Why Every Company Needs to Prioritize Skills Gap Analysis

Man jumping across screen and bridging the skills gap in a metaphorical manner.

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The future of work came into focus for many companies over the past year. Priorities shifted, timelines for digitization accelerated and it was revealed that remote work does, indeed, work. As companies retooled and priorities shifted to accommodate changing consumer demands, organizations that embraced technology prospered while those that lagged behind floundered.

Most glaringly apparent, however, were the skills gaps long predicted to be the divider between success and failure. Companies that managed to recruit ahead of the overwhelming demand for emerging must-have skills gained a clear competitive edge.

Future-Proofing Your Workforce

The top ten skillsets of the future, which also happen to be ones predicted to have the most need in coming years, are clustered around four main hubs:

  • Technology use and development
  • Problem-solving
  • Self-management
  • Working with people

Understanding where skills gaps exist in your own organization can help you better plan how to acquire or reskill and upskill your talent to fill them. According to the World Economic Forum, 94% of business leaders now report that they expect employees to pick up new skills on the job, up from 65% in 2018.

These expectations clearly point to the acceptance of the idea that the future of work includes employers taking training and upskilling into their own hands, developing their workforces from the ground up. This creates an opportunity for a new type of recruitment approach, focused on internal talent identification and nurturing as opposed to solely external recruitment.

Why Skills Gap Analysis is Necessary

The World Economic Forum estimates that closing the skills gap could add US$11.5 trillion to global GDP by 2028 and the way to start adding this ROI booster to your talent strategy is through a skills gaps analysis.

A skills gap analysis helps you identify and clarify where gaps exist between your current employees’ skills, and the skills you’ll need employees to have to meet your business goals now and in the future. Once you identify the gaps you can develop a talent strategy that addresses them.

An effective skills gap analysis can provide you with invaluable insights into your workforce and how it is evolving. This allows you to do strategic workforce planning, focusing on how each new hire or upskilled employee can help you achieve your business goals.

Looking at each department in your company starting at the top will allow you to catalog skills and resources and determine where gaps exist.  You’ll be able to identify what skills each individual and team are lacking, and whether reskilling or recruiting is the best option for filling the gaps.

By optimizing your long-term recruitment strategy and anticipating where skills gaps are forming months or years in advance, you can avoid hiring reactively when a skills gap “appears.”  By looking at your existing employees as potentially untapped sources of talent, you can identify opportunities for upskilling and reskilling, to develop your workforce from the inside out.

Plugging skills gaps for individual employees and departments will make your entire organization more efficient and productive. Employee retention will rise, as it always does when you invest in their career development, and you’ll be able to stay one step ahead of competitors who are forced to compete for in-demand skills on the market.

Conducting a Skills Gap Analysis

In order to conduct a skills gap analysis, you need to start by looking at your company’s future goals, and what skills you will need to accomplish them. Once that’s complete, you can use talent intelligence tools to start revealing which of your

Start by defining the future goals of your company. Once you know what you need to accomplish, you can identify what skills your company will need to get there and can start reskilling your existing workforce, which is both more affordable and effective than recruiting for new skills. Automation is a natural extension of this process, and while many fear that automation will eliminate jobs, studies have actually found that it will create more new roles than it will take.

Further Reading

Best Practices for Retraining and Upskilling Your Current Workforce

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Creating a Resilient Workforce with Upskilling and Reskilling

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Experiencing a Knowledge Gap? Retrain and Upskill Your Workforce

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About the author

Jennifer Thomé
By Jennifer Thomé
Jennifer is a content marketing specialist who loves breaking down complex topics, creating enticing content, and getting transformative knowledge into the right hands.