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Skills Gap Analysis: A Blueprint for a Future-Ready Workforce

Talent Assessment | 8 Min Read

Skills Gap Analysis: A Blueprint for a Future-Ready Workforce

What Is a Skills Gap Analysis?

Skills gap analysis is a strategic approach to assess and bridge the skills gaps of your workforce. Skills gap analysis is a planned tool that gauges the difference between your organization’s current and the desired skills level, armoring you with the right information to make critical business decisions and become future-ready.

Skills gap analysis can be undertaken at two levels:

  • At an organizational or team level: Skills gap analysis at an organizational level arises in exceptional circumstances. For instance, the COVID-19 pandemic forced organizations to continue with their businesses remotely. Many organizations were ill-prepared for this life-altering shift. Some organizations conducted an organization-wide skill gap analysis to ensure a smooth transition and assess whether their workforce had the necessary skills to work efficiently and productively in a remote work setting. These skills included self-direction, stress management, collaboration, etc. Once they ascertained the gaps, they bridged them by providing online training, stress management workshops, etc.
  • At an individual/employee-level: Skill gap analysis is done at an individual-level often when there is a gap in the performance or the need to upskill someone for a future job role to ensure his/her role remains relevant. You can list down the skills required to perform a job role efficiently, assess the employee’s current skills level, and plan to traverse the gap. Skills gap analysis is essential for tech companies as frantic technological advancements are leaving some irrelevant. For example, Java releases an updated iteration every year, meaning products and teams highly dependent on Java need to update their skills annually to stay relevant. With advanced technologies such as artificial intelligence (AI), machine learning (ML), and the internet of things (IoT), etc., in the fray, frequent upskilling in tech-driven teams has become a necessity.

Skills gap analysis can feed into all HRM initiatives and decisions, ranging from recruitment, promotions to reskilling/upskilling, learning and development programs, and even leadership and succession planning. 

Skills gap analysis is a critical exercise from a business success standpoint. Whether you are a startup or a multi-national company, a products or services company, the future of work affects everyone alike.

Skills gap analysis is the blueprint of the bridge that will take your organization from the present to the future, ensuring that your employees’ skills are updated and relevant.

Skills gap analysis, also referred to as the competency gap analysis, ensures that your workforce’s current competencies are broken down at a team, job-role and individual-level, and then matched to the company’s future goals. Skills gap analysis not just puts employees under the scanner but also the organizational analysis processes, structures and technologies for a cohesive strategy on the road ahead. 

Skills gap analysis is the first step your organization should take toward a future-ready workforce. It lays down the ground for a fail-proof training program that considers the skills gap and the measures to plug them. Skills gap analysis is forward-looking approach to arm your employees with the right skills to reach their full potential and propel your organization toward the future. 

 


Why Is a Skills Gap Analysis Important?

Skills gap analysis is important, especially today when businesses are undergoing tremendous transformation due to automation and the changing nature of work. The future of work poses a threat to many jobs that may decline or drastically change. Employees will have to upskill or reskill themselves in the wake of rapid digitization. To accomplish this and remain relevant in the new era of work, organizations can build a bridge using skills gap analysis methods that connect their present to the future. 

The choice is always between recruiting and reskilling. However, according to Mercer | Mettl’s ‘Talent Assessment Practices report 2020,’ around 80% of companies prioritize in-house talent development over external hiring or onboarding temporary professionals. Such a trend further underlines the criticality of the skills gap analysis.

In the same report, we discovered that 47% of participants favored targeted skilling programs designed specifically considering the needs and requirements of the employee(s) in question. Participants’ other concerns were the absence of a skills gap analysis templatethe lack of an objective skills gap analysis process, and the unavailability of a sure-shot way to select the right people for reskilling. These pointers are fundamental to building an effective reskilling strategy and further accentuate the importance of skills gap analysis. 

Skill gap analysis is important because it provides a framework to structurally analyze how best to enhance employee skills, upgrade processes, improve response timings, and prevail in the future.  

Skills gap analysis benefits your organization in the following ways: 

Workforce Planning

Skills gap analysis is all about looking at the bigger picture while making small changes that eventually streamline the road ahead. However, you can only plan the road ahead and look at the bigger picture when you have comprehensive insights into your current state of affairs.  

You may want to automate your customer invoicing process, but you will first need to know the intricacies of the current processsuch as what software is used. Only then can you objectively find a way to take it to the next level.  

Similarly, understanding where your workforce stands on skills and competencies will dictate your next move toward employee promotions, development opportunities, or hiring. 

Skills gap identification fortifies workforce planning and helps you make the right people decisions, backed by tangible insights. Skill gap identification provides you an overview of your entire workforce, easily identifying employees who can help you achieve your business objectives and the ones that require the most training. 

Individual & Organizational Win-Win

Skill gap analysis fuels your learning and development engine, kick-starting it in the right direction. If done with the right expertise and attitude, it can boost individual learning and development.  

