This can be achieved using various assessment tools, such as training assessments, post-training feedback surveys, performance metrics, and observation.
Analyze the data to determine whether the training improved skills and competencies. Based on the analysis, adjust the training programs to ensure they meet the desired objectives.
4. Make the skills gap analysis an ongoing activity
Ensure that skills gap analysis is not a one-time event but an ongoing process. Regularly reassess your workforce’s skills and competencies to keep pace with changing business needs and market dynamics.
Establish a continuous feedback loop involving periodic assessments, employee feedback, and performance reviews. This ongoing approach helps to proactively identify and address skill gaps, ensuring the workforce remains adaptable and capable of meeting future challenges.
Free Skills Gap Analysis Template
Download a copy of our free skills gap analysis template to start identifying your workforce’s skill gaps and creating appropriate action plans.
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Skill Gap Analysis Example
Let’s explore an example to see what a skill gap analysis would look like for your organization in practice. We’ll look at an example of an organization addressing a cybersecurity skills gap.
Objective: Improve cybersecurity measures by enhancing employees’ cybersecurity skills to address increasing threats and compliance requirements.
Step 1: Determine the cybersecurity skills required | Key skills identified:
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Step 2: Evaluate employees’ current skill levels | Findings:
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Step 3: Compare skill levels with the desired proficiency levels | Desired proficiency levels:
Skill gaps identified:
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Step 4: Create targeted upskilling plan | Action plan:
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Step 5: Track impact of upskilling | Monitoring tools:
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Step 6: Analyze the results after 12 months. |
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Conducting a skill gap analysis is crucial in ensuring that your workforce is equipped with the necessary skills to meet organizational goals and thrive in the ever-changing business environment. By identifying and addressing these gaps, organizations can enhance productivity, foster innovation, and maintain a competitive edge.
Leveraging a digital adoption platform like Whatfix can seamlessly integrate learning into your employees’ daily workflow, providing them with the resources they need right at their fingertips. Whatfix’s contextual, in-app guidance and real-time training solutions empower employees to acquire new skills efficiently and effectively, minimizing disruption and maximizing engagement. Furthermore, with Whatfix Mirror, you can create a replica sandbox environment of mission-critical applications (such as your CRM, ATS, or ERP) to provide hands-on training without risking live software usage.
Enabling your employees to learn in the flow of work creates a culture of continuous improvement and adaptability, setting your organization up for sustained success. To learn more about Whatfix, schedule a free demo with us today!
With a digital adoption platform like Whatfix, enable your employees with in-app guidance and contextual self-help IT support to accelerate the adoption of new software implementations, employee onboarding, change initiates, and more. Whatfix’s no-code editor enables IT teams with a no-code editor to create product tours, interactive walkthroughs, task lists, smart tips, pop-ups, self-help wikis, and more. Analyze and measure user engagement and software usage to identify friction points, measure digital adoption, and improve employee digital experiences.
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