What is a skills gap analysis?
A skills gap analysis is a tool used to identify what skills or knowledge an individual, department, or organization needs to carry out responsibilities to the best of their ability. Once a skills gap analysis has been completed, managers, HR, and C-suite leaders can implement upskilling, reskilling, and learning and development investments to ensure the skill gaps are closed. A skills gap analysis is used for identifying missing soft skills such as leadership, communication skills, and problem-solving, and hard skills including coding ability, computer skills, or critical skills specific to the industry. There are three steps to performing a skills gap analysis: identifying the necessary skills, assessing the skills of the individual or department, and creating a strategy to fill the gaps.
Why is a skills gap analysis important?
The workforce is changing due to the increase in automation, technological developments, and digital transformation. The World Economic Forum Future of Jobs Report 2020 estimates that by 2025, 85 million job roles will disappear, while 97 million new ones will be created. For organizations, this means that while some roles will no longer need to be filled, many others will see a change to their core responsibilities and skill requirements. A skills gap analysis enables organizations to:
- Maintain a competitive advantage
- Gain insights into the entire workforce
- Strengthen the workforce through efficient and targeted training
- Support their strategic workplace planning and recruitment efforts
How to complete a skills gap analysis
A skills gap analysis is commonly performed across two areas:
- Individual, to identify which specific skills are required to perform their job and which skills they are missing.
- Department/organization, to identify where missing skills will impact future projects and goals, and if the missing skills need to be filled through recruitment.
Individual Skills Gap Analysis
An individual employee’s skills gap analysis is carried out by their manager, team leader, or department head. The analysis is performed when there has been a change to an individual’s responsibilities or role, after a performance review, or when there are new skills required for professional development, promotion, or to undertake a new project. The response to identifying skill gaps for an individual is to provide training, implement mentoring initiatives, or move the individual into a role better suited to their current skill set.
Departmental Skills Gap Analysis
Identifying skills gaps at a department or company-wide level is carried out by the departmental head, the HR department, C-suite leaders, or by an external consultant. A department skills gap analysis is performed when problems for meeting business objectives have been identified, there has been a shift in strategy, or when new technologies are implemented. To fill the identified gaps in a department often organizations turn to recruitment, however training programs, and mentoring initiatives are also successful routes.
Although hiring is a common method of filling skill gaps, there is an ongoing argument around the expectations of organizations that state their skill shortages are down to a lack of job-ready candidates. As a result, an increasing number of organizations now believe that finding the best culture fit is more important. According to the Monster Future of Work Report 2022, 70% of employers have reported they are willing to provide training to the right candidate.
Identify the necessary skills
The first step in performing a skills gap analysis is to identify what skills are most important. To ensure an effective analysis, answer the following questions to determine which skills are required now and in the future:
- What is our mission as an organization?
- What are the business goals we need to achieve?
- What are the important skills required to meet our business goals and carry out our mission?
- What skills are being written into job descriptions?
- How are jobs in the organization likely to change in the future?
- What skills have seen an increase in demand across the industry?
- Will any new jobs be created in the near or distant future?
A skill can be determined as important if a task depends on the skill to be performed to a satisfactory level. For example, if an individual requires a certain skill to complete a task but is still able to complete the task to a good enough level, the skill can be classed as unimportant. If an individual cannot complete a task or the task is not completed to a satisfactory outcome, the skill should be deemed necessary. The employees tasked with carrying out certain tasks are also excellent sources of information for what skills they think they are missing. By surveying employees, you gain valuable insight, as well as improve engagement by encouraging them to contribute to the organization’s growth.
Assess the current skill sets
With an idea of what skills are most important, and by surveying employees to understand what skills they think are missing, it’s time to identify the level of existing skills. This information can be collected through additional surveys, collecting feedback from employee performance reviews, carrying out skill assessments, or by using third-party skill management software.
Measure and collect data around skill levels by creating an excel spreadsheet for each team member’s role that includes a list of skills specific to the role, the importance of that skill, the required level, and the current level. This can be done using a simple numeric scoring system, for example:
By using a system like this, it simplifies the process of identifying where employee training is required and what areas require priority.
