How to Conduct a Skills Gap Analysis and Design Training Programs

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According to the Future of Jobs Report, employers are hoping to redeploy around 50% of staff displaced by augmentation or artificial intelligence instead of increasing redundancies.

That’s great news, right?

However, the same report also found that roughly 94% of employers expect workers to pick up new skills on the job. So, it’s clear that skills gaps are going to start opening up.

The answer to bridging these internal knowledge voids is by conducting a skills gap analysis.

But what are these reviews? When do you need to conduct one, and how would that happen?

TL;DR – How to Conduct a Skills Gap Analysis

As with most training processes, there are clear steps to conducting a skills gap analysis. We’ll cover these five steps in more detail shortly.

But, for now, they are:

  1. Plan your analysis
  2. Identify skills required by the business
  3. Assess current competency level
  4. Close skill gaps
  5. Review skill levels regularly

Following this process will allow managers, supervisors, or owners to define where skill uplifts are required. However, it’s also important to leverage your analysis to highlight training areas in priority order. Trying to change too much too soon will inevitably affect the quality of training.

All this may seem like an in-depth task. However, passing a Train the Trainer course with TSW Training will give you all the knowledge needed to complete these critical analyses.

A person is using a tablet with a pen, focusing intently on the screen.

What is a Skills Gap Analysis?

A skills gap analysis is a crucial comprehension assessment designed to overview the level of competency in your business.

At its core, a skills or competency gap analysis measures your company’s progress toward its goals. If you want to achieve your business goals, conducting regular training gap analyses is vital.

Once any gaps in your business’s skills have been identified, it’s then up to employers to define how to fill the holes.

The three common ways to fill knowledge gaps are: 

  1. Training 
  2. Hiring new staff 
  3. Outsourcing to experts

Option one is the optimal way to keep knowledge in your business and invest in your team’s personal development. Training staff is also a great way to improve your workplace culture. Plus, a LinkedIn Workplace Learning Report found that 7 out of 10 people say learning improves their connection to a business, while 8 in 10 said learning added purpose to their work.

However, if the gaps defined are too large to be bridged via training, you may need to consider alternatives.

Overhead view of two professionals working on laptops.

Why is a Skills Gap Analysis Useful?

As we mentioned, a skills gap analysis highlights your business’s position about your corporate goals from a training and employee competency perspective.

But there are more wider-arching benefits to completing these overviews:

  • Identify improvement opportunities: Skill gap analysis is specifically crafted to help organisations define the holes in understanding throughout their business, then implement corrective measures.
  • Increase productivity: According to a study by American training firm Associated Talent Development (ATD), well-trained employees bring in 218% more income on average than untrained staff.
  • Enhance staff retention rates: Businesses that regularly invest in staff training can see retention rates improve by as much as 50%.
  • Improve employee engagement: Research by Gallup has shown that only 23% of employees worldwide are “engaged. The same study also discovered that personal development is one of the main drivers for staff engagement.

It highlighted that improved engagement had the following knock-on effects:

    • 81% decrease in absenteeism
    • 64% decrease in safety incidents
    • 23% uplift in profitability
    • 18% increase in sales productivity
  • Enhance corporate agility: Finally, when team members close their skill gaps and learn new processes or roles, the business can be more agile to shifts in the industrial landscape.

Skills Gap Analysis Examples

Let’s look at an example competency gap analysis from a manufacturing firm supplying precision-engineered components.

Skill Area Current Proficiency Level Required Proficiency Level Gap Identified Skill Importance
Machine Operation 4 5 No 5
Quality Control 3 4 Yes 4
Lean Manufacturing 2 4 Yes 5
Technical Troubleshooting 4 5 No 3
Health & Safety 5 5 No 5
Inventory Management 3 4 Yes 4

The above table shows some core skills and the current competency levels vs. the levels required to highlight where gaps exist.

These have been attributed a number from 1 – 5, where one equals “doesn’t have this skill” and five equals “expert” level of comprehension.

We’ve also included a section for “Skill Importance.” This helps define a priority order for closing those skills gaps. Tasks marked “5” in this column should be tackled first from a training perspective.

Alternatively, if you struggle to prioritise tasks, the Eisenhower Matrix offers a simpler way to order roles by organising them into – Do, Schedule, Delegate, and Delete quadrants.

Using a number format to denote skill levels and importance rather than using terms like “intermediate” or “advanced” can reduce ambiguity in the results.

Methods to Assess Employee Skills and Find Gaps

When conducting a critical skills gap analysis, it’s important to ascertain where your team’s knowledge holes exist. Determining these areas will be key to achieving positive results from the training.

There are many ways to gather this data in your workplace.

However, some of the most trusted methods are:

  • KPIs (Key Performance Indicators): Monitoring your business’s KPIs continuously can help you determine your progress toward achieving your goals. This method can also be used at a departmental level to identify which areas of the organisation are falling behind.
  • Individual assessments: An employee conducts a personal skills gap analysis to review their performance and level of competency. The Gibbs Reflective Cycle can be an effective tool for examining your processes.
  • Manager observations: A line manager or team leader evaluates an employee’s skill level from an external standpoint.
  • Peer assessments: An alternative option that could be energetic for your company culture would be to have coworkers review each other. This could also aid in knowledge sharing to bridge the smallest gaps in your business.
  • 360 analysis: The 360 feedback method combines all the above into one approach. In this method, employees, managers, and other key stakeholders review a worker or manager.

