How to Perform Skill Gap Analysis

Human resourcesPre-employment screening
February 21, 2023

As a company develops, employees must improve their skills to execute their business strategy. There is no guarantee that the method that gets you where you are can get you to the point you want to be in the future.

How does a manager or employer know what skills they need and how to assess employees? And how do they prepare their employees to take care of the business? When an employer reaches this point, skills gap analysis steps in. 

A recent study on the future of jobs offered factual evidence of employers’ extensive concern about the need for upskilling their employees. This report determined that in the next five years, 40% of the primary skills of employees who stayed in their current roles will change, and half of the workforce will need reskilling.

A skill assessment can offer the fundamentals for managing these challenges. It is an essential tool to have strategic plans for the workforce. 

Suppose your team’s performance is cheap and affects your business and your customer’s level of satisfaction. In that case, it might be time for a skill gap analysis. 

This underutilized tool is one of the most productive ways to recognize the skills that your team and your employees need. Skill gap analysis means your business team needs upskilling and reskilling to help the organization catch up with the market changes.  

It’s not surprising that a well-trained employee is necessary to guarantee a company’s success. With technology and changes in the international economy so fast, employers should consider strategies to measure up their team members. 

Based on a recent study, about 65% of children entering elementary schools now might have jobs in the future that still don’t exist. We know there is no way to see the end.

Still, skills gap analysis can be the best tool for human resources and development teams. Companies must ensure their employees are ready to face new challenges and reach business goals.

What is a skill gap analysis? 

skill gap analysis

A skill gap is a difference between the skills your organization will need to perform the strategies successfully and the skills currently being used in the workplace. 

A skill gap analysis is a plan to manage the existing gaps in your company. It would be best to close these gaps through training, hiring, or outsourcing.

Skills gap analysis is a tool to identify gaps between employees’ current skills and those needed by your organization to conquer its goals. This tool will help you recognize what training or hiring requirements are necessary to fill those areas where skill gaps are evident.

A successful skills gap analysis will help you recognize any skills and knowledge gaps and where they exist inside the team or organization. 

This tool will also help you to identify if skills gaps are minor enough to be connected through employee upskilling and reskilling. The analysis can describe to you where in your company skills development has the most significant effect.

Conducting a practical skills gap analysis will guarantee that you choose the correct priorities and should focus on business strategies that can help solve the workforce’s complications. 

Running a skills gap analysis will also remind employers and managers to see business from a skills lens as a long-term approach for the business.

Moreover, skills gaps analysis can describe the difference between a company’s requirements for constant growth and your workforce’s current skills and abilities. Because these data don’t usually match up, it can be enlightening to identify defects and offer opportunities for education and growth.

Conducting the analysis can guide your knowledge and development teams, human resources, and management to identify which employee skills you should be transferred to your workers. This analysis can also help you to get ahead of new technologies and trends before the methods become outdated. 

When should you conduct a skill gap analysis?

conduct a skill gap analysis?

Skills gap analysis isn’t something to be done only once and never again. When you change or develop your business methods, consider if your employees have the critical skills to make it work. It should confine both soft and technical skills. 

You can identify skills gaps in some specific circumstances:

  • When you miss business goals 
  • When you have obstacles to reaching business goals
  • When you introduce new technologies 

A skill gap analysis might happen when a company faces the possibility of essential changes affecting the work nature and how it should be done. That can involve organizational changes, competitive environment, customer demands, technology, etc.

A skills gap analysis can apply when a company fails to reach its business goals or a team has difficulties achieving its objectives. Analyzing skills gaps during an investment is also a good idea. 

Think about extensive skills gap analysis that can support adjustment to the changes brought by new technologies, especially artificial intelligence.

Moreover, it would be best if you took the time to study skill gaps before applying new systems. You must ensure the company can get the most out of its technology investment. 

Some companies perform skills gap analysis frequently, for example, every two or three years. Waiting for more than a few years without any efforts or evaluation to recognize skill gaps is too long. So, it would be better to conduct a skill gap analysis every two to three years. 

Why should you do a skill gap analysis?

A skill gap analysis can evaluate your employee’s current skill level and compare it to what’s needed. This tool will also register the state of your workforce. 

These analyses can be beneficial over time, not just for filling skills gaps but for instructing talent searches and identifying new potential ob candidates. 

A well-performed skills gaps analysis can also act as a method to identify if your current training programs are meeting the expected objectives. 

