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What is "Skills Gap Analysis," and what are the different skills gap analysis methods?

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The skills gap analysis model is a type of tool that is used to understand the gap between the actual skill state and a future goal state. This tool helps to identify the skills that an employee may be lacking to perform certain tasks/jobs effectively in the near future. There are numerous ways in which HR personnel can address the skills gap within the organization, such as upskilling, reskilling, succession planning, and so on. Understanding the skills gap has become increasingly essential as, according to the World Economic Forum, by 2022, no less than 54% of all workers will need to update or replace their competencies.

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Here are the top 5 benefits of conducting a skills gap analysis on a regular basis - 

  1. It provides insights into the current skills state of the workforce. Managers can identify which employees have the most knowledge and which ones are suffering from a skills gap.
  2. It empowers the HR team to target the right training assets based on the data collected, leading to the optimal use of training resources.
  3. It boosts employees' learning and development as well as productivity as they acquire new skills and competencies required to perform their future roles.
  4. It enables the HR team to build a strategic workforce comprising the right talent and the right skills in the right place. In other words, it improves recruitment efforts.
  5. It provides a competitive advantage as the organization truly understands and appreciates its workforce's strengths and weaknesses. This leads to better planning and optimized organizational performance.

How to Conduct a Skill Gaps Analysis in the Workplace

Wondering how to conduct a skills gap analysis? 

Identifying the skills gap in the workplace takes plenty of effort, experience, and, well, skill.

Step 1: Plan, plan, and plan some more.

A skills gap analysis can be performed on two levels. Here's an overview of the skills gap analysis methods for an individual/team:

The HR team should:

Step 2: Identify the critical skills required.

One of the main goals is to identify whether the skills gap is occurring due to unrealistic expectations or if there is an actual need for new capabilities and skills. This can be understood by answering one key question:

What skills do the company value and need within the next five years?

Consider the following best practices to understand the list of critical skills required:

  • ‍Think about the company's business objectives, values, and job descriptions.
  • Survey team members to understand what skills they might be lacking.
  • Leverage the insights collected to list and prioritize the top critical skills needed.

Step 3: Measure the existing skills.

There are numerous ways to measure existing skills. This can be done by driving surveys, employee interviews, and feedback sessions related to performance. A skills management software can be leveraged to get accurate and quick results on a skills gap analysis. To close the skills gap, consider training or rehiring.

Step 4: Act on the data collected.

Depending on the skills gap identified, employees can be rehired or trained. Use the following approaches and formats to train employees:

  • Workshops, seminars, and training sessions
  • Subscriptions, online courses, and digital training material
  • Voluntary peer-to-peer mentorship programs
  • Events and conferences driven by senior management
  • Certification program to drive engagement and employee loyalty

RHP Use-Case: An Example of a Skills Gap Analysis Done Well

RHP is a not-for-profit housing association based out of West London. The organization aims to provide housing to people who cannot afford to live locally.

Key challenges: 

To achieve the company's five-year strategic goals, it needed to:

  • Develop a more consistent leadership capability.
  • Develop a stronger pipeline for future managers.

Proposed solution: 

To support its Learning and Development program, the organization identified the skills gap within its operational model. By analyzing the internal and external sources, such as exit interviews and talent reviews, it realized the importance of emotional intelligence and empathy as fundamental skills to be future-ready. The organization also looked at employee engagement surveys and follow-up interviews with managers and employers to get under the skin of the data. Here's the glaring gap that the brand identified:

There was an absence of a consistent coaching culture. People were leaving because they did not know how to "progress internally."

Strategies applied:

  • It developed an in-house "Luminous" leadership program for aspiring managers, senior leaders, etc. The learners had access to topics such as high-performing teams, money management, decision-making, and problem-solving, to name a few.
  • The program aimed to bring learning to "life" by way of memorable formats, including Luminous Lunches, book clubs, external speaker programs, escape rooms for problem-solving, etc.
  • In the classroom-based learning format, it delivered bite-size sessions and laid emphasis on activities to follow up and embed the learning.

The key learnings for L&D practitioners include:

  • Learning can be creative: By using a creatively-powered mixed delivery approach (think: workshops, podcasts, book clubs, problem-solving games, etc.), the brand brought learning to life (quite literally) and made it engaging.
  • Follow the "little and often" mantra: To ensure that managers had time to learn, the company reduced the length of the sessions by providing bite-sized chunks with frequent follow-ups for memory retention.
  • Embrace a collaborative learning style: The organizations leveraged external and internal partners—from the communications team to the external subject-matter experts—to create impactful learning content.

The results: 

  • A shift in coaching skills: The program witnessed increased employee satisfaction with coaching from managers, as demonstrated by employee surveys.
  • Improved customer satisfaction: The program improved RHP's Trust Pilot reviews and scores, reduced call drop-off rates, and improved the process of handling complaints.
  • Increased employee engagement: The employee engagement scores increased from 85% to 94% over a 12-month period.
  • Employee progression: The program assisted aspiring leaders in moving on to management roles and opened up opportunities for career conversations within the organization. Within a 12-month period, four employees progressed to a higher role as a result of the program.