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Before conducting a training need analysis, make sure to compare it against the following checklist:
Second-guessing the effectiveness of training programs is easy. This is why it is critical for organizations to calculate the ROI of their training programs.
The ability to develop and enhance employee knowledge using L&D programs benefits organizations in two key areas:
Rapid changes in technology, business priorities, and job requirements can make it difficult for organizations to maintain the capabilities they need. Without a clear understanding of existing workforce skills, leaders may invest in training, recruitment, or workforce planning without addressing the most important capability gaps.
A skills gap analysis helps organizations identify where current skills do not align with present or future needs. This guide explains the key methods of skills gap analysis, how to conduct the process, and how to use the findings to support upskilling, reskilling, hiring, internal mobility, succession planning, and workforce development.
At this point, it makes sense to understand the major challenges that plague learning and development programs and how organizations can address each challenge. But first, let's look at what the data tells us. According to research by the Harvard Business Review,
Is there a recipe for success for creating a learning and development strategy?
In this section, we will talk about what it takes to create a holistic learning and development strategy framework.
The role of Learning and Development in HR is now more critical than ever. The HR manager's primary responsibility is no longer restricted to scouting for talent and hiring the right people. They have to focus on
Let's start with the basics and understand what Learning & Development is. Quite simply, L&D refer to the process of improving an employee's skill, knowledge, and competency. The term comprises two components:
Learning and Development (L&D) is an integral part of Human Resource management. In fact, organizations are leveraging L&D programs to drive agility and performance among their employees.
They are also fostering a learning culture to empower employees to "take charge" and lead with knowledge, skills, and capabilities going forward in 2022. In this in-depth guide, we will cover all the bases about everything L&D-related—from what is L&D to effective strategies and checklists that HR professionals can readily embrace. Let's jump right in.
For a more in-depth checklist, refer to the following:
The L&D team should comprise Subject Matter Experts and learning strategists. This step includes:
If the project requires a complete overhaul of the training program, its organizational impact needs to be understood. To validate the business needs, ask the following questions:
This step requires creating a profile of the trainees in relation to key areas such as industry experience, communication skills, etc. The inputs can come in from the recruitment team. Real samples of calls, emails, chats, etc. can be examined to analyze the trainees' strengths and weaknesses. This can be done by answering the following important questions:
This step involves understanding the job/task at hand. Additionally, the main duties and skill levels required for the training program need to be identified. To do this, Subject Matter Experts, high-performing employees, supervisors, and managers in charge can be interviewed.
Start by asking the following questions:
This analysis is important to setting the right expectations and using accurate metrics to assess program success. Ask the following questions to create an in-depth analysis:
One of the most integral aspects of Training Need Analysis is content analysis. Often done in collaboration with Subject Matter Experts, content analysis can be aced by asking the following questions:
Based on the data collected and by studying the existing course material, a design document including the relevant training objectives can be created. This can be used as the foundation for creating the new training course material.
This step involves being able to demonstrate the return on investment of the learning and development initiative. To do this, factor in all the key metrics and KPIs that can drive the ROI. Also account for the costs of development, delivery, assessment, metric reporting, and so on.
Evidently, there is a significant shift in the way companies are driving L&D programs. They are increasingly treating "learning" as a strategic asset. Moreover, to recruit high-quality talent, organizations are driving engaging, memorable, and "employee-obsessed" programs.
Contrary to popular opinion, learning and development programs are not just beneficial for the employee; they also hold great value for the organization. This includes higher customer satisfaction, increased revenues, and a significantly happier employee base. That said, for organizations to leverage L&D as a competitive advantage, there needs to be a shift in the organization's HR and learning culture. It is only with continuous learning can enterprises hope to innovate with a future-ready workforce at the helm.
Finally, at the core of value-driven organizations is an ever-evolving, strategic, and skilled workforce—one that's powered by learning-centric culture and training-led design thinking.
Quite simply, Training Needs Analysis (TNA) refers to a systematic process of figuring out the kind of training required to identify new skills, knowledge, and attitude needed by employees to boost performance.
