How to Identify a Skills Gap in Your Business
The world of work is continually evolving. Who would have anticipated needing a Virtual Reality Developer 20 years ago? If your team is missing a specific skill or cannot find an employee with that skill, that means you have a skills gap.
You're not alone. 75% of executives currently experience a shortage of skilled workers.
Performing a skills gap analysis can help identify missing skills in your company. You can then use that information to help fill your skills gap.
Definition
A skills gap is defined as:
A mismatch between the skills employers rely upon and the skills that job seekers or current employees have.
A skills gap makes it difficult for organizations to run efficiently. If you think you might have a skills gap, you will want to perform a skills gap analysis.
What is a Skills Gap Analysis?
A skills gap analysis, or skills audit, is a process to determine the skills that your business needs. You need to decide which skills are important and where the shortfalls are. Then, you can create strategies to recruit, train, and retain employees.
A skills gap analysis will help define your company's needs. It will also determine what to train current employees on and help hiring managers know what to look for.
When to Conduct a Skills Gap Analysis
Regular skills gap analysis is a good idea to ensure the business' needs are being met. Still, you may want to perform one if any of the following match your business' situation.
You're Hiring for a New Position
If a new position becomes available, you may want to conduct a skills audit to determine the skills that current employees have and the skills you want new individuals to possess.
Current Employees' Positions are Changing
Shifts in employees' positions could be due to many things such as promotions, changing team strategies, or new projects coming up. Decide whether you want current or new staff to fill the new skills needed.
You Face High Turnover
If you're in an industry with high turnover, it could be beneficial to forecast unexpected turnover or upcoming retirements. Determine which skills you need to fill those positions to stay ahead of your needs.
You're Not Meeting Business Goals
If you're consistently falling short of your goals, you may have a skills gap. Complete the analysis to determine if possessing more skills would help improve business efficiency.
You're Implementing New Technologies
Integrating new technologies can be hard for some employees. Before implementing, ensure your team has the skill to learn and use the technology.
How to Perform a Skills Gap Analysis
There are many ways to conduct a skills gap analysis. We recommend following four steps: identify, prioritize, measure, and act.
1. Identify
Firstly, you'll need to determine whether you want to assess individual employees or a team. For individuals, measure the required skills and compare those to the current employee's skills. For teams, list the skills required for upcoming tasks and compare those to your team's skills.
To identify the skills you need, ask yourself two questions:
What does your business value?
What do your employees need to do their jobs well?
2. Prioritize
Rank the skills you identified in the first step from most to least important. Then assign the skill level you need. You can either measure it as "High, Moderate, and Low" or on a scale of 1 to 5. You can make a chart to visualize it, as shown below.
|
Priority |
Skill |
Skill Level Needed |
|
1 |
People Management |
5 |
|
2 |
Negotiation |
4 |
|
3 |
Conflict Management |
3 |
3. Measure
There are many ways to measure your employees' skills. You can use surveys, employee interviews, performance reviews, or HR software. Choose the best for your specific needs. You can make a table based on the above example, adding a column for your team's actual skill level.
|
Priority |
Skill |
Skill Level Needed |
Actual Skill Level |
|
1 |
People Management |
5 |
4 |
|
2 |
Negotiation |
4 |
2 |
|
3 |
Conflict Management |
3 |
3 |
4. Act
Subtract actual skill level from skill level needed to get the difference and determine what skills you need. Then establish whether you want to train current staff or hire new employees to fill the gaps. Train employees if the skills gap is small (a difference of 1 point) and you believe your team can learn the skill. Hire if the gap is large (difference of 2+ points) and you don't think your current staff can learn the skill.
In our example, there is a gap in People Management and Negotiation but no gap in Conflict Management. Train for People Management if your employees are willing to learn. Then, hire for Negotiation if your employees lack the capacity.