Skills Gap Analysis: Definition, Benefits & Methods
As a human resources manager, you’ve been hearing more and more about skills gaps. But what, exactly, is a skills gap, and how do you address it?
A skills gap occurs when your organization needs skills that your employees don’t possess. For example, imagine your small business experiences a boom, and you’re suddenly able to set aside money to run an advertising campaign. However, nobody who currently works for you has skills in marketing. Because there’s a skills gap, you find yourself looking outside the company for help and probably paying more for work that could be done in-house.
The same can be said for technology. In fact, technology is an area where skills gaps are most prevalent. But unless you run a skills gap analysis, you aren’t going to know where your company’s opportunities for improvement exist. While there are both pros and cons of skills gap analysis, overall it’s an ideal method of identifying areas for improvement. But where should you focus, and how do you begin? We’ve outlined the skills analysis methods that work the best:
- Identify the skills currently needed to run your company and the skills you foresee needing in the future.
- Assess your workforce to discover which skills they currently possess.
- Compare the skills your workforce has with the skills they’ll need going forward.
- Devise an action plan to span those skills gaps.
This is a simplified version of a skills gap analysis, and it’s one in which every company should invest.
Because it’s estimated that by the year 2030, roughly 1 billion workers will require reskilling. This is according to the World Economic Forum, and it’s a foreboding statistic for those companies with a history of being resistant to change.
Examples of Skills Gaps in the Workplace
One of the biggest benefits of gap analysis is that it uncovers the weaknesses that exist within your company. Examples of skill gaps in the workplace include inadequate or obsolete skills in technology, out-dated ideas on workplace inclusion, lack of strong leadership skills, lack of effective communication skills, and lack of soft skills such as management, flexibility, and critical or creative thinking.
Even the strongest companies may be surprised to find, upon analysis, that they have widening skills gaps. This often happens simply because the nature of work, especially in science, technology, and medicine, is continuously advancing. As a hiring or HR manager, you may feel your hiring practices preclude the need for upskilling and reskilling of your existing workforce, but more often than not, these gaps exist where you least expect to find them. This is why it’s vital to perform a routine skills gap analysis at somewhat regular intervals and to devise an effective strategy for addressing gaps where they exist.
Business News Daily has identified several critical industries in which skills gaps are widening exponentially. They include:
- Machine learning
- Cloud migration
- Big data
- Advanced manufacturing
- Computer technology
If your organization relies on one or more of these industries, you may be harder hit by widening skills gaps than you foresee. Therefore, it’s more important than ever to invest in analytical tools, such as skills gap analysis, if you hope to remain competitive in a 21st century world.
Skills Gap Analysis Tools
In reality, there are multiple ways to measure the competencies of employees, but computer programs are the ideal skills gap analysis tools. And the best programs allow the employee to see where their own skills are lacking and take steps to fill in the holes. This type of software goes hand-in-hand with career-pathing, and it’s a very effective tool for closing skills gaps. Mostly, because workers can see, first-hand, where they lack experience and what benefits they can reap by correcting the deficiency.
The right software can collect data, interpret data, make predictions, and identify areas for improvement. It can give you a detailed skill gap analysis report that drills down on the exact skills you need to nurture. Using this valuable information, you can then devise methods for closing skills gaps in critical areas through a variety of tools and methods, such as: Training sessions, mentors, internships, employee development tools, employee certification classes.
There are as many methods of closing skills gaps as there are of measuring them. But skill gap analysis tools such as a skill gap analysis questionnaire and career-path software must be utilized before resolution can begin.
If you own or manage an organization that you’d like to see flourish over the next decade, now is the time to begin thinking about and addressing skills gaps. Tomorrow’s jobs could look vastly different from today, requiring innovation and a flexibility previously unknown. Make sure your company is ready to hit the ground running by assessing the skills and competencies your employees have and comparing them with the skills your company will need going forward. A skills gap analysis is the most logical place to begin.