When it comes to Training Need Analysis, you need to understand it's components first. Here are some of the analysis types:
Wondering what the training need analysis process flow looks like? Keep going. First, it is important to know that assessments can be done at any time—post hiring, during performance reviews, during career development plans, or even while succession planning. In other words, any change that the organization makes that can directly impact the employees' job will require an assessment. As a thumb rule, organizations should perform the assessments periodically to gather the training requirements of the organization, gauge the employees' knowledge and skills, and analyze the training program's effectiveness.
This is the first step to a successful training program and an integral part of succession planning. The idea is to focus on training areas that are important for employees to achieve their organization's goals, make optimum use of the training cost, and encourage employees to move ahead in their career development path.
The key questions to ask here are: Why is the enterprise conducting a training needs assessment? In some cases, instead of conducting training, other solutions may help solve business issues such as goal clarification, realignment of a department, or employee engagement.
Step 2: Perform a gap analysis.
In this phase, the current state of the employee's performance and skills is assessed and compared to the desired level to understand the "gap". A gap analysis can be conducted by gathering data via varying methods:
The gap analysis conducted in the previous step will lend a list of useful training options and needs. This list can be used against the organizational goals to understand whether training is a viable option or not.
Once the training needs as well as options have been assessed, the HR professional can map out a list of training priorities for the employees, the departments, and the company on the whole.
The next logical step is to report findings from the training needs assessment. Based on the data, recommendations can be made for short and long-term training plans and budgets. Remember to prioritize from the training options list. Also, ensure that the report accurately and succinctly summarizes why and how the assessment will be completed. Mention the methods used as well as the key people involved. Finally, provide a timeline within which the training should be complete. Important questions to ask at this stage include:
You could have the best training program in the world, but if you are not measuring its effectiveness, you are essentially shooting blind. According to research, despite organizations spending billions of dollars in learning and development, they are failing to engage people, and this "disengagement" is costing the US economy up to $550 billion in lost productivity each year. Another report titled "State of Learning" claims that in order to determine the impact of leadership development programs, the top-two metrics that L&D leaders look at are - employee engagement (48.8%) and retention/attrition of top performers (48.6%). Surprisingly, ROI was one of the bottom metrics used by L&D leaders to demonstrate the impact of training programs on the broader enterprise — a bad sign.
Evaluating the effectiveness of training programs is critical. Here's why:
- Are the learning programs meeting the organizational objectives?
- What kind of topics are most valuable to the learners?
- Are the trainers leveraging the right mix of delivery methods?
- Are the learners engaged and applying the content in their respective roles?
- Are the learning programs able to demonstrate tangible benefits (read: higher productivity, reduced errors, etc.) for every dollar invested?
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The first step involves gathering accurate and quantitative information to justify the cost of your training programs. To calculate the ROI, start by asking yourself the following questions:
- Does your enterprise have the required systems in place to conduct the training and gather real-time data?
- Can the data be mined and analyzed accurately?
- What are the expectations of the stakeholders when looking for an ROI study?
- Do you need to consult with the executive sponsors to manage their expectations?
- Is self-reported data (read: information from surveys and interviews) a part of the company's culture?
Once you have the answers to these questions, you can define how much you have spent on L&D. Important factors to consider include fees for speakers (digital or in-person), travel and lodging, meal costs, etc. You can also look at the lost productivity time as well as the cost of technology.
The next step is to identify the right mix of metrics to understand whether or not the L&D program is effective. Some common metrics that companies use include:
You can weigh the performance against industry benchmarks or your own goals to gauge the efficacy. For instance, say your brand wants to enhance customer service. Your training can drive best-practice customer-engagement techniques. In terms of the metrics, your organization can measure "hard" metrics such as sales or conversion rates. It is critical that you select the right factors to measure, both before and after the training. Here's the formula for calculating ROI:
An impactful and accurate ROI analysis should:
The end goal here is to understand:
For L&D programs, qualitative information is as important as quantitative information (read: hard data), especially when presenting a business case to key stakeholders. This step incorporates understanding the level of "learning" that is being imparted to the participants, which includes three elements:
After all, ROI is not just a number. Qualitative feedback and comments also need to be factored in to gather unique insights that can be useful for training managers. So make sure to identify the non-numerical aspects related to the program, such as interviews or surveys. Feedback is central to building a robust and value-driven L&D program.
