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Employee Skill Gap Analysis
Employee Skill Gap Analysis
Talent Development
Revathi V Gopal
Written by :
Revathi V Gopal
April 28, 2023
16 min read

Why is employee development important in building a stronger, more skilled workforce?

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Employees are one of the most valuable assets of any organization as they can enhance business growth, productivity, organizational reputation, and so on. But, like any relationship, the employee-employer relationship is also a tricky water that involves a lot of give and take, commitment, trust, communication, and loyalty.  

Therefore, as an HR professional determined to foster and nurture this relationship, focusing on your employees' growth and development becomes crucial. It is because, in today's world, there is a drastic shift in work-life priority with a boom in GenZ and the millennial workforce. This can be further substantiated by a LinkedIn study, where 27% of GenZ and millennial employees stated that lack of career development opportunities was the main reason for quitting an organization. We will get into the nitty-gritty of these elements in a short while.  


  • Employee development refers to investing in your employees and assisting them in improving both their tangible (hard) and intangible (soft) skills.
  • Some of the best employee development practices include identifying skills gaps, understanding employees and their workloads, creating strategic employee development plans by following labor market trends, etc.
  • Employers can drive productivity, attain business growth, reduce talent shortage, enhance employee engagement, and so forth by focusing on employee development.

What is employee development?

employee development

Employee development refers to investing in your employees and assisting them in improving both their tangible (hard) and intangible (soft) skills. It is a pathway through which organizations can enhance specific skill sets and make their employees competitive. This process can involve upskilling, reskilling, and cross-skilling (via adjacent skills) to improve your employees' existing skills or develop new ones to bridge the skills gap and make them skill-fit.  

With automation taking a front-row seat, paving the way for a probable displacement of 85 million jobs by 2025, it has become vital for companies to accelerate the often-under-looked corporate employment development activities.

However, there is good news.

As per a Chief Learning Officer's Business Intelligence Board survey, 75% of 1,500 L&D professionals believe in increased custom learning content in the coming years. Similarly, the 2023 L&D budget outlook looks confident. Although the numbers have decreased slightly compared to 2022, it remains the "third most optimistic view in seven years of tracking," per LinkedIn's 2023 Workplace Learning Report. Therefore, organizations worldwide are taking a solid foot in planning their employee development activities.  

Now, the question is how organizations can efficiently initiate employee growth and development activities.  

The simple answer is to start with proper planning and strategizing. Why don't we look at some of the best employee development practices for building a stronger and more skilled workforce?  

  • Start by identifying the skills gap and benchmarking your talent. While performing talent benchmarking, you can position your employees and their skills and find the skills they need to acquire to perform. This can be on par with others performing similar roles in your organization and other top companies.  
  • Understand your employees' workload, career development goals, what matters most to them, etc. This is something you can do by interacting with your employees, which can be through regular one-on-one check-ins, focus group meetings, surveys, etc.  
  • Create a strategic employee development plan based on the labor market trends, skills requirements, and, most importantly, by weighing your organization's critical skills for attaining desired business growth.  
  • While you build plans, base these plans on your work culture, industry standards, business type, mode of work, etc. Additionally, remember to involve managers while forming these structured plans. It is because they better understand your employees' skills and performance.  
  • Ensuring employee engagement is key while implementing an employee development plan. For that purpose, you can bring in goals, milestones, targets, and even a guided learning experience as part of your plans to enhance their engagement and experience.
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Top reasons why employee development is important

Employee development can be highly beneficial not just for the employees involved but for the organization too. Why don’t we have a look at why employee development is important in detail?

top reasons why employee development is important

Drive productivity

In the first half of 2022, the productivity rate of US workers faced the steepest drop in 74 years. This trend continues as most employees lack workplace motivation, engagement, and satisfaction. One of the ways through which organizations can improve productivity is through employee development activities.  

For instance, as per the 23rd Annual CEO Survey by PwC, 93% of CEOs agreed that introducing upskilling initiatives has increased productivity and helped build a resilient workforce. A boost in employee productivity can improve employee retention, enhance their self-esteem, and aid them in thriving at work while offering better customer value.

