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How to conduct a skills gap analysis: a step-by-step guide

December 6, 2019
5 minute read

As your organization grows, the skills you need to execute your business strategy evolve. In other words, what got you to where you are won’t get you to where you’re going. But how do you know which skills you need? And how do you equip your workforce to meet the future needs of your business? That’s where a skills gap analysis comes in.

A skills gap is the difference between the skills your organization needs to successfully execute strategy and those present in your current workforce.

A skills gap analysis can help you identify where those gaps exist. Then you can plan a way to close them—whether that’s through training, hiring, or outsourcing.

When should you conduct a skills gap analysis?

Skills gap analyses aren’t a one-and-done business activity. Whenever you develop or change your business strategy, consider whether your employees have the skills to make it happen. This should encompass both soft skills and technical skills.

Other times you might identify skills gaps include:

  • When you miss business objectives
  • When you’re having problems meeting business goals
  • When you introduce new technologies

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3 steps to a successful skills gap analysis

There are three critical steps to a skills gap analysis: determine the skills and skill levels needed, measure existing skills, and address any gaps. Here’s each in more depth:

1. Identify the skills needed—and the level of proficiency required.

The first step is to consider which skills are needed to execute your business strategy—current and future. Think about the technical and soft skills you’ll need to implement these strategies. The best way to do this is to list out your business objectives and map competencies to each of the objectives.

For instance, if your organization wants to focus on maximizing productivity, you’ll want to focus on skills that will help you achieve that goal. This could be data collection, measurement, and analysis; project management skills; or results-orientation.

Your workforce today might not cut it in the future.

Find the talent gaps in your organization with this skills gap analysis checklist.
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Also, look at trends related to the future of work. 

  • Are there skills that are becoming more prevalent? 
  • What technology will your organization need to adapt to—and build roles around?
  • Are there positions you need to create to accommodate changes in your business model? 

For example, chief security officers weren’t a common role in the early 2000s. This role has become more popular as technology and data security have become integral to business operations.

Once you have a list of required skills, make a note of the desired skill level for each critical skill (e.g., basic, intermediate, advanced). 

2. Measure existing skills.

The next step is to determine the skills your current workforce possesses. This can be accomplished through tools such as:

Compare the results with the skill sets required to execute your business strategy. Make note of any gaps to address.

3. Address skills gaps.

Hiring, training, mentoring, and outsourcing are all options for addressing skills gaps.

Which method you use depends on how soon you need the skill, how quickly the gap could be closed by upskilling existing employees, and your budget for learning and development.

Mentoring

If your current employees have the desired skills but need to advance their competence, mentoring might be a great option for you. While it takes time, it’s one of the least costly ways to upskill your employees. Connect employees with more senior team members who can help then hone and develop the desired skills.

Training

If your budget allows for it, you might hire a professional training firm to develop employees. For example, sales teams may bring in firms like Sandler Training to increase sales and negotiation skills. This allows your employees to learn from seasoned experts who teach this type of content for a living.

Alternatively, if resources allow, you could develop internal training programs—such as those Starbucks offers its employees. These programs often train employees on critical skills that many will need to develop over time—including management, leadership, and communication skills. 

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Hiring

You may find that the best way to fill a skills gap is to bring in a new hire or improve your existing hiring process. 

Whenever you’re hiring, be sure to outline the hiring requirements. What soft skills do they need? What technical skills does the role require? What behavioral traits would the ideal candidate possess? (Read more about creating a thorough job description in this blog.)

Outsourcing

If the skill you need is only for a limited amount of time—such as during a particularly busy period or for a particular project—you may decide to outsource. This allows you to gain the skills you need without bringing on an additional employee.

You might also outsource if you have an ongoing need that doesn’t warrant a full-time hire (e.g., graphic design, videography, public relations, etc.).

Make sure your talent meets the needs of your future business.

Align your people strategy with your business strategy using The Predictive Index—the world’s first talent optimization platform.

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