What Is a Skills Gap? (With Definition, Guide and Tips)

By Indeed Editorial Team

Published 18 June 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Conducting a skill gap analysis is a process of evaluating an organisation's employees and identifying skills that company tasks require. Performing this analysis can improve the workplace and help achieve goals more efficiently. Learning about what a gap in employee skills is can also help identify hiring needs and develop training programmes to help yourself and your team members grow professionally. In this article, we define a skills gap, explain how to conduct an analysis with a step-by-step guide and share benefits and tips for conducting an analysis.

What is a skills gap?

A skills gap is the difference between an individual's skills and the skills a company requires for a specific role. Identifying gaps between team members' actual skill sets and the abilities necessary to complete various jobs helps organisations determine how to structure training programmes that support employees' skill development. Understanding the gap between staff members' abilities and the company's needs can help hiring managers find candidates with the necessary qualifications during recruiting and hiring activities.

When companies seek to identify this gap in abilities within the workplace, it's called a skills gap analysis. This process provides an objective way to identify company needs and helps the company begin the planning process for training programmes. Managers can also use the information from this process to create hiring goals and more specific job descriptions to post on job search websites.

Related: Hard Skills vs. Soft Skills: Key Differences and Examples

Benefits of a gap analysis

This analysis process is helpful to both employees and managers of the company. Here are some common benefits of conducting this analysis:

Provides insight into staff's expertise

An analysis of the gap in employee skills can help you identify which team members possess the highest skill levels for particular areas of the organisation's processes and determine what roles employees' skills are best suited for. Knowing the various skills and capabilities of the team is also important for focusing on areas for improvement. In some cases, you may find that your abilities exceed what's necessary for your role, which can lead to promotions.

Supports learning and development

Employees can use the results of their analysis to find out what skills they need to learn to fulfil their job requirements and advance in their roles. With the information that the analysis provides, you can support your team's development through individual improvement plans, training programmes and workshops that motivate and encourage higher employee productivity. This can help ensure everyone within the workplace can receive the support they need to excel in their roles, which can improve work quality and promote efficient practices.

Improves hiring and recruiting

Hiring managers can use the data from the analysis to find and recruit candidates with the required skills that fulfil various roles, helping the organisation meet its business objectives. This can help provide more job openings for the job market and increase diversity within the workplace, as hiring managers likely can search for candidates who have different skills and backgrounds than current employers. Using the analysis to hire candidates can help companies find candidates who can easily acclimate to the work environment and improve the quality of the company.

Serves as a foundation for planning

This type of analysis can help companies ensure that the skills and expertise of their staff meet the organisation's objectives for future growth. The analysis can also provide insights organisations can use when planning and implementing development programmes for employees. Planning training sessions for the development of specific skills can help ensure professionals are capable of completing their work to a high standard.

Related: How to Write a Staff Development Plan (With Example)

How to conduct a gap analysis

If you're interested in conducting a gap analysis of the company for which you work, consider following these steps:

1. Identify the organisation's needs

Use the organisation's needs to help you determine the skills and qualifications necessary for achieving its business goals. For instance, identify which skills the organisation relies on to meet objectives and use this information to assess which skills the employees of the company may need in the future. You can do this by examining the job descriptions of each position and making a list of the skills the professional in that role may need.

You might also consider areas in which the company might improve. For example, if the company's customer service satisfaction score is low, you might suggest the company find more employees with communication and customer service skills.

2. Evaluate the staff's current skills

Once you understand the organisation's current and future skill needs, assess the staff's current skills. In a technology company, for example, an evaluation of the staff's current skills can encompass specific applications like securing data files, designing databases or selling software products. The results provide insight into what skills employees still may need in order to fulfil business objectives more effectively. You can do this by conducting a survey to ask employees to identify skills they struggle with and compare their job performance with the description of their role.

Having an objective and fair way to measure employee skills in this step is important because it gives you a basic assessment of your colleague's abilities, which you can use in the next step.

Related: What Is a Performance Appraisal? (With Definition and Types)

3. Determine which skills employees need

Use the results of your analysis to identify which areas your team may need to improve so they can fill the gap. You can do this by comparing the list of skills your colleagues have to the list of needs the company has. For instance, using the example technology company, human resources managers might find that several junior developers need to develop their proficiency with a specific coding language.

When conducting this step, it's important to be constructive and objective when comparing a colleague's skill level to their job description. This can help create a healthier work environment and promote a dedication to learning.

4. Create learning and development plans

The information from your analysis can help you create and implement plans for improvement. With the data from your evaluation, you can determine what kind of training programmes, workshops or courses your team can benefit from in order to learn the required skills. For example, if a customer service team leader determines a need for improvement in sales techniques, the team can take part in a training workshop that helps them learn new strategies and communication methods.

5. Follow up

After implementing the development plans, continue to follow up with the progress of these plans. You can do this by conducting another analysis after a set period of time or by conducting surveys with your colleagues. Performing follow-ups on the development programmes can help ensure their efficacy and can help you suggest ideas for their improvement.

Tips for conducting the analysis

Consider these tips to help improve your analysis process:

Use internal tools and resources

Using internal tools and resources for development programmes can help save the company time and money. This also ensures that the company uses its resources wisely. For instance, senior team members can help train new and entry-level employees, which can help reduce costs for outside training materials and personnel. Relying on your internal resources also shows employees that maintaining company culture is your top priority.

Identify gaps in soft skill areas

Technical abilities, writing and role-specific qualifications are necessary to help your organisation achieve objectives. Though it's important to consider employees' soft skills, too, so you can understand how gaps in skills like communication, customer interaction and collaboration affect business outcomes. Soft skill training programmes can often be less time-consuming and expensive than training for technical skills.

Analyse each level of an organisation

When conducting a gap analysis, it's useful to look at each level within an organisation individually. This can simplify the process of recognising needs and skills that may be lacking at each level. Since lower levels of an organisation have separate duties and different requirements than that of higher levels, you may find it easier to evaluate the staff's skill set and create a development plan for a smaller group of employees.

Also, consider that different types of positions exist at each level in an organisation. For example, the lower level may have accountants and the highest level of the organisation may have a chief financial officer. Recognising different roles in your analysis can help identify training methods better suited to each employee to close the gap between an employee's skills and the company's needs.

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