In addition to the points mentioned above, here are a few best practices to keep in mind:
In a recent Gartner survey, 60% of HR executives reported that their CEOs wanted to ensure employees have the skills needed for the future. When it comes to taking inspiration for killer L&D strategies, the FAANG group (Facebook, Apple, Amazon, Netflix, and Google) has been a benchmark for high-performing enterprises. In this section, we will look at some of the most successful L&D strategies embraced by these giants to revisit their hiring strategies and laser-focus on the underlying skill sets.
Facebook's L&D program, "Managing Unconscious Bias," is multi-dimensional in approach and strives to offer personalized experiences for individual learning. The aim of this program is to train employees to acknowledge workplace bias and lower its negative effects.
Moreover, the brand's signature program, "Bootcamp," is wildly popular. It is a six-week introduction to Facebook that all engineers must go through. The program helps them decide how the engineers will contribute to Facebook. Plus, it aids in mentorship, experimentation, and team building, providing new hires access to an internal network, and driving unity. Apart from this, the brand has two other L&D-friendly programs:
There are numerous L&D programs that Facebook drives. All employees have to do is enroll in online communities using Facebook Workplace and connect with the desired training:
Apple's L&D programs encourage employees to self-learn, which occurs in-house, year-round. The brand leverages full-time academic staff to design and teach courses. Employees can sign up for customized courses based on their job role and background on an exclusive internal website.
The brand's "Lead to Succeed program" is an excellent example of L&D done right. The main objective of this program is to help employees understand the core business values and gauge how these values are aligned with the business strategy. The program also aims at developing skills that can support future business growth. Over 300 senior managers have completed the program to date. Employees also get access to a Steve-Jobs-inspired course titled "The Best Things," which motivates employees to surround themselves with the best things, like talented peers and high-quality materials.
Amazon's "Pivot" training program, an integral part of the performance improvement plan (PIP), is an interesting case in point. The program aims at helping employees who are in danger of getting fired. Subject matter experts—also called Career Ambassadors—provide guidance and support to underperforming employees. The program offers the following options to employees:
The brand's HR managers claim that "Pivot is the company's way of coaching and enforcing changes in behavior, a 'necessity' that ensures better work performance." Other interesting L&D programs by the brand include:
The AWS re/Start program offers a free, full-time, 12-week skills development program that prepares individuals with little or no technology experience to pursue entry-level cloud computing positions and industry-recognized AWS Certification.
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Not a lot is publicly known about Netflix's L&D program. However, in 2009, the brand shared a 126-slide presentation titled Netflix Culture: Freedom & Responsibility.
The key takeaways from the presentation include:
The brand drives a collaborative learning style to encourage new hires to settle in quickly. It allows new starters to meet senior management, CEO Reed Hastings, and a dedicated mentor from the very beginning.
At Google, 80% of all tracked training is run through an employee-to-employee network called "g2g" (Googler-to-Googler). This volunteer teaching network comprises 6,000+ Google employees who help their peers learn and grow by teaching courses, providing 1:1 mentoring, and designing learning materials. The end goal is to offer first-hand knowledge across fields, from employees to employees. This program is extremely successful as it:
There are three strategies that Google uses to make this program successful: One, it is driven by strong leadership sponsorship. Two, the brand effectively reinforces learning as one of its core values at every stage of employee development. Three, it reinforces and ensures that learning is a part of every employee's repertoire from day one.
1. It helps them stay ahead of the curve:
As organizations focus on developing their "brand" and creating a good impression, L&D takes center stage. As per data by the Universum and the DHI Group, 68% of the world's most attractive employers already have an employer branding strategy in place and believe that their employer value proposition is clearly linked to their HR/talent development strategy. Needless to say, brands that demonstrate their L&D offerings across the board will emerge as the front-runners in the potential hire's eyes.
To better understand how a robust L&D program can serve as a firm's competitive advantage, let's look at a real-life case study.
