Why Do You Need Skills Gap Analysis

The skills gap is a concerning reality and a sizable challenge for both employees and employers. A Monster survey in 2021 revealed that 80% of employers had difficulty filling openings because of the persistent skills gap. 

The situation isn’t very different in 2024 either, with no end in sight to the ever-evolving technological trends. However, managers have found a way to combat this situation: skills gap analysis. 

This article covers the basics of skills gap analysis, how to conduct one, and other key details. Continue reading!

What Is Skills Gap Analysis?

Let’s start with the definition of the skills gap. It is basically a gap between employees’ skills and the organizational skills they must have to succeed.

Known by different names, such as training gap analysis and talent gap analysis, a skills gap analysis is a comprehensive process that helps employers and managers identify missing organizational skills among employees. It can be carried out to upskill employees or prepare them for upcoming changes, such as technology updates, strategy shifts, or new projects. 

A skills gap analysis can help improve both soft and hard skills, including digital communication, analytics, and project management. Different companies use different methods for this purpose, including the use of learning management systems (LMS). If you’re opting for this approach, selecting the right platform is very important. You can choose the right one for your organization from our LMS software category page. 

Why Do You Need Skills Gap Analysis?

Now that you understand the meaning of the skills gap and the competency gap analysis, let’s shed light on why organizations actually need one. 

When you conduct a training gap analysis, you gain insights into your team's abilities. This puts you in a better position to identify employees with the most desired skill set for particular aspects of your business and those who lack the required skills.

This way, you can direct the training and development efforts accordingly, resulting in the optimal use of training resources.

With a training gap analysis, employees become aware of the skills they lack or areas that need improvement for their current or future roles. This information makes it easier for them to take targeted actions toward their professional development and seek relevant training opportunities. This boosts individual learning and growth, benefitting them and the organization they work for in the long run.

Strategic workforce planning mainly pertains to ensuring you have the right human resources with the right skills in your company. However, without knowing where you stand in terms of employees’ competencies, it’s challenging to plan and make decisions regarding the company’s future.

This is where a skills gap analysis can come in handy. It helps you identify which key roles lack core skills and competencies, providing you with a baseline for setting future goals and defining standards for achieving them.

Successful completion of a skills gap analysis will enable you to understand your team's strengths and weaknesses. Furthermore, you will be able to better train your employees and help them acquire the required skills that can benefit your organization.

This, eventually, will give you a competitive edge as you will have professionally trained employees in your team working optimally toward achieving your organizational goals.

How To Conduct A Skill Gap Analysis?

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After understanding the utility of a competency gap analysis, it’s time to create one for your organization. You can do this by following these steps:

Plan 

The process begins with comprehensive planning. Generally, a skills gap analysis can be carried out on either an individual or team level, and in some cases, it can be deployed on both levels. 

The individual level focuses on an employee's skills, which are then compared to the skills required for a particular job. Usually, a team leader leads individual-level skills gap analysis. It is required in cases of poor performance reviews, changes in employee responsibilities, or a need for new skills for a new project or promotion. 

However, the team level focuses on a higher-level view of the skills necessary for working on a project. It can also be used to successfully run a team or an entire organization. The HR department, team leader, or an external consultant oversees the assessment, usually carried out when the organization is struggling with meeting business goals or using new technologies.

It is important to communicate with the relevant stakeholders, depending on your selected level, during the training phase. It will help the team to be on the same page. 

Identify Critical Skills 

The next step is identifying the critical skills required to successfully meet business objectives or complete a project. While doing this, consider the skills that the organization may need to meet future goals. 

Taking into account the following factors will help you in this regard: 

  • Core skills valued by your company 
  • Skills required to stay competitive in the future 
  • Must have skills for employees to complete their jobs effectively 
  • Currently trending skills that can benefit your organization 
  • Potential job roles that can be automated 
  • New technology that employees need training for 
  • Potential job roles that the company might need soon 

Measure Actual Skills

This is an important step as without measuring actual skills, you wouldn’t know which areas need improvement and focus. 

Adopting different approaches can help you in this regard, including: 

  • Conducting interviews with employees 
  • Taking surveys and assessments 
  • Taking feedback from performance reviews 

Alternatively, you can take the help of assessment software for this purpose. 

Analyze Data

Now that you have all the data available, you need to streamline to benefit from it. This can be done by creating a skills spreadsheet in which you can rate an individual’s performance against a particular skill. This will give you a clear idea of their performance and where they lack.