These methods for understanding where the gaps in your team’s knowledge exist are excellent starting points for crafting useful development processes.

But, to make the most of this review, it pays to ensure that key members of your organization (like managers, team leaders, or supervisors) benefit from Train the Trainer coaching. TSW Training provides this coaching via a two-day course or through e-learning modules.

Team of professionals engaged in a business meeting around a laptop.

Skills Gap Analysis Checklist

To simplify the process of conducting a comprehensive skills gap analysis, employers and managers can follow this checklist:

  • Evaluate individual employees
  • Compare their skill levels to those required by the business
  • List key skills required
  • Review initial job descriptions in relation to the current workload
  • Define how the role has changed over time
  • Interview employees
  • Overview of recent performance reviews or 1-2-1’s
  • Note any training opportunities as a result
  • Hire additional resources if necessary.

Man in white shirt contemplating at desk with pen and documents.

How to Conduct a Skills Gap Analysis and Design Effective Training Programs

Conducting skill gap analysis should follow a simple five-step process. Let’s look at each step in more detail now.

1. Plan Your Analysis

Robust skill gap analysis should always begin with an initial planning stage. Here, you can ascertain the scope of your development project by defining whether you will conduct analysis individually or across whole teams/departments.

The pragmatic and sensible way to plan this step is to allow line managers and team leaders to review individuals or teams within their remit. Each manager will know the team’s best individuals and have a keen understanding of the daily tasks being undertaken.

2. Identify Skills Required

Step two involves defining the core skills required to effectively complete the tasks in a specific job role or team. Focus on the here and now, but you should also factor future business goals into this analysis and highlight what improvements must be made to achieve those.

Some useful questions to ask at this stage are:

  • What skills does the business need now?
  • Are those skills going to be important moving forward?
  • How will this role/task/team change in the future?
  • Are there any new methods/practices that need to be learned? (This could cover new technology, too)
  • What positions are at risk of becoming automated?
  • Is there growth potential? (i.e., are there any jobs that don’t exist now but could be in the future?)

It can be a useful exercise at this stage to compare the current roles being carried out in your team with their respective job descriptions. How have they augmented over time? Will they continue to shift going forward?

Office workers in a boardroom with a speaker writing on a whiteboard.

3. Assess Current Competency Level

At this point, you can utilise those training methods (KPIs, individual assessments, peer reviews, manager reviews and 360 feedback) we highlighted earlier to define a baseline of what gaps exist in your team.

4. Close Skill Gaps

Now that you have plotted the gaps, it’s time to fill them out. Development and coaching is the most holistic way of bridging those existing gaps. For specific individual-based analysis, you could implement personal development plans (PDPs).

Leveraging PDPs allows you to:

  • Plot a managed roadmap for training
  • Stay across dips in performance
  • Easily track subject comprehension
  • Tie training to professional reviews. 

5. Review Skill Levels Regularly

Once you have taken the time to analyse the skills in your business and implement training plans to improve them, you need to schedule consistent reviews. 

A recent study by Deloitte found that 84% of respondents agreed that constantly developing your team through professional training is important.

Businessperson with pen and clipboard ready to write, in plaid jacket.

Frequently Asked Questions (FAQs)

Here are some frequently asked questions about skills gap analysis:

What is a Skills Gap?

A skills gap can be considered as a hole in knowledge that prevents someone from progressing in their role.

Completing Train the Trainer coaching with TSW Training ensures you have the best possible talent leading your business’s development opportunities. This, in turn, will help more members of your team close their skill gaps, thus driving the business forward.

What are the Best Skill Gap Analysis Tools?

There isn’t a silver bullet approach to completing effective skill gap analysis.

But there are some top tools to help expedite the process:

  • Completing Train the Trainer courses to ensure the most effective coaching.
  • Implement 360 feedback methods to create a more holistic approach.
  • Encourage personal reviews via the Gibbs Reflective Cycle.
  • Develop specific personal development programs to reduce gaps.
  • Focus on enhancing soft skills to understand gaps like communication and collaboration.

Which Part of the Gaps Analysis Do Career Strategies Fall Under?

Career strategies fall under the skills gap analysis section, which looks forward to setting clear goals for training. To effectively manage career strategies, managers or employers should ensure that they set SMART goals that are attainable and trackable via catch-ups.

Conclusion

A skills gap analysis is a perfect way to develop the culture, creativity, and competence in your business.

As mentioned, investing in your team’s education has several benefits, including driving productivity and profits. Conversely, falling behind on employee training opportunities can be disastrous for businesses.

However, for effective skill gap analyses, employers, managers, and leaders should qualify through the Train the Trainer examinations with TSW Training.

Our flexible and effective course is perfect for those who want to improve themselves while gaining the information to assist others with their professional growth journeys.

Picture of Matthew Channell
Matthew Channell
Matthew is TSW Training’s Commercial Director. He writes about performance focussed learning, leadership, and management approaches that have real-world, sustainable impact.
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