Performing a constructive skills gap analysis will help your organization progress. At the same time, you will gain critical insights into your employee development. The benefits of conducting a skill gap analysis are as below: 

  1. Improve the strategic workforce planning. In a work environment that is constantly developing, you need to think about who you’re hiring and if new employees can help you reach your company’s goals. 
  2. Get an outline of the entire company: From the top to down, you can consider every department and decide which team or department doesn’t have the necessary resources to identify the organization’s goals.
  3. Improve your long-term hiring strategy: Avoid hiring unexpectedly whenever a new need emerges. You want to anticipate where the skills gaps will be and when these gaps will appear. You want to implement a long-term hiring strategy to ensure these gaps are always filled.
  4. Boost productivity: Providing your current employees with the necessary training to fill the gaps in their specific skill sets will make them more productive.
  5. Get ahead of your competition: Conducting a skills gap analysis will help you get ahead by filling in your weak areas. Not only will it help you hire smart, but it will also help you to bring innovation and get ahead of the twists in your industry.

Steps to a successful skill gap analysis

Steps to a successful skill gap analysis

You need to take some essential steps to ensure your skill gap analysis is accurate and will offer you the data you need for your organization. In this section, we will talk about the most common stages of skill gap analysis. You can take these steps to accomplish your business goals.

1. Set a Plan

You can perform a skills gap analysis at the individual or team level. For example, you can identify the necessary skills of a specific job position and then compare them to the skill level of one employee.

Or, you can evaluate your employees’ existing skills and determine if they can work on future projects and benefit the company in the long term. If this is not the case, you need to hire new workers. This assessment will also help you to choose the correct training program to develop employees’ skills.

Human resources can create a team next to a comprehensive skill gap analysis by organizing a meeting with managers to explain the skill gap analysis process. You can also recruit a consultant to perform a skills gap analysis. Hiring a new analyst can create a more objective process, and your staff has more free time and can focus on their tasks. 

Your project should have a clear goal

2. Set Goals

Your project should have a clear goal. It would be best to determine what you are looking for to identify the gaps between your employees. To do that, you must think out of the box. For instance, you might need to change the project or strategies to get the desired results. 

 3. Identify and measure current skills

Some employers believe they should fill the skill gaps by hiring new employees, and others believe the skill gaps are just because of too many employee expectations. But if you are wondering what your case is, you can answer the below questions from yourself.

What skills do we appreciate as a company?

What skills do the workforce require to do their jobs in the present and future?

Think about your organization’s job description, business goals, and company values. Consider the new skills your company may need soon. You can also evaluate team members to find out what skills they think they are missing.

The data that your receive from this evaluation is very crucial. On the other hand, when you involve your employees, they feel they are participating in the company’s development. 

To evaluate skill levels, you can use the following:

  • Surveys and evaluations.
  • Interviews with employees.
  • Feedback from performance reviews.
  • Using skills management software, like Skills DB Pro and TrackStar

4. Research future work skills

It would be best if you did more than visualize your company’s potential in the future. You have to understand where your company is heading, and to do that:

  • Consider how automation can change jobs.
  • Identify what future goals and skills might be.
  • Choose strong leaders in your industry and study global reports

5. Define future skills

you can apply only some new skills to your company

After you have an insight into what the work will look like, divide these skills into practical and substantial courses. Remember that you can apply only some new skills to your company. And they might also require an adjustment based on what you are teaching. If adopting some of these skills is a big step for some of your employees, think about changing the hiring process and consider these steps for future hiring. 

6. Look for gaps

After evaluating employees’ skills and defining your goals, you should identify the field with gaps. These gaps might already exist in your system or appear in your future business plans. 

As soon as you identify the gaps, you can offer solutions for the company’s needs and help your business do accurate prioritization. Some examples of gaps are as below:

New employees need to gain the technical skills to work on machinery or use software that’s supposed to handle your industry for the next five years. Current employees need more information about legal expressions, which is necessary for the changing aspects of the medical or insurance industries.

It is better to work with temporary workers or freelancers if you can’t wait until new hiring comes on board with the company. They can help to fill the gaps until you hire professional and trained employees to work within your ongoing process.


The skill gap analysis will help companies to develop employees’ skills and train them for future changes to accomplish the company’s objectives. All organizations should plan specific strategies for improving workers’ skills, or they will be left behind in the competitive market. 

 Understanding the steps for applying a practical skills gap analysis is a significant first step, but your adventure is still ongoing. 

There are many tools and methods in the marketplace to help you apply skills gap analysis. Choosing a tool that lets you keep the standard date and monitor employees’ progress would be best. The more these tools are unbiased, the better. 

Learning and development teams who have never applied a skills gap analysis should start this process on a minor project to get used to it. For example, they can begin by analyzing the skills gaps of a small department. 

The experience that a team can gain through their first minor-scale skill gap analysis can set the principle for similar attempts at a larger scale for the entire company. You will realize the extent of the changes your company will face in the following years, so it is best to start right now.