Problems faced:
Pepper UK is a part of the Pepper Group, a diversified global consumer finance business. The firm is regulated by Financial Conduct Authority (FCA) and is required to be in compliance at all times. When the pandemic hit in 2020, this became a herculean task. Other challenges that the firm faced included:
Considering that the group had a well-established L&D team, system, and processes in place, it benefited in the following areas:
With such a robust system in place, Pepper took its L&D program to the next level by focusing on employee well-being when its competitors were struggling with everyday operational issues. It launched a new employee well-being program called the "PES People Matter program," which was conceived, designed, tested, and launched in just three weeks to support employees in Cyprus, Greece, Ireland, Spain, and the UK. The program also won an award for innovation at the Association for Business Psychology's Workforce Experience Awards 2020. The program was clearly aligned to three key themes - well-being, connections, and leadership. It comprised of these key features:
The key learnings learned from this initiative include:
The results?
The brand claims, "In terms of outcomes, our employee engagement (Office Vibe) score has steadily increased, as has our Glassdoor score." Naturally, this initiative doubles as a competitive edge for the company in today's cut-throat business landscape.
2. It helps attract better talent:
For high-performing companies, the word employee has become synonymous with talent, and rightly so. However, in order to recruit talented employees, organizations must have a systematic and employee-centric L&D program in place. Organizations that commit to their employee's personal and professional development can benefit in numerous areas, such as:
A skills gap analysis is the process of comparing the skills employees currently have with the skills they need to perform their roles effectively and support business goals. It can be conducted at the individual, team, role, department, or organizational level.
The process typically involves identifying required skills, assessing current proficiency levels, measuring the difference between current and required capabilities, and prioritizing the gaps that require action.
Organizations can use the findings to make more informed decisions about employee development, recruitment, workforce deployment, succession planning, and long-term skills requirements.
A skills gap analysis helps organizations understand where workforce capabilities fall short of current or future business needs. Its key benefits include:
Organizations can use different methods to evaluate current workforce capabilities and identify areas that require development. Combining multiple methods usually provides a more accurate and balanced view of employee skills.
Skills assessments use structured tests, simulations, or practical exercises to measure technical, functional, or role-specific proficiency. They provide consistent and comparable data, but each assessment should closely reflect the actual requirements of the role.
Self-assessments ask employees to rate their own proficiency and identify areas where they may need development. They are easy to conduct at scale, but the results can be subjective and should be supported by additional evidence.
Manager and peer evaluations assess how employees apply their skills in day-to-day work. They provide useful context for behavioral and interpersonal skills, but the results may be influenced by personal judgment or bias.
Performance data and employee feedback use work samples, project results, performance records, interviews, surveys, and feedback sessions to identify demonstrated capabilities and development needs. These sources provide practical workplace evidence, although results may also be influenced by workload, resources, team support, or internal processes.
For a reliable skills gap analysis, organizations should combine objective data, such as assessments and work samples, with contextual input from employees, managers, and peers.
A skills gap analysis compares the capabilities employees currently have with the skills required to meet business and role expectations. The process should involve HR, department managers, business leaders, and employees where appropriate.
Decide whether the analysis will focus on an individual, team, department, role, or the entire organization.
Clarify the reason for conducting the analysis. Objectives may include preparing for new technology, improving performance, supporting succession planning, developing future capabilities, or addressing changing customer and market requirements.
HR teams should also meet with relevant managers and stakeholders to explain the process, define responsibilities, and confirm how the findings will be used. External consultants may be involved when specialist expertise or an independent assessment is required.
List the technical, functional, and behavioral skills needed for the roles included in the analysis.
Use the following sources to identify and validate required skills:
The objective is to distinguish between genuine capability needs and unrealistic or outdated role expectations. Skills should then be prioritized according to their importance to current performance and future business plans.
Establish clear proficiency levels for each skill so that current and required capabilities can be evaluated consistently.
A simple framework may include:
The required proficiency level may vary by role. Not every employee needs advanced proficiency in every skill.
Evaluate employees’ current capabilities using appropriate skills gap analysis methods.
These may include:
Combining multiple sources can provide a more reliable view than relying on a single assessment method.
Compare employees’ current proficiency with the level required for their roles.
Prioritize the gaps according to:
A large gap in a business-critical skill should generally receive more attention than a similar gap in a skill that is rarely used.
Choose the most appropriate intervention for each prioritized gap. These may include upskilling and reskilling, mentoring, internal mobility, succession planning, practical work assignments, or external hiring.