Create a strategy to fill the gaps
There are several strategies that can be put in place to fill the identified gaps, hiring and training are the most common. Sometimes organizations may also choose to readjust current job roles or move individuals into a role that better suits their recorded abilities.
Training and Professional Development
More organizations are choosing to invest in learning and development opportunities for their employees. These opportunities can be enabled through workshops, access to online courses and training materials, attending events and conferences, creating mentorship programs, and enabling employees to gain certifications and career-advancing credentials. It’s important that training is focused around filling the identified gaps without creating wasted spend through ineffective training or learning skills that won’t be used. Research has shown that only 25% of corporate training currently delivered is considered effective, this led to an estimated $268 billion in wasted spend during 2020.
Sometimes the identified skill gaps are too broad to be filled through training alone and hiring is required. The data collected can be used to design job descriptions that target the missing skills and help to redesign existing job descriptions for future hiring needs. The hiring process may need to be revisited to ensure that when the right candidate is found they are ready to become operational and productive as soon as possible. This includes screening for the missing skills through skill assessments, using structured interviews, and reaching out to potential candidates that may already be employed.
Readjusting Current Roles
Sometimes it is necessary to redesign or readjust the current role to better suit the skill set of the employee and align with the targets determined when reviewing the organization mission and business objectives. This may involve the need for reskilling but can be delivered through on-the-job coaching, rather than through formal training.
How do digital credentials help to close skill gaps?
Individuals are keen to upskill and reskill, and employees are willing to implement learning and development opportunities but they need to align with the needs of learners. College enrollment is seeing decline as a result of pressures from the pandemic and slow economic growth. Traditional education in a lot of situations is too expensive, too slow, and doesn’t effectively prepare graduates for the increasingly segmented roles that exist today. Instead, candidates are showing a preference for microlearning opportunities that are more accessible and can be engaged with around their current work and life commitments.
Microlearning opportunities help organizations through the implementation of targeted training that helps to close skill gaps and prevent wasted spend, but it’s also important that learners gain something of value. This is where digital credentials can help. Certification programs and training opportunities that use digital credentials provide candidates with valuable awards that can be added to their resume to showcase their new abilities. They get the opportunity to celebrate by sharing their easy-to-verify, and secure digital badges and certificates to their personal and professional social networks. Candidates that receive career-advancing digital credentials are incentivized and motivated to complete their training programs and feel more engaged with their learning.
Digital credentials can also help to identify future skill gaps through detailed contextual information and skill tags. Demonstrable skills are included as skill tags on digital credentials which can be evaluated in performance reviews to show what additional skills the employee should obtain in the future. Where digital credentials have an expiration date, this can help strategize around when to implement reskilling opportunities.
A skills gap analysis is an important tool for identifying the required skills across the workplace and where these skills are missing. Using a gap analysis, organizations can create strategies to fill the skill gaps through training, recruitment, and job redesigns. A skill gap analysis should be carried out to enable employees to pursue professional development opportunities and strengthen the department and organization as a whole.
Digital credentials help to close skill gaps by providing employees and employers with incentivizing digital badge and certificate awards to showcase the efforts of their training and development. The digital credential awards can be used to evaluate future skill gaps, strategize when to reskill or redeliver training, and better engage learners throughout their training.
To learn how Accredible can help you deliver digital credentials for your training programs, book a platform demo to see the Accredible solution in action. Or sign up for a free account with the ability to deliver digital badges and digital certificates to up to 20 unique recipients.
Learn more about how professional certifiers use digital credentials, the challenges of credentialing, and how digital credentials better serve professional and product certification in our Professional Certification Using Digital Credentials Guide.
In this guide, research how to:
- Identify the challenges professional certification faces around credentialing
- Implement solutions for secure, verifiable credentialing
- Launch easy-to-manage, scalable digital credentials for candidates
- Plan effective digital credentialing programs that motivate and engage learners