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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 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 a forward-looking approach to arm your employees with the right skills to reach their full potential and propel your organization toward the future.
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 template, the 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:
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 process, such 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.
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.
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.
You can identify a skill gap by following a streamlined skills gap analysis process, which is about asking three significant questions:
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 identification. You 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.
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 methods, such 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.
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 cases, where 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.
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.
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.
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.
A gap analysis should include the organization’s broad objectives for scoping, a detailed report documenting the skills necessary for being future-ready, and a comprehensive list of the skills possessed by current employees, using skill gap assessments, surveys, questionnaires, or interviews. Based on this, subject matter experts can analyze the best diagnosis for the gaps found in the employees of the organization.
You can reduce skill gaps easily through a streamlined skills gap analysis process: - Start by understanding your business needs and make a list of the skills required to stay relevant in the future - Conduct skills gap assessments to measure the current skill level of employees - Finally, identify the gaps using a standard skills gap analysis template and design action plans to plug the gaps accordingly.
A competency gap analysis is how an organization analyzes its future goals, required employee competencies, current employee competencies, and the best ways to minimize the gaps. The competency gap analysis template lists the desired future and current competencies and aims to find the critical gaps that may affect the organization’s future success.
Originally published February 10 2021, Updated May 3 2021
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.
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.