How to Identify & Address Skills Gaps

Though you may hire qualified candidates, it’s impossible to have all the necessary skills in a workplace. As market trends shift and technology advances, it’s inevitable that you’ll discover skills gaps in your organization. This is the difference between current employee competencies and the optimal skillsets for their roles.

Having gaps in your talent can reduce performance and output potential. So, how can you identify and address skills gaps? In this article, we’ll dive deeper into the reality of today’s skills gaps, how you can identify them in your organization, and what to do about them.

What is a Skills Gap?

A skills gap is the difference between the ideal skills your employees need to have and the skills that they currently possess. In other words, there’s a variance between ideal company performance and actual. This could be the result of poor hiring practices, but usually, it’s linked to development opportunities once hired.

Often, skills gaps become obvious when you notice a negative shift in company performance. But this doesn’t always mean that employees are being slack or underperforming. Often the issue is that a company doesn’t track the natural shift in roles due to advancements and industry trends. Workers are performing their regular duties, but industry standards have moved beyond that.

The Impact of Skills Gaps

When we experienced the first Industrial Revolution, skill requirements shifted drastically. People needed to learn how to use machinery to keep working. Today, technology and AI are rapidly transforming how we work. Consequently, the World Economic Forum estimates that 54% of all workers need to update or replace their skills.

Some industries are suffering more than others, such as manufacturing. The result of these skills gaps includes decreased production, increased costs, and higher unemployment.

Realizing that your organization has skills gaps? Don’t worry, you’re not alone. According to McKinsey, 87% of companies are aware that they either already have a skills gap, or will have one within a few years. Deloitte reported that skills shortages were among the top three biggest business disruptors in 2022. So what can you do about it?

How to Identify a Skills Gap in Your Organization

Identifying skills gaps in your organization will help you determine what training or hiring practices require attention. There are several ways to do so.

1. Key Performance Indicators

Key performance indicators (KPIs) are quantifiable measures of performance with a specific objective in mind. They’re effective in giving employees targets to aim for and measure progress. You can use KPIs to track career progression and performance dips, so it’s useful for identifying skills gaps.

2. 360-Degree Feedback

Feedback can offer holistic perspectives regarding employee performance. Managers, colleagues, clients, and employees themselves will provide useful data. Using surveys and conducting interviews, you’ll get a 360-degree analysis of what’s working well and what needs improving. You can then make a skills development plan based on feedback.

3. Managerial Advice

Managers know the employees of your organization best. They understand what skills are required by individual team members and the daily tasks they perform. These leaders will also have ongoing performance and productivity insights. Ask for their advice. Discuss what skills they believe are missing and ideas on training methods.

4. Skills Gap Analysis

A skills gap analysis is the most effective way to identify skills gaps. Start by creating an inventory of current employee skills. Identify job outcomes, collect data from your 360-degree feedback, and compare employee performance against company goals. Then you can develop action plans to determine what new skills are required. It’s helpful to use a step-by-step guide like this one.

It’s also worth taking a step back and considering your training practices. Are you upskilling your employees regularly? Do you have scheduled training sessions? Are you using resources such as online courses, webinars, and mentoring? Remember that it’s in your best interest to invest in employee skills development.

Addressing This Information

Most businesses can’t afford to just lose and hire talent carelessly. Once you’ve identified skills gaps in your organization – don’t panic! You don’t need to fire all these employees. Instead, you need a strategy to help them grow. Investing in your employees makes them feel valued. They’re therefore more likely to stick around and continue to grow with your company.

Short-term fixes can improve overall performance quickly. This includes quick courses or training opportunities to develop a specific missing skill. As with anything, however, long-term solutions are more desirable.

Hire for Attitude, Train for Skills

You’ve likely heard it before – hire for attitude, train for skills. It’s important to look for candidates with a desire to learn. You can then provide opportunities for upskilling both soft and hard skills to develop the ideal workforce.

A LinkedIn survey found that 76% of Gen Z believe learning is the key to a successful career. To remain competitive in the market and combat skills gaps, employers must offer development opportunities. In-house training, job swaps, stretch assignments, self-paced online courses, suggested webinars, and reimbursed certificates are just a few things to consider.

Unless you’re offering development opportunities to address skills gaps, you’ll likely start losing your talent to competitors. This won’t just widen the gap, but it’ll cost a lot, too. Be proactive about talent management and have a plan. This way your organization can remain on top of its skills gaps and foster a flexible, future-proof workforce.