While skills gaps have always existed, workforces are currently undergoing dramatic changes that have exposed the shortage of expertise required for the new digital economy.
Therefore, in order to build an effective workforce for the future, organizations need to understand their existing skills gaps.
A skills gap is the difference between an employee’s current abilities and the skillset best suited for their job.
Companies have a desired set of skills to perform a given role successfully. This list of skills is dynamic and changes depending on external market forces and internal organizational changes.
Finding employees to match the required skills for every position is challenging; therefore, skills gaps exist.
Many factors can contribute to skill gaps:
Skills gaps can lead to workplace inefficiency, with staff struggling to handle their responsibilities or perform assigned tasks. In addition, severe skill gaps may lead to employees being unable to perform their roles.
In addition to focusing on an individual’s skills gaps, the concept can also be applied at a company-wide level.
Management can use skill gap assessments when introducing new procedures, technologies or take them into consideration when looking at work culture.
Skills gap analysis is a critical tool for organizations to assess the effectiveness of their workforce. Identifying any skills gaps present and understanding how they limit company performance is becoming essential thanks to new technologies transforming many business sectors.
With new technologies finding widespread use across the business world, the need for skills gap analysis is only growing.
At a time when digitization and automation are redefining what companies need from their employees, skills gap analysis offers the roadmap to a better, more efficient way of working.
Even before the pandemic, the World Economic Forum estimated that half of all employees worldwide need reskilling to learn how to operate in the new technology-powered workplace. Skills gap analysis is the key to successful reskilling and upskilling programs and understanding where workforces need to improve.
Identifying any skills gaps present and understanding how they limit company performance is becoming essential thanks to new technologies transforming many business sectors.
With AI, automation, and other advances, many roles are becoming obsolete, and organizations need to source new skills to match growing technological needs. However, research by McKinsey in 2021 shows 87% of organizations expect to experience skills gaps in the coming years, with 43% saying they already have one.
A 2022 survey of CEOs by Deloitte found labor and skills shortages were the 2nd most cited external factor disrupting their business strategy. Also, with the rise of the digital economy, a Salesforce survey found that 76% of global workers don’t feel equipped to operate in new digitally-focused workplaces.
To respond to this gap, organizations must assess their existing workforce and develop active training programs and recruitment strategies to meet the moment.
Benefits of successfully overcoming skills gaps lead to a range of benefits, including:
Skills gaps can exist in various forms. However, generally speaking, they can be separated into three main types:
The concept of skills gaps can sometimes be confused with performance gaps. While similar, they describe different root causes for underperforming staff members.
|Skills gaps||Performance gaps|
|Refer to a lack of knowledge, expertise, or skills preventing an employee from maximizing the potential of a given role.||Refer to a lack of motivation or poor management misdirecting an employee’s efforts.|
|Occur when employees need to gain the skills, knowledge, or capabilities to apply them correctly to a given situation.||Occur when employees have the requisite skills but need more motivation or supervision to apply them effectively.|
|Examples could include understanding how an organization operates, how their work fits within wider processes, or the specific skills needed to fulfill the role, e.g., technical knowledge or soft skills.||Examples could include disgruntled employees with personal grievances in the workplace, new hires being a poor cultural fit, or managers failing to assign or oversee tasks correctly.|
Valamis helps organisations effectively managing skills, adapt to changing business needs, promote employee engagement, and achieve long-term success for everyone.
While many workforces clearly have a problem, addressing skills gaps is challenging. Research from McKinsey found only 33% of capability-building programs always or often achieve the desired results.
So why is it so hard to overcome workforce skill gaps?
Identifying this gap is crucial for Learning & Development (L&D) professionals, as it helps in designing training and development programs that directly address the organization’s needs.
Before you can identify a skills gap, you need to understand where the organization is headed.
What are the long-term and short-term goals?
What skills are required to achieve these goals?
Tip: Regularly revisit and revise objectives to reflect changes in the business environment and organizational strategy.
Examine every job role in the organization. Understand its requirements, responsibilities, and the skills necessary for success.
Tip: Involve both upper management and frontline employees in the analysis to ensure a comprehensive understanding of each role.
Check out our latest Skill-based Talent Management article
Use questionnaires, feedback forms, or interview sessions to gather insights from employees and their managers about their perceived skills and training needs.
Tip: Utilize anonymous surveys to encourage honest feedback and to ensure that employees feel safe sharing their views.
