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Skills gap analysis
Identifying the difference between the skills your employees currently have and the skills your business needs to grow.
Skills gap analysis is the process of identifying the difference between the skills your employees currently have and the skills your business needs to achieve its goals. It helps employers spot workforce skills gaps, prioritise training needs, and make informed hiring decisions.
A skills gap assessment can support workforce planning, talent development, and long-term business growth by ensuring the right capabilities are in place at the right time.
This is becoming increasingly important as skills shortages continue across the UK. Recent government data found that 5.1 million people work in occupations classified as being in critical demand. Now, what does that imply?
As competition for skilled talent increases, employers cannot always rely on recruitment alone. Developing existing employees through targeted training and career development is often the faster and more cost-effective solution.
Which is why skills gap analysis is so important.
A skills gap analysis is usually completed in four simple steps:
1. Define the skills needed
Start by identifying the skills required to support your business goals, future projects, and growth plans.
2. Assess current capabilities
Review the skills your employees already have through a skills audit, performance reviews, manager feedback, or competency assessments.
3. Identify the gaps
Compare current capabilities against business requirements to highlight areas where skills are missing or need strengthening.
4. Create an action plan
Decide how to close the gaps. This could involve training, mentoring, upskilling existing employees, reskilling teams, or hiring specialist talent where needed.
Skills gaps can appear in almost any part of a business, especially as technology, customer expectations, and market demands evolve.
Some of the most common areas include:
Most businesses have a sense of where they want to grow. The tricky part is knowing whether their team has the skills to get them there.
A skills gap analysis helps answer that question.
Some of the key benefits include:
In short, it helps you invest in the right people, in the right areas, at the right time.
A 50-person accountancy firm plans to expand its advisory services and move more client processes onto cloud-based platforms.
As part of a skills gap analysis, the business reviews the capabilities of its client-facing team and discovers:
Rather than recruiting several new employees, the firm creates a six-month training programme for existing staff and hires one senior specialist to support the transition.
The analysis helps the business focus its training budget where it's needed most and ensures the team has the skills required to support future growth.
Think of a skills gap analysis as identifying the problem, while a training needs analysis helps determine the solution.
Simply put, a skills gap analysis tells you where the gaps are, while a training needs analysis helps you decide what training is needed to close them.
For most businesses, reviewing skills gaps once or twice a year is enough to keep workforce plans on track. However, it's worth carrying out a review sooner if you're introducing new technology, expanding into new markets, restructuring teams, or taking on major projects.
