Before the decade is over, millions of jobs will either disappear altogether or morph into different jobs. In addition, millions of new jobs will be added, many requiring new skills.
Rapid technological advancements and the increasingly automated world in which we operate are driving this fast-moving trend. This new world, by the way, isn’t theoretical – it’s here right now. To remain relevant and competitive, companies must ensure that their employees update their core skills and competencies, and acquire new skills designed for this new world.
The starting point for this important internal investigation is to conduct a skills gap analysis. This extremely insightful tool can point the way forward for the organization and individual employees. If you haven’t done a skills gap analysis before, it might seem like a big undertaking. Not to worry; in this post, we’re going to break it all down and show you a simple and straightforward process that your team can use as a training needs analysis template.
But before we dive in, let’s get on the same page as far as what a skills gap analysis entails and what makes it such a valuable tool.
What is a Skills Gap Analysis?
A skills gap analysis is an important tool used by companies to identify skills-related gaps and needs within an organization. When employees lack skills that are required for a particular project or job, that’s a skills gap.
At the macro level, this means determining the skill sets and knowledge assets that are currently missing throughout the organization versus those skills that will drive your organization’s future success.
At the micro-level, it’s all about identifying skills gaps at the individual employee level that are aligned with your organization’s strategic objectives and priorities.
Why Conduct a Skills Gap Analysis?
A skills gap analysis is valuable because it provides a competitive advantage while helping to prepare and position companies for future success.
A skills gap analysis can also increase employee productivity and significantly reduce costs. When your team lacks critical skills, it likely means having to hire from the outside to find someone with the right skill set and experience. When this happens, it increases your labor costs and reduces productivity. You can reduce these costs and increase productivity by ensuring your employees are equipped with the success skills that they need now and in the future.
Employees, especially millennials and even younger members of Generation Z, place great value on training and skills development. When they feel their skills and abilities are stagnating, they will look for the exit. When their training and retraining is relevant, engaging, and experiential – like a learning management system (LMS) provides – they are more likely to stick around. Another outcome of conducting a skills gap analysis is that it can make individual learning and development more personalized and strategic, and can help reduce the amount your company spends on recruitment.
Who owns the analysis? Different stakeholders, depending on the skills you’re measuring and the departments that are represented. As you might expect, human resources will play a main role in coordinating the process, and learning and development must also be involved. When it comes to evaluating individual employees, their respective managers should lead the charge.
How to Conduct a Data-Driven, Skills Gap Analysis
Here are four key steps to conducting a skills gap analysis at your own organization.
1. Ensure Strategic Alignment
Start with the big picture: what are the company’s vision, mission, and business goals? Always keep this in the back of your mind, throughout the training gap analysis process.
What key skills are needed to fulfill your mission and achieve your business goals?
Once you identify a skills gap, ask if it’s directly relevant to advancing or achieving specific business goals.
2. Collect and Analyze Data
Get baseline data by measuring existing skills and competencies and the level of proficiency required for each.
Determine the skills and competencies each employee is currently using to carry out their job. Then, develop a list of the specific critical skills that you want to measure. Prioritize that list in terms of importance – this will vary based on what departments and teams are doing the rating.
- How will the required skills and abilities change over the next ten years?
- What jobs and tasks in your industry – and in your company – are likely to be automated?
- What are the trends just around the bend? How will legal, regulatory, and political changes impact what your company does and how it operates?
3. Assess and Evaluate
The goal here is to review your data to identify critical skills gaps. Rate your employees, objectively, according to their level of competence for each critical skill. Be as specific as possible. For example, instead of trying to measure employees’ communication skills, evaluate instead how well they communicate with customers, during meetings, or with members of the media.
Surveys and quizzes can be used to test competency levels. Many of your employees who think they know Excel will be shocked to learn that their knowledge is more limited than they realized! Or, maybe one of your employees is a project management whiz that you’ve been underutilizing.
4. Close the Gaps
Strategies and interventions to narrow the gaps will depend on your findings in the analysis step. Here are some commonly implemented interventions:
- Training and development: This involves training existing employees to develop relevant hard and soft skills to apply now and in the future. Based on the analysis, a personalized training plan, or a plan to re-train employees for different positions, may be recommended.
- Job Redesign: As automation and other technologies become more widespread, HR and department managers will need to rethink and redesign jobs.
Consider Recruitment Ramifications
Once the skills gap analysis is completed, your findings should be a significant factor in future recruitment and hiring decisions. Does candidate A possess the critical skills that the position requires now and in the future? If not, are they trainable?
Diversity may not technically be a skill, but for those companies that value inclusion and equity, it can be a competitive advantage and also help with recruitment. If your organization is experiencing a diversity gap, then strategies that can help close the gap – like diversity or sensitivity training – should be part of this conversation.
Skills Gap Template
Conducting a skills gap analysis may seem like a daunting task, but with our easy-to-use template, you can navigate the process with confidence. Use World Manager’s skills gap analysis template to improve your training!