Competency gap analysis can be extremely beneficial for employees as it enables them to hone their skills for more challenging roles or better their performance in their current roles by plugging any gaps in their skills set.  

Skills gap analysis can help organizations invest in an employee’s career development needs, improving employee engagement, satisfaction and retention chances.

Competitive Advantage

The foundational belief of skill gap identification is to stay ahead of the curve and not lose the edge in the future of work. Competency gap analysis ensures that your workforce gets access to the right set of futuristic skills that prepare them to work at their optimal capacity even amid uncertain circumstances. This, in turn, ensures that your organization always plans and stays ahead of the competition. 

 


How Do You Identify a Skill Gap?

You can identify a skill gap by following a streamlined skills gap analysis process, which is about asking three significant questions: 

  • Where does your organization want to be? 
  • Where is your organization at present? 
  • How can your organization plug the gaps?

 

Where do you want to be?

Start by identifying short-term and long-term business vision and goals. This stage is all about scoping and contextualizing. This stage should help you in skill gap identificationYou should have a list of skills needed by your organization to accomplish its present and future goals. This stage should also offer a perspective on prioritizing the skills listed in the competency gap analysis template 

Other questions that need answers at this stage are: Which jobs are likely to be automated? What skills are most in-demand in the future of work? What skills does your company need to thrive in the future? You can break them down by job roles and levels – they can be soft-skills, relevant to all employees or limited to a team or department. 

You must ensure your skills gap analysis template and company goals are in synergy. They will give direction to everything that follows. 

 

Where do you stand presently?

Once you have set eyes on the future, start by finding the means to pave a path toward it. You must collect data on how your workforce performs a certain task, how important these tasks are to organizational success, what are their skill sets, and if there is a way to do the job better. 

Study each job profile and its function closely, and then assess your employees’ skills. To perform this step better, you will need to employ various skills gap analysis methodssuch as surveys, assessments, interviews, etc. 

Skills gap assessments are the quickest and most objective way to understand your employees’ current skill levels. Interviews and surveys can help you understand their personal skill preferences, career aspirations, and any obstacles they might be facing in their job role.

 

How to bridge the gap?

Once you have a list of the current and desired skills, you can use a table to identify the gaps between them. Based on this analysis, you can decide the next course of action. It could be training, courses and certifications, mentoring, shadowing, or extended assignments. In rare caseswhere skill is absent in your workforce, some skills or positions may require a fresh hiring approach. 

This skills gap analysis template simplifies the process of skills gap identification and offers the most suitable diagnosis.  

Each organization has different requirements. Thus, the intervention and diagnosis will also vary. You may have to redesign jobs in your organization to make them more relevant. You may choose to train or recruit, or both. Depending on your workforce’s abilities and their missing skills, the employee skills gap analysis template will point you in the right direction. 

 


Conclusion

Skills gap analysis is indispensable for your organization’s future. It serves as a blueprint for your organization and workforce to not just survive but thrive in the VUCA (volatile, uncertain, complex, and ambiguous) business environment. 

The skills gap analysis template documents your organizational potential, the existing roadblocks and the prognosis. The skills gap analysis template serves as a reservoir of data, which can take your organization to the next level while ensuring employee productivity, engagement and loyalty.  

Most businesses are overwhelmed in anticipation of what lies ahead. It is easy to get derailed and ambiguous with such levels of uncertainty. However, the best way to prepare for the future is to leverage the strategy of skills gap analysis to optimize your reign in the present and future. 

 


Skills Gap Analysis: The Mercer | Mettl Way

Mercer | Mettl’s skills gap analysis is a comprehensive solution that helps you at every step of the skills gap analysis process: 

Identify what to train – Undertake a competency gap analysis to invest in the right skills for the present and future. 

Identify who to train – Mercer | Mettl’s unique library of skills gap assessments help you target the right people for the right training. 

  • Learning agility assessments to identify agile employees who can learn quickly and effectively. 
  • Proximity Index to identify employees closest to the required skills set. 

Measure training effectiveness – Customized pre and post-training assessments to measure effectiveness. 

Individual and organizational development plans to improve performance and business outcomes. 

Mercer | Mettl’s competency frameworks and holistic assessments are customized to your organization’s requirements based on levels and roles. Mercer | Mettl’s robust platform enables an easily scalable skills gap analysis process. 

 


FAQs

What should a gap analysis include?

How can we reduce skill gaps?

What is a competency gap analysis?

Originally published February 10 2021, Updated February 16 2021

Bhuvi Kathpalia

Written by

Bhuvi is a content marketer at Mercer | Mettl. She's helped various brands find their voice through insightful thought pieces and engaging content. When not scandalizing people with her stories, you’ll find her challenging gender norms, dancing to her own tune, and crusading through life, laughing.

About This Topic

Skill gap analysis is a strategy that organizations use to future-proof their workforce. Skill gap analysis involves assessing the current skill levels of your workforce to be able to analyze the gaps and the proper diagnosis for bridging those skill gaps.

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