Skills gap analysis: Definition, Steps and Benefits Skills gap analysis

Skills gap analysis: Definition, Steps and Benefits


Table of Contents

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 the employees will 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 will be discussing the important reasons why your organization needs to run skill gap analysis frequently:

  • The idea of the workforce 

Skill gap analysis helps you have some insights on which employees are lacking 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.

  • 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.

  • Strategic workforce planning 

It also helps you 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.

  • Better recruitment 

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

  • 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?

  • Planning the analysis 

To start with the analysis, you need first need to narrow down your search. Define a goal you want to achieve and who do 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 are various departments missing. 

  • State a goal 

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

You can ask these questions:

  • What are the goals of the 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 goals?
  • Future of work trends 

Your organizations need to be running along with the future trends. There are so many new technologies 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 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. 

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  • 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. In such a way, you can make your employees future-ready.

  • 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.

  • 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 works. 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 the team needs to get their hands on the technologies that are going to be used.
  • 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 hire 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 the 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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