For each action, define:
Reassess skill levels regularly to determine whether the selected interventions are closing the gaps and supporting the original business objective.
Consider an organization evaluating employee capabilities across IT, banking, and artificial intelligence roles. It defines three proficiency levels, Beginner, Intermediate, and Advanced, and compares the proficiency required for each skill with employees’ current capabilities.
In this example, cybersecurity incident response, financial risk analysis, and responsible AI and model governance have the highest priority because employees are at the Beginner level while Advanced proficiency is required.
Moderate gaps can be addressed through targeted training, practical assignments, and mentoring. The recommended actions should be reviewed during future assessments to measure progress and determine whether the identified gaps have been reduced.
After identifying and prioritizing skills gaps, organizations should choose the most appropriate intervention based on the size of the gap, its business impact, available resources, and the time required to address it.
Organizations should assign responsibilities, establish timelines, and define measurable outcomes for each intervention. Skills should then be reassessed regularly to determine whether the selected actions are reducing the identified gaps.
NatWest Group is a banking and financial services organization. As technology, customer expectations, and job requirements changed, the organization needed to prepare employees for future roles rather than focus only on the technical skills required for their current positions.
NatWest recognized that rapidly changing roles and the shorter lifespan of technical skills made it difficult to predict exactly which jobs would be needed in the future.
The organization therefore needed to identify transferable capabilities that would help employees remain adaptable, mobile, and prepared for changing career requirements.
NatWest conducted an evidence-based review using behavioral science, academic research, and external workforce trends. This process identified five critical employee capabilities:
The organization gained leadership support and incorporated these capabilities into workforce planning, recruitment, employee assessment, performance management, and career development.
NatWest also introduced a capability self-assessment tool that allowed employees to evaluate their strengths and identify development gaps. The assessment was supported by learning resources, team activities, manager discussions, videos, toolkits, and interactive learning experiences.
The capability self-assessment was completed more than 52,000 times, helping employees understand their strengths and focus their development on relevant future capabilities.
The initiative also helped NatWest:
The case demonstrates how a skills gap analysis can help an organization move beyond current job requirements, identify transferable future capabilities, and integrate skills data into broader workforce decisions.
A skills gap analysis helps organizations identify the capabilities their workforce needs to meet current and future business goals. This includes conducting an AI skills gap analysis to understand where employees need stronger capabilities in areas such as artificial intelligence, automation, and data-driven work.
By assessing existing skills and prioritizing critical gaps, leaders can make better decisions about upskilling, reskilling, internal mobility, succession planning, and hiring. To achieve lasting results, organizations should assign clear actions, measure progress, and reassess workforce skills regularly as roles, technologies, and business priorities change.
So where are companies going wrong? Here are the four possible areas:
In this section, we will dive deep to understand the main L&D-related challenges Standard Chartered faced and how the bank tackled the same.
Problems faced:
Proposed solution: To enable the effective reskilling and upskilling of its existing workforce instead of relying exclusively on hiring new talent to meet the strategic priorities and business objectives.
The results?
This can be done by analyzing the employees' existing capabilities and narrowing down the skills that are most critical to aid the execution of the company's business strategy. Ideally, L&D leaders must review the skills-goals alignment on a yearly basis. This will ensure that the people on the team are truly reflective of the company's latest priorities and strategic objectives.
Use-Case: How PwC Singapore Catered to the Needs of a More Digital Tomorrow and Addressed the Skills Gap
To help employees upskill and stay relevant to the demands of the future, PwC Singapore undertook the following initiatives:
Step 1: The team identified the key skills that would be "relevant" for the digital future, such as data analytics skills, literacy skills, and visualization skills.
Step 2: With the role of automation increasing in monotonous day-to-day activities, the team encouraged employees to move to different roles that require more human and strategic skills (read: problem-solving, critical thinking, and effective communication).
Step 3: This radical shift was communicated to employees by the senior leaders. Moreover, the leaders "walked the talk" by adopting digital tools in their daily work.
Step 4: Communications were supplemented with a multichannel approach to drive internal awareness via events (think: town halls), regular newsletters, and emails. This helped address key issues and concerns in real time.