Use online tools (like Valamis), quizzes, or practical tests to evaluate the current skills of employees. Compare the results against the desired skill levels.
Tip: Rotate the types and formats of assessments to cater to different learning styles and reduce the potential for rote learning.
Review performance reviews, project results, and other relevant data to identify areas where employees are falling short.
Tip: Use data visualization tools to spot patterns and trends over time, enabling a more holistic understanding of skill gaps.
Read our recent blogs to gain more insights on the topic: 10 Valuable Training Metrics to Know and How to Measure and Evaluate Training Effectiveness
Develop or utilize existing competency frameworks that detail the knowledge, skills, and abilities required for each role.
Tip: Benchmark your frameworks against industry standards and continuously update them as the industry evolves.
Sometimes clients, suppliers, or other external partners can provide insights into areas where your employees might be lacking.
Tip: Regularly schedule feedback sessions and establish open channels of communication with these stakeholders.
Check industry standards and trends. Are there new tools, technologies, or methodologies that are becoming standard? If so, there might be a skills gap.
Tip: Subscribe to industry newsletters, join relevant professional organizations, and actively engage in forums to stay updated.
Maintain an inventory of current employee skills. This database can help in identifying gaps quickly and can be updated annually or semi-annually.
Tip: Incorporate a digital tool or platform that allows real-time updates and easy access for managers across departments.
Organize group discussions among employees to understand their challenges, the skills they feel they lack, and areas where they believe training could benefit them.
Tip: Ensure that focus groups are diverse in terms of department, seniority, and demographic to get a broad perspective.
There are various ways to fill skills gaps and develop a future-proof workforce. This includes training in the form of:
Or new hiring practices based on filling existing skills gaps and recruiting better-skilled staff.
Addressing workforce gaps requires extensive skill gap analysis, the process of determining the difference between what an organization needs from its staff and what it currently receives.
Skill gap analysis requires effective HR processes to accurately reflect the performance of employees and identify the skillsets and knowledge currently lacking or underdeveloped.
Collaborate with HR: Human Resources usually has data on employee performance, turnover rates, and hiring needs. This information can be valuable in identifying skill gaps. Schedule regular sync-up meetings with HR to ensure alignment in objectives and shared data.
Adopt continuous learning: Instead of occasional training sessions, foster a culture of continuous learning. This ensures that skill development is ongoing and adapts to changing needs. Utilize microlearning and just-in-time training modules that employees can access on demand.
Leverage technology: Use Learning Management Systems (LMS) and other e-learning platforms to deliver timely and effective training. Regularly update and refresh the LMS content, ensuring that materials are current, relevant, and engaging.
Advice: Check out Valamis and its Skills Management features
Stay updated: Ensure you’re aware of industry trends and emerging technologies. Regularly attend seminars, workshops, and conferences. Set up Google alerts or other monitoring tools for industry news and updates.
Customize training programs: Not every employee learns the same way. Offer a mix of training mediums – online courses, workshops, webinars, hands-on training, etc. Use adaptive learning platforms that adjust content based on individual learner’s progress and needs.
Track and measure: Use analytics to measure the effectiveness of training programs. If a program isn’t bridging the skill gap, it might be time to revise it. Incorporate both qualitative and quantitative metrics, and compare them against industry benchmarks when possible.
Seek feedback: After training sessions, seek feedback from participants. This can provide insights into areas that might need further emphasis. Use a mix of feedback tools such as surveys, one-on-one interviews, and digital feedback platforms. Use our Training Evaluation Form.
Pilot programs: Before rolling out a large-scale training program, conduct pilot sessions to gauge its effectiveness and make necessary adjustments. Ensure a diverse group of participants in pilot sessions to gather a wide range of feedback.
External training: Sometimes, the best way to bridge a skills gap is by bringing in external trainers or sending employees for external training programs. Continuously evaluate the effectiveness and relevance of external training providers to ensure quality.
Iterate: The process of identifying and bridging skills gaps is ongoing. Regularly revisit your strategies and make necessary adjustments based on results and feedback. Dedicate a team or individual to monitor the entire process, identify areas of improvement, and ensure that changes are implemented in a timely manner.
By diligently identifying and addressing the skills gap, L&D professionals can ensure that their organizations remain competitive, adaptive, and poised for success in an ever-evolving business landscape.