Enhance institutional knowledge

Institutional knowledge refers to tangible and intangible knowledge an employee gathers through work experience. When an experienced employee leaves, you would lose the insights, relationships, and knowledge the employee has gained. This could even adversely hamper your business operations.

But, when you strategize your employee development plan and focus on promoting and transferring this knowledge within your organization, you can retain and enhance these insights for a long time.  

Gartner suggests various ways to capture institutional knowledge. Some of them are:  

  • Using personal productivity tools for storing and distributing role-specific information  
  • Relying on knowledge maps to create a visual representation of enterprise knowledge  
  • Organizing contextual inquiry, where managers can ask team members to observe a departing employee and gain clarity on their role  
benefits of institutional knowledge

Improve employee engagement and satisfaction

Engaged and satisfied employees would root for your organization and work by aligning with your company’s business goals and strategies. As part of building an engaged and satisfied workforce, you have to facilitate your employees with career development and growth opportunities. This will enhance their commitment and motivation to work for your organization. Including employee development activities like skills development initiatives and training programs can improve employee engagement and satisfaction.

Reduce talent shortage

talent shortage

Skills gaps continue to widen, and the talent shortage issue is worsening. As per a recent study, where 39,000 employers from 41 countries participated, 77% said they find filing job vacancies challenging. The situation is much more complicated in the IT sector, where 78% face hiring challenges. Implementing employee development activities may not create a lightning-fast impact, but it can help reduce talent shortage gradually with time.  

Attract and retain top talents

Attracting top talent is a priority for every organization. But it is no gravy train or piece of cake for HR professionals. Increased skills gaps, demand for hybrid or remote work culture, and lack of adequate employee development plans make hiring challenging for TA professionals. You can attract top talents by initiating employee development activities and presenting them clearly in your Employee Value Proposition (EVP) and other employer branding activities.  

You can retain top talents in your organization by implementing employee development activities like hiring new talent. As per a LinkedIn study, 94% of the participants stated they would continue within their organization if they invested in their career development. Thus, you can immunize your talent acquisition and talent management wings with employee development activities.

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Assist your employees in exhibiting their full potential

When you offer learning opportunities to your employees along with ample rewards and recognition, it will encourage them to exhibit their full potential. They will work wholeheartedly for the organization as they understand that their company promotes their career development.

Through this, your organization can reduce instances of quiet quitting, where employees would put in minimal effort and do the bare minimum required without going over and beyond.  

With employee development activities that understand the development needs of your employees, you can convert your I-shaped employees to T-shaped ones who are skill-fit for performing different tasks proficiently.

Attain business growth

business growth-1

Business growth refers to developing a business to attain additional profits via brand reputation, sales, product development, improved customer base, and employee satisfaction.

Employee performance can directly impact different areas of business growth, and in reality, it can make or break the process. When your organization creates customized pathways for employee development, you can work towards attaining business growth. It can strengthen your sales, marketing, product development, and other activities, boosting profit.

Develop a learning culture within your organization

Creating a continuous learning culture within your organization can empower your employees and your organization. With rapid technological advancements, upskilling your workforce and making them proficient in automation technologies can reduce errors and remove monotony at work.

You can build a learning culture within your organization by formalizing L&D plans, having information-sharing sessions, offering recognition to your employees for completing different milestones, and so forth. Embedding a structured and flexible learning pathway within your employee development plan can, thus, be a game-changer.

Improve soft skills

In today's world, every employee must have soft skills. With increased automation, soft skills are key when hiring and retaining talent. As per a Deloitte report, two-thirds of all jobs will be soft-skills intensive by 2030.  

Soft skills include emotional intelligence, leadership, cognitive ability, problem-solving, etc. For instance, as per LinkedIn's Workplace Learning Report, leadership, and management skills are the highest priority for 57% of L&D professionals, followed by creative problem-solving, design thinking, and communication. Since soft skills are the need of the hour in the years to come, your organization can improve your employees' soft skills by focusing on the same in your employee development plan.  

Other reasons to promote employee development in your organization

Reasons to promote employee development in your organization

Final thoughts

Thus, by focusing on employee development activities in your organization, you can attain several benefits at the employee and organizational levels. So, why not focus on building and implementing an employee development plan in your company?

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