Skill Gap Analysis: Definition, Steps and Benefits

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In a rapidly evolving job market, the need for talented professionals is crucial. Employers are constantly looking for skilled individuals who can meet the demands of the workforce in time. However, often a significant gap exists between the skill required by the company and the skill possessed by the employee. This is the skill gap that can affect the business economy and an individual’s professional growth.

In this blog, we’ll explore the concept of skill gap analysis, its importance, and how you can perform it.

What is a skill gap analysis?

Skill gap analysis is a technique used by organizations to measure the gap between the skills needed and the skills currently acquired by the individuals working there.

The HR accesses the skill gaps of the employees so that they can gauge their performances and evaluate the lacking knowledge in the field. The authority later works towards building the bridge to fill these gaps by providing required skill courses, L&D investment decisions, succession planning and so on.

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Why do you need skill gap analysis?

World Economic Forum in 2018 stated that due to the increasing speed of technology advancements, at least 54% of employees would need to upskill or replace their competencies.

A lot is going on in the fields of automation and AIs. Soon there will be mass replacements of employees with technology. In such situations, the individual who keeps himself updated and upskilled according to the ongoing trends has a better chance of surviving the race.

In this section, we’ll discuss the key reasons why your organization needs to run skill gap analysis frequently:

01. The idea of the workforce

Skill gap analysis helps you have some insights on which employees lack important skills and which have aced them. You can accordingly plan your pieces of training and courses depending on how many employees need to learn the necessary job skills to get work done in the organization.

02. Motivate learning and development

When you point out what skills are necessary around the organization and when employees learn that they lack some of them, it motivates them to learn those skills and develop their portfolio.

03. Strategic workforce planning

It also helps to know how many employees you can count for a particular task having enough needed skills for the job. To plan your workforce for the future, you need to have some idea about where your employees stand right now concerning skills.

It allows you to develop training programs that can lead to upskilling and reskilling individual employees to achieve business goals efficiently.

04. Better recruitment

When you know what capabilities you are looking for, it automatically enhances your recruitment quality. You will employ those individuals who already have those skill sets and will have the upper hand on the tasks allotted.

05. Competitive advantage

When you have the required skills on your hand and when you can plan your workforce strategies for the future, you automatically stay on top of the race with your competitors, and it gives you an advantage.

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How to perform skill gap analysis?

Here we will look at a seven-step process to help you perform a skill gap analysis.

Planning the analysis
State a goal
Uncover work trends
Determine skills to be future-ready
Measure current skills
Find out the gaps
Act on the result

Let’s look into these seven steps into details to see how you can conduct a skills gap assessment.

1. Planning the analysis

To start with the analysis, you need first need to narrow down your search. Define an analysis goal you want to achieve and who you want to talk to. Skill gap analysis is generally done at two levels; individual level and team level. The latter will need you to talk to the team leaders across the organization.

Figure out what skills you are looking for and which skills various departments are missing.

2. State a goal

To be consistently growing, you need to set goals and benchmarks. Determine where your company is going and whether the employee has the required skills for it.

You can ask these questions:

What are the goals of your organization for the next 5 years?
Do we have enough skills to get there?
Which business areas are lacking the required skills?
What skills do the employees need to master to align themselves with the organization’s goals?

3. Uncover work trends

Your organizations need to be running along with the future trends. There are so many new technologies/software coming up, and it will be beneficial to adopt them along the way. To find the answers, you can ask questions like:

Which jobs can get automated?
Which skills are on the trend right now?
Which positions will the organization need in the future?

To gain knowledge on current and future trends in business sectors, you can study the internet, where so many articles show the future of automation and algorithms. You can also gather employee opinion on future work trends and their concerns regarding it.

4. Determine skills to be future-ready

With rapidly advancing technology, organizations find it difficult to catch up with the trends and upskill the workforce accordingly now and then.

As an organization, you can use skill gap analysis to detect these skill gaps in your employees and train them for the skills that you plan to update. Like this you can make your employees future-ready.

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5. Measure current skills

Evaluate employees’ KPIs to see how each of them contributes to the work organization does. Arrange surveys and assessments with the employees where they can openly tell about their weak and strong skills.

You can ask the employees about each other’s performance and skill gaps or ask the team leads to elaborate on the team’s overall skill contribution to the projects going on.

Leverage a survey software that enables you to conduct large scale employee surveys to conduct skills gap analysis periodically whenever there is a change in organization objectives, job roles, or industry trends.

6. Find out the gaps

This will be the phase of results. You will come to know where the employees are lacking and which department needs more attention concerning their work. The skill gap examples can be:

35% of the sales executive employees are not able to catch up with the new software that is introduced in the system.
48% of the customer service executives are lacking basic communication skills and might need soft skill development programs to go through.
By the next year, the task of database administration is going to be highly automated so your team needs to get their hands on the technologies that are helpful.

7. Act on the results

After the skill gap analysis has given its results, it is time for you to take action for the same. You can choose to do the following:

You can provide the training for the expertise yourself or by employing a professional to do so.
You can conduct workshops and courses for the employees every week, provided the requirement is slow.
You can also conduct employee mentorship programs and have the transfer skills and knowledge.
Involve employees in conferences and seminars to let them know about the trends and requirements that are discussed.
For the recruitment process, use skill assessments to filter out the candidates how are fit for your organization.
If your skill gap is too huge, consider hiring skilled employees and only those who will help you build a bridge quickly between your gaps.

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Conclusion

Skill gap analysis helps companies in two ways:

It allows company to ensure they have the right individual with the right skill to drive success.
It helps you uncover room for improvement between skills required and skill possessed.

This strategic workforce planning approach doesn’t only helps you address the immediate need of skilled professionals, but also invest in foresting a resilient and capable workforce.

FAQs

What is skill gap analysis ?

Skill gap assessment is a systematic approach to identify and analyze the difference between the skill required in a particular job and the skill possessed by an individual. The analysis assesses the existing skills of individauals and compare it against the desire skills needed to meet the organization’s objective.

What is the purpose of a skill gap analysis?

The purpose is to help professionals identify their gaps and pave the way for targeted learning and development of initiatives. It helps organizations to hire the right talent for the job and drive operational efficiency.

It helps job seekers/employees and organizations to identify and bridge the gaps with optimized initiatives.

How to perform a skills gap analysis?

The analysis involves a systematic process.

Define the desired skills
Evaluate the current skills of individuals
Compare the two to identify gaps
Prioirtixe the gaps based on its impact
Develop action plan
Implement the plan
Revaluate the progress

Who can benefit from skill gap analysis?

Individuals can use the insights to identify the skills they need to develop to pursue a desired career.

Organizations can use the assessment to ensure they hire a skilled professionals to address any gaps within the workforce.

What are some skill gap examples?

Here are some skill gap analysis examples to give you some examples of skills gap in workforce:

Technical skills: For companies that need skills related to software proficiency, programming language, data analysis, or project management, it can highlight the need for upskill in specific areas.
Soft skills: Skills such as critical thinking, problem-solving, time management, teamwork, creativity, and adaptability are valued across every industry. Pefromming a gap assessment can emphasize the what’s required to develop well-rounded individuals.
Customer service skills: Customer service is the face of the industy where empathy, active listening, customer-realtionship management, etc are core skills. An analysis can identify the area for improvement that can enhance customer satisfaction.

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