Fill Skills Gaps 

At this point, you’re equipped with all the information you need to fill skills gaps. There are usually two ways to go about it: 

  • Train existing employees 
  • Hire new employees 

Let’s look at each one of them individually: 

Train Existing Employees 

As the name implies, this approach includes training your existing talent pool to close the skills gap. You can do this in different ways, such as conducting workshops, training sessions, and seminars.

Besides the aforementioned, educational materials and online courses can also help. Furthermore, certification programs and voluntary employee mentorship programs can be arranged to upskill the workforce.

In addition, you can implement a learning management system in your organization. This will streamline the entire process and help managers oversee the progress.

Hire New Employees 

This approach is suitable when the skills gaps are too significant to be filled with training. However, you may need to modify your hiring process to hire a new talent pool. 

For example, you can source passive candidates, use structured interviews, and add a skill assessment during the hiring process. 

Skill Gap Analysis Example 

The following skills gap analysis demonstrates the different skills required for a particular position and how an individual scores against them, giving managers an overview of an employee’s skill set. 

You can create a similar skills gap analysis template and identify the areas in your team that need improvement. 

What Are The Best Tools For Conducting Skills Gap Analysis?

Best Tools For Conducting Skills Gap Analysis

While the manual process of conducting a skill gap assessment can help, automating it saves valuable time and effort. You can do this by using a skills gap analysis tool. 

Here are some top-rated skill gap analysis tools you can choose from:

1. 360Learning 

An LMS at its core, 360Learning, has proven to be a vital tool for organizations when it comes to upskilling their existing teams. It prioritizes collaborative learning and boasts advanced features like authoring tools, instructor-led training, and blended learning.

The software stands out as it offers a higher degree of personalization. Learners can build their courses quickly and easily. It provides them with a detailed summary that helps them measure their existing skill levels. This summary presents a combination of self-ratings and manager ratings, giving them a clear view of their skills. Furthermore, it also suggests approaches they can follow to enhance their skills. 

2. iSpring Learn 

Suitable for small and large-scale enterprises alike, iSpring Learn is a trusted platform for creating and delivering e-learning material. From onboarding to compliance and partner training, it can help in all the relevant scenarios.

Above all, the software helps companies conduct skills gap analysis with its intuitive employee performance evaluation module. It enables learners to create a questionnaire, which can be shared with reviewers. The software then analyzes the results and generates a report automatically. 

Once the analysis is conducted and courses are designed, learners are notified about deadlines. It also provides them with a calendar featuring their scheduled sessions and workshops, making the process convenient. 

3. Entomo 

A trusted choice of renowned global brands, such as Audi, Bosch, and Johnson & Johnson, Entomo is a comprehensive performance management platform known for its skills gap analysis assistance. It uses disruptive technologies, such as behavioral science and augmented analytics, to help organizations achieve their goals. 

Previously called KPISOFT, the software offers Bi Analytics reports that provide learners and managers with hyper-personalized, actionable insights. It supports goal and objective tracking at micro-levels to improve each learner's individual performance.

4. iMocha 

It is a skills evaluation solution that helps organizations upskill the existing team and shortlist prospects for hiring new employees. Utilizing advanced talent development and acquisition tools, iMocha allows companies to gauge the skill competency of existing and potential candidates.

The software’s standout feature is its dedicated upskilling portal, enabling managers to map each employee’s growth and analyze the company’s overall skill level. It offers assessment reports based on pre and post-test evaluations. This helps in examining the impact of learning initiatives. 

5. Mettl 

Mettl by Mercer is a virtual pre-employment assessment platform that works by measuring core traits and acquired skills of candidates before they are onboarded to ensure they align with the company’s vision and goals. 

The platform features various online assessment tools to gauge candidate skills. It is AI-powered, which further adds to its utility. It is trusted by top organizations globally, demonstrating the credibility it has earned over the years. 

 6. MuchSkills 

MuchSkills is an innovative, feature-rich skill management tool that helps organizations identify and bridge skills gaps within their teams. It presents a visual representation of the workforce’s skills and competencies, enabling managers to get a clear understanding of the strengths and weaknesses of each employee. 

Boasting a user-friendly interface, the software follows a data-driven approach and offers robust analytics. It ensures better alignments of projects and tasks with the right individuals, thereby improving efficiency across the organization.

Empower Your Workforce With A Skills Gap Analysis

Now that you know how to perform a skills gap analysis, it’s time to put your knowledge to good use and create one for your organization. You can use an LMS or a skills evaluation tool to assist with this process. If you're having trouble finding the right tool, we're here to help. Call us at (661) 384-7070 for expert advice.