A thorough skills gap analysis should be a part of every employee onboarding effort. It should be periodically revisited to ensure that everyone possesses the necessary aptitudes for their job. But what is a skills gap analysis? And how do you go about conducting one?

What is a skills gap analysis?

A skills gap analysis is a means of assessing areas for improvement in the skill set of an individual or group. In other words, it examines the current skills and asks, “What’s missing?”

As part of an effective skills gap analysis, an organisation must:

• Determine all skills that are relevant to the job role.
• Determine which of those skills the employee/team already possesses

Equipped with this information, the company can pinpoint areas where additional frontline training or support is required.

How is a skills gap analysis useful?

A skills gap analysis helps business leaders recognise potential weaknesses and missed opportunities within the organisation. It equips management with a valuable roadmap for improving the existing team via new training opportunities. It also helps recruiters determine new hiring priorities or fine-tune their recruitment efforts based on skills that need to be added within the organisation.

For example, let’s say that a grocery retailer wants to transfer some cashiers to the deli in response to a labour shortage. With the help of a skills gap analysis, managers can determine the most important areas where additional training is needed before the cashiers are transferred.

The durable skill connection

Although a skills gap can highlight lapses in essential job-related proficiencies, it’s also — and perhaps more commonly — a way of identifying setbacks in durable skills. Durable skills are those universal skills invaluable in every profession, such as communication, leadership, time management and conflict resolution. Perishable skills, on the other hand, are those skills that have a shelf life based on workplace changes.

Research from Leadership IQ indicates that 46% of new hires fail within 18 months on the job—and 89% of those failures result from poor soft skills or durable skills. A skills gap analysis can identify these potential vulnerabilities early on, enabling management to provide any necessary employee training or support. This simple measure can reduce turnover rates and contribute to a more productive, confident workforce.

When is a skills gap analysis necessary?

A skills gap analysis can be conducted at any time, but it’s especially useful when specific opportunities for improvement are solicited or identified.

For an organisation, a skills gap analysis may be necessary when:

• Recruiters are trying to determine hiring priorities (i.e. which job roles take precedence)
• The organisation is falling short of its goals, projections or benchmarks
• The organisation is looking to update its training materials
• The organisation is seeking to remedy a high turnover rate
• New departments, service lines or objectives are being introduced into the organisation
• The organisation conducts a quarterly, annual or non-routine SWOT analysis to audit its overall market competitiveness

For an individual employee, a skills gap analysis may be necessary when:

• The employee was recently hired and is undergoing initial training
• The employee is taking on new duties or job responsibilities
• The employee is on a career development path for a promotion or raise
• The employee has received an underwhelming performance review or is otherwise struggling with their performance

How to conduct a skills gap analysis

A skills gap analysis is a three-step process:

• Identify the skills required for the position
• Measure the skill levels of the employee
• Take appropriate action based on the data

Once you’ve completed the first step, you can revisit the second and third steps as often as needed.

Identify the skills

For whichever job role(s) you’re assessing, the first step is to identify the critical skills that are required for that position. Executives, HR representatives and team leaders will come together to compile this information based on their shared expectations and understanding of the various roles.

When conducting a skills gap analysis, create two separate lists: “Required Skills” and “Beneficial Skills.” This will allow you to upskill and grow your employees even if they already meet basic expectations.

For example:

Contact centre representative 

REQUIRED SKILLS	BENEFICIAL SKILLS
Strong written and verbal communication	Strong conflict resolution skills
Excellent phone etiquette	Proficient in basic Spanish
Astute attention to detail	Familiar with WordPress
Proficient in Microsoft Office Suite	CPR-certified
Proficient in VOIP software

Your lists should include a combination of durable and perishable skills related to the job. 

Measure the skills

Once you recognise the skills the employee needs, the next step is determining which skills are already represented and which are in short supply. There are numerous ways to do this:

• Management Surveys. You can glean additional (and often, more valuable) insights by soliciting the feedback of those overseeing the employees in question. Reach out to managers, supervisors, team leaders and HR representatives to obtain their feedback on an employee’s (or the organisation’s) strengths and weaknesses from a skills perspective. If you have recent performance reviews available, you can review those as well.

• Quizzes. To test the skills directly, you can devise custom quizzes using skills management software or LMS software. If you have an existing learning platform, you can create new modules that are entirely quiz-based.

• Interviews. One-on-one employee interviews allow you to dig even deeper, covering the sort of ground that you would cover in both a survey and a quiz. You can solicit an employee’s concerns about their strengths and weaknesses while testing their proficiency in key skill areas.

• Training Reports. A well-designed learning management system should be equipped with reports and analytics that automatically identify skills gaps. Axonify provides leaders with a complete knowledge profile for every employee, so you can identify where additional training is needed. View customised dashboards that show you exactly how your training efforts are helping your specific business objectives.

You’ll ideally want to incorporate some combination of the above measurement methods. This will give you a fuller perspective of the strengths and limitations of the team member or organisation.

It’s also important to note that the manner of compiling feedback will differ depending on whether you’re assessing an individual, a department or the organisation.

If you’re assessing an individual

The process of collecting feedback is pretty straightforward. Use any combination of the methods above, and then rate the individual’s proficiency in all of the required/recommended skills.

If you’re assessing the organization or a subset of the organization

You’ll want to involve all the managers, team leaders and decision-makers. Employee and management surveys work especially well for this type of assessment. It’s a good idea to carry out this assessment as part of the quarterly performance review process, as you’ll have a lot of relevant, recent data at your disposal. You can even incorporate skills assessments into the performance review process and use that information to compile your comprehensive list of existing skills.

Take appropriate action

Once you identify your missing skills, there are several steps you can take to close the gap:

• Incorporate new training materials into your organisation. With our industry-leading frontline LMS, you have three simple options for expanding your training materials:
  • Import your existing training libraries (like SCORM modules and PDF docs) into our system
  • Build custom content from scratch
  • Import professionally developed training materials from our content marketplace, all of which are available to Axonify customers. Within minutes, you can expand your training library to account for the most skills needed within your organisation.
• Mandate additional training for existing team members using the materials you’ve created or imported. Team leaders can also provide in-person training and coaching where applicable.
• Hire new employees to fill major skill gaps. For example, if you determine that your organisation has a lot of tech-savvy designers/developers but needs a web security expert, consider hiring a cybersecurity analyst.

That last option might not even be necessary if you have a strong training system in place. In light of ongoing labour struggles more companies are shifting their focus toward building talent internally as opposed to dedicating resources to new hires. That’s where skills gap analyses are especially beneficial. They equip you with the information you need to strengthen your organisation from within, reducing both time and costs.

Devising an effective training plan to eliminate skills gaps

In nearly all cases, the solution to your skills gap problem will involve training. Even if your business strategy consists of hiring new employees, you’ll want to take steps to prevent the skills gaps that hindered your organisation in the first place. With that in mind:

• Maintain a master list of the required and desired skills for every position within the organisation. You can alter or expand this list over time as needed.
• Include all required and recommended skills in new job postings, and follow up on those skills when interviewing candidates.
• Ensure that your company training materials address all common skills gaps.
• Make skills gap analysis a natural part of every employee performance review. Not only will this help you to identify potential shortcomings before more serious problems arise, but it will provide your organisation with invaluable trend data.
• Prioritise skills-building as part of career development. For employees who want to move up the ladder, you can offer specific skills training as a prerequisite for advancement.

A skill gap analysis may be small but can set the stage for massive organisational improvements. And in today’s hyper-competitive work environment, you can’t afford to settle for less.