Every organization knows that there is a skill gap somewhere among their employees. What every organization finds difficult is identifying the nature and extent of this skill gap and how it impacts their business operations. This is the purpose of skill gap analysis, although the process is not exactly as most organizational leaders expect.
In theory, it seems simple enough to understand what skill gap analysis involves. Establish the skills that need to be there, the skills that are there, and the gap that exists between the two. The process is rather more involved than just measuring two sets of numbers. To extract any meaningful information from the analysis requires a little thought on how and why it should be measured.
Defining Skills and Their Measurement
The first step in skill gap analysis is defining the term skill in a measurable way. Technical skills are the easiest to measure; an employee can use a particular software program, or they cannot. Yet, skills are naturally varied; from mere acquaintance with a system to expertise.
Soft skills raise even more questions. How skillful is someone in leadership or communication? These are not black and white questions; they do not lend themselves to a yes/no answer. Leaders have to find a way to measure even these vague skill constructs in a way that can at least be interpreted consistently.
The best approaches focus on skills that will matter to the organization’s outcomes and not on measuring every possible skill. These may be technical skills related to implementing a specific piece of software or leadership skills required to execute the organization’s growth ambitions. Skills have to be limited in focus to have any measurable value.
Useful Information Collection Methods
These types of tests also pose their unique challenges in eliciting valid responses from employees. Self-assessment surveys are an attractive option. They are easy to distribute and collect but come with their challenges. Employees may overstate or underestimate their skills, which may be especially true of certain cultural contexts where questioning one’s abilities is frowned on.
Managerial assessment is another option, but this is just as prone to bias. Managers may find it easier to remember an employee’s performance if they excel in some area rather than recalling their everyday capabilities. Managers may also not have an intimate knowledge of the technical skill their team members possess.
Skill assessment tools are becoming a more popular option for organizations looking to gather this information effectively. A skill gap analysis tool can help organizations assess their teams’ skills consistently across departments, reducing the variability and bias that often comes from relying solely on individual manager or self-assessments. These platforms provide standardized frameworks for evaluation, making it easier to identify genuine skill gaps rather than perceived ones.
Skill testing is another objective measurement tool that can be used to gather this data. This approach will be effective in measuring skills that can be tested objectively. A coding test will probably provide an accurate measurement of an employee’s programming ability. Testing someone’s skills in project management or strategic thinking will be less likely to produce objective findings.
The end result for many organizations is combining various ways of gathering skill assessments. Self-assessments gather broad data; manager assessments provide contextualized data, and testing provides specific technical data in areas where it can be tested.
A Comparison Between Existing Skills and Future Business Needs
The skill gap analysis becomes useful once the information gathered compares the existing skill levels of employees with what the organization will need for their future business operations. This task poses its own questions. Organizational leaders have to know where they want their organization to go.
Skill gaps may take various forms. Certain positions may be filled by employees who have no skills required to execute their tasks. Others may be filled by employees with a basic level of competency who may need to be developed into competent employees for their positions. Still others may have deep skill-level resources who should not be a single point of failure for skill presence in a workplace.
Certain patterns may emerge during these assessments. Digital skills may be lacking among sales teams but flourished among marketing teams. Technical teams may have strong skills, whereas their finance teams may struggle with basic skills.
Actual Implementation of Analysis Findings
Skill gap analysis is only useful if organizational leaders act after completing one. There are several ways to fix the problems revealed by the analysis. The first is to train existing employees who have gaps in skills, which will enable them to become valuable members of the organization’s workforce. Leaders can also hire employees to fill these gaps. Leaders may also reorganize the tasks performed by their employees based on the skills they possess. The last option is to outsource tasks that require skills that do not exist or cannot be developed in-house.
Organizational leaders have to take various factors into account before deciding which option to follow. Does the organization require the skill urgently? Will individual employees need time to develop the skills? Will it fit their budget if they train their employees? Will it fit their budget if they hire skilled employees? How urgent is the need for this skill? Do they need to compete if time is of the essence?
Skill gap analysis has shown that not all gaps are equally important. If a gap identified is actively negating an organization’s efforts in its core business, projects, or areas of growth, it deserves immediate attention and action. Gaps that are neutral can wait and be dealt with later.
What Works
Skill gap analysis processes work best when they are regular occurrences and integrated into ongoing processes rather than one-off analyses. Employees will require different skills as technology, the organization’s business environment, and their strategies evolve. The employees who make up the organization will also change over time, as other employees leave, and new employees join.
Organizations that add skill gap analysis to existing processes, such as retrospectives after completing large projects or quarterly reviews, keep their analyses current and avoid finding themselves realizing too late that there was a skill that they required when it was still time-sensitive.
Skill gap processes require employees to be involved actively for the process to succeed and benefit organizations. Organizational leaders completing analyses but then failing to address the gaps may make future analyses a waste of time for everyone involved.
Conducting useful analyses for organizations is not free; someone has to be budgeted for this activity. When organizational leaders incorporate skill development into budgets and strategies within specific time frames, it gives skill gap analyses a purpose. Completing valid analyses creates capabilities that firms can build on over time instead of wasting time.