Step 5: The firm embraced a robust learning toolkit to hone employee skills, which included the following initiatives:
These tools provided employees with easy, on-demand access to learning materials. For example, if an employee wants to advance their skills in data analytics, they can simply search for the available resources and watch/listen to/read it at their own pace and convenience.
Explore our curated list of the top 16 learning and development tools, revolutionizing skill development and empowering your workforce.
Here's how L&D leaders can deliver a holistic learning and development program that is ROI-driven, on time, and under budget:
Business excellence: Understanding how closely aligned all L&D initiatives are with the company's priorities
Learning excellence: Analyzing whether the learning initiatives are bringing about a change in people's behavior and performance
Operational excellence: Reviewing how well the investments and resources are being used
By leveraging these plug-and-unplug systems, L&D leaders can lay the foundation for a scalable and cost-effective learning model with technology at its heart. The right cocktail of tools can assist in core areas of HR development, such as recruitment, onboarding, performance management, real-time feedback, succession planning, career management, and rewards and recognition.
The learning:
The leaders of L&D functions need to realize the importance of enhancing an organization's most significant asset—its employees. This is why embracing an innovative, flexible, and agile L&D approach (read: the Learning and Development strategy template outlined above) is key to creating a pool of future-ready human talent.
So, the real question is understanding how L&D and HR are intricately woven together. Here's a table that summarizes the individual differences and the "connect" between both of these disciplines by way of a few everyday use cases:
Moving on, let's understand why HR needs to prioritize Learning and Development initiatives in today's ever-evolving workplace.
With 76% of Gen Z participants being more focused on learning and 69% making efforts to carve out more time to learn, as reported by the LinkedIn survey, HR departments need to laser-focus on an employee's succession planning if they want to retain the best talent. The same study predicted that Gen Z learners watched 50% more hours of learning content per learner in 2020 vs. 2019. Another LinkedIn survey conducted in 2019 claims that a staggering 94% of employees would stay at a company longer if there were an investment in their learning and development. So if companies are not presenting employees with opportunities for learning and development, they are subtly guiding employees through the exit door.
In fact, organizations such as Starbucks and Unilever are already prioritizing the mental health of their workforce. Additionally, a recent Udemy report claims that there's a four-digit percentage increase in the consumption of content related to anxiety management, stress management, and resilience skills.
In summary:
HR leaders need to view talent as a "renewable resource" and leverage L&D as the primary asset to attract and retain employees. Furthermore, it is clear that the key to a Gen Z worker's heart is career growth. Why HR leaders should invest in training and development efforts to reap significant benefits such as:
Learning and Development in HR can offer tangible and intangible benefits for the organization and employees alike. HR managers that do not engage in succession planning and prioritize employee-centric career growth will miss out on promoting high-quality talent for future organizational goals—a fatal mistake in today's cut-throat landscape.
A. Learning: It signifies the acquisition of skills, knowledge, and attitudes through experience and teaching.
B. Development: It signifies the deepening of knowledge with respect to the employee's personal and organizational development goals. It is relatively long-term in approach. The end goal of L&D is to
The pandemic has transformed nearly every sector—Human Resources and L&D are not exceptions. Here's why Learning & Development is increasingly becoming important in the current employee development landscape.
Now that we've understood how integrally tied skill-building is to Learning & Development initiatives, let's look at the top 3 skills employees must ace as stated in the latest LinkedIn survey. According to the survey, the following "power" skills are critical to future-proofing employees and helping them thrive in a competitive workplace going forward:
Additionally, the survey also highlights the fastest-growing top 5 skills in the business, sales, IT, and engineering domains. These include:
Explore our top 16 learning and development tools to transform skill development and foster growth within your organization.
In Summary:
In 2022, Learning & Development will involve enhancing the effectiveness of organizations and improving individuals' performance by focusing on skill-building and redeploying talent into new roles. When it comes to understanding what is L&D and embracing its essence, enterprises need to remember that
One, it has emerged as a "need-to-have" as opposed to being a nice-to-have component for employee development.
Two, they need to double down on their efforts to upskill or reskill employees if they wish to close the ever-widening skills gap.
Three, they need to align their L&D strategy with the organizational goals and reshape the way their enterprise operates in 2022.
