What is a Skill Gap Analysis & How to Perform One Effectively

A skill gap analysis can determine whether you need to do something about your company’s current level of skills or whether you’re doing just fine with where you’re at right now.

Research shows that 64% of businesses consider workforce reskilling a top priority. If you haven’t tried conducting a competency gap analysis yet, you might want to consider performing one.

This article will guide you on what a skill analysis is, why it matters to your company, and how to do it effectively to strengthen your workforce and help your company thrive.

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What is a Skill Gap Analysis?

A skill analysis refers to an assessment of the skills you need to achieve certain goals and how your current skills stack up to those required to meet your objectives.

It measures your organization’s current skill set and compares it to what your organization needs to be successful.

This process involves going through your skills, strengths, and experiences to determine which ones you need to improve on.

Furthermore, it entails information on the things holding you back from performing at your full potential in the workplace.

Thus, a competency gap analysis can show you can overcome those barriers or learn those new skills that will help propel you forward in your career.

Why Does it Matter?

A skill gap assessment aims to help you identify the skills your company has and those that are lacking.

For instance, suppose you find that employees lack judgment and decision-making skills, you may choose to provide business-related or leadership and managerial training to fill these gaps.

It lets you know the costs associated with bringing in outside experts to fill these gaps.

The best candidates you bring in might not stay if they don't feel like they're learning anything in a non-competitive environment.

After all, the workplace should be an incubator for growth—without exception.

A comprehensive skill analysis will also give you insight into the potential growth potential of your company and its existing markets. It lets you know where there are opportunities for expansion and where your organization might be missing critical pieces of the puzzle.

This sort of report is necessary for many different situations, but it’s especially critical if you’re opening up a new business or want to start planning for future growth.

Many businesses run into issues when their current employees don’t have the skills required to continue growing, and a competency gap analysis helps with that problem.

4 Steps to Conduct an Effective Skill Gap Analysis

A skill gap analysis can be performed on both personal and business levels to determine any gaps in your skills that need to be filled.

Most businesses conduct skill gap analyses to ensure that the skills of their employees align with the company’s goals and vision. In contrast, personal skill gap analyses can assist you in making sure you’re adequately prepared to reach your career goals.

By determining your strengths and weaknesses, you can make the necessary adjustments to prepare yourself to achieve your goals in life and at work.

Assessing your skills and knowledge regularly is essential for career planning and advancement.

You can think of a skill gap analysis as taking inventory of your skills and the skills you need or want to develop.

Follow these steps on how to conduct an effective skill gap analysis.

Step #1: Plan and define your goals

Before conducting a skill gap analysis, you'll need to plan it out.

You'll need to set aside some time and develop a list of skills that are important for the position you're applying for and those you'd like to have on your resume when you're ready to apply for jobs.

This can be done by looking at the skills of top performers in your industry or profession or by researching your team members' skill sets.

You might also want to create a list of goals you want to achieve or questions that will help guide you through the process, including what you hope to learn.

Step #2: Make a list of essential skills required to reach your goals

Once you've planned out your skill gap analysis, it's time to identify which skills are most important for your team's success in the future.

You should do this by identifying three or four key competencies that are currently missing from your workforce and then brainstorming ways these competencies could be developed within an organization.

Step #3: Measure the current skillset using a variety of sources

Next, measure how much each employee has mastered their chosen skill set; this will help you determine which employees need more training or coaching to reach their full potential.

A good measurement tool shows how far along employees were when they started learning each skill. This could include:

  • Skills management software
  • Surveys
  • Assessments
  • Questionnaires
  • Interviews
  • Performance reviews

Step #4: Decide Whether to Train or Hire

You can fill skills gaps by either training or hiring.

Training is often the most cost-effective way to address a skill gap. According to research, 77% of employees are willing to learn new skills or be retrained.

A recent report also shows that 82% of employers and 62% of recruitment directors believe that employees might need to upskill annually to keep their competitive edge in the global market.

If you're looking to train employees in new skills, consider how long they'll need to be prepared for before they can use those skills in their work.

Suppose it's just a matter of giving them more time at work with their current responsibilities, then training may not be necessary.

And if you plan on hiring someone for an open position, you'll want to ensure that person has enough experience in the role being filled so that they can perform competently at their job.

On the other hand, hiring is an excellent option for filling skill gaps when there are no other viable options available or when an employee needs more time than can be afforded through training alone.

Hiring will also save money over time because it doesn't require ongoing investment into training materials or steady salary increases.

It's vital to review the resumes of potential candidates and look at whether they have the experience that aligns with what you're looking for before moving forward with interviews.

If possible, create a short list of qualified candidates who would make good additions to your team and rank them based on which ones would be the best fit for your company.

Mistakes to Avoid When Conducting a Competency Gap Analysis

When conducting a skill gap analysis, it's important to avoid common mistakes that can render the exercise pointless. Here are some common mistakes to avoid:

Relying on one source of data. Be sure to consult multiple sources to get a well-rounded view. Third, be aware of any bias in your data.

Assuming what you know about your organization and employees is accurate. Gathering feedback from employees and outsiders can help highlight inaccuracies in thinking and gaps in knowledge.

Conducting an unsophisticated skill assessment without first determining organizational goals or objectives.

Asking for specific skills or job descriptions instead of using more open-ended questions. The latter allows respondents to better respond with their strengths instead of simply providing an answer that doesn't reflect their strengths.

Neglecting to assess past skill performance data when completing a skill gap analysis. Collecting past performance data helps establish realistic expectations. Often, individuals will focus on future-focused solutions instead of acknowledging what they've been doing successfully thus far.

Taking shortcuts when defining the desired outcome or solution - do not underestimate how significant small decisions can be. Consider all options before deciding on any one course of action so you're confident in the best choice.

Skill Gap Analysis: Quick Guide

  1. Define the goals you want to achieve. What do you hope to learn?
  2. Make a list of the skills required to reach those goals.
  3. Gather data from a variety of sources. This could include surveys, interviews, focus groups, and observations.
  4. Be clear about what skills you're assessing. Identify both hard and soft skills.
  5. Evaluate your current skill level for each item on the list.
  6. Determine gaps between your current skills and the desired skills needed to reach your goals.
  7. Compare the current state with the desired state.
  8. Create a plan for acquiring or improving the necessary skills.

This same strategy can also be used when you want to see what gaps exist in your skills.

By filling out this information regularly, you are able to track how much your skill set changes. Any time there is a change, you can investigate why it occurred.

This is important because by tracking the changes in your professional skill set, you can start planning to fill in any gaps that may be present within your skill set.

Skill Gap Analysis: Final Thoughts

The skill gap analysis will help your team understand where they need improvement and how to fulfill their duties.

With the information you gather from this exercise, you can begin to develop strategies to close gaps in your workforce skills.

And by closing those gaps, you can raise the level of quality in your processes.

Ultimately, when these strategies are used collaboratively, they can help every team member improve their performance—no matter their position in the organization.

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