Employee skill gaps: What they are and how to address them

Employee skill gaps can negatively impact productivity, efficiency, and overall business success. Do your employees possess all the skills required to do their jobs properly?

If you’re like most organizations, the answer is no.

According to a study by McKinsey & Company, a whopping 87% of companies worldwide either already have a skills gap or will have one within a few years.

Skill shortages can take many forms, as sometimes employees lack technical skills (HTML, SEO, programming, etc.), hard skills (industry-specific skills like web design for tech), or soft skills (time management, creativity, empathy, etc.).

Because of this, human resources departments must A) ensure the hiring process selects highly skilled workers and B) conduct regular skills gap analyses on all employees.

With new technologies like artificial intelligence popping up constantly, there are always new skills for employees to acquire. This is why it can be challenging to avoid skills gaps.

Yet, if you want your organization to fire on all cylinders, you must do your best to limit and eliminate skills gaps whenever possible.

There’s a lot to know, so I put together this comprehensive guide on employee skills gaps, so stick around and learn everything you need to know.

What is an Employee Skill Gaps Analyses?

A skill gap occurs whenever an employee’s existing skill set only encompasses some of the required skills for their job role.

An example would be hiring a graphic designer who, while highly talented, isn’t familiar with the design software you use – even though it was a necessary skill listed in the job description.

As a result, you’d need to invest in a training program (or at least show them a few tutorial videos) to get them up to speed with your system.

Why would you choose to hire a graphic designer who didn’t possess every individual skill on the job listing?

There are several reasons why. Let’s say they were the most qualified candidate out of the bunch – even instead of their lack of familiarity with your software.

Hiring managers may prioritize exceptional talent over a complete skill set, opting to hire an individual with a skill gap. This decision recognizes that while the new hire may need additional training, their overall potential outweighs the temporary inconvenience. Investing in training for a highly talented individual is often a worthwhile trade-off for long-term gains in productivity and creativity.

Other times, a small talent pool paired with many open positions can lead to new hires needing more of the required skills.

This is increasingly common in today’s age, as there’s currently an $8.5 trillion talent shortage worldwide. According to a report by Korn Ferry, more than 85 million jobs could go unfilled by 2030 due to a lack of skilled employees.

Yannick Binvel, the president of Korn Ferry’s Global Industrial Markets practice, said: “Governments and organizations must make talent strategy a key priority and take steps now to educate, train, and upskill their existing workforces.”

It’s an alarming prediction that reinforces the need to identify and reduce skills gaps to ensure they don’t come to fruition.

Skills gaps can also occur due to:

• Poor recruitment
• Changes in roles or responsibilities
• A lack of experience
• Inadequate training programs
• A lack of employee development

Why Are Regular Employee Skill Gaps Analyses Important?

If you want your organization to enjoy a competitive advantage via high productivity and engagement – then regular skill gap analyses are necessary.

They’re how you ensure your workforce possesses the right skills to meet your business goals.

A skills gap analysis will help you:

• Better understand your company’s needs (i.e., more training programs, better equipment, more robust hiring standards, etc.).
• Gain insight into your employee’s expertise.
• Identify your top areas for improvement.
• Develop initiatives for reskilling and upskilling.

Building a skills gap analysis process will offer a roadmap for better workforce planning, so it’s worth your time.

Here’s a closer look at the benefits of analyzing your employees’ skills.

Identify Your Top Training Needs

What’s your current training process like? Are you equipping your new hires with the skills they need to complete their tasks correctly?

One of the top benefits of a skills gap analysis is that it lets you gauge the effectiveness of your current training programs.

If you discover that your new employees are struggling to handle their responsibilities, it could be a sign that your onboarding process needs work.

This is especially true if your hiring process is in good shape. Suppose your recruiters hire employees with virtually all the skills listed in the job descriptions, but you’re still experiencing skill gaps. In that case, your training process is likely the culprit.

Take an in-depth look at your current onboarding process. Are your employees receiving enough training on your software programs, policies, and procedures? If not, it’s time to return to the drawing board and redesign your training process.

Gain Insight Into Employee Expertise

Regular skill gap analyses will help you understand your existing employees’ core competencies.

This will let you know which employees are the most skilled in each department, which can yield numerous benefits. For one, you could designate them as the official trainers for their respective departments. This will help get new employees up to speed quickly.

For two, you can brainstorm other positions aligning with the employee’s current skills, offering opportunities for advancement and employee development.

Develop Initiatives for Reskilling and Upskilling

Lastly, skill gap analyses will shed light on positions that need reskilling and upskilling.

What are those?

Reskilling is where you add new skills to an employee’s existing repertoire. It should be distinct from retraining, where you teach employees a skill they already know. Reskilling is necessary whenever new technologies add new skills to existing positions (like artificial intelligence or automation programs).

Upskilling involves expanding on an employee’s existing skillset and knowledge. An example would be learning a more advanced version of software they already know. Upskilling also teaches new skills that directly apply to an employee’s existing knowledge base.

You will know if a position needs reskilling or upskilling once you do a skills gap analysis. This is why they’re so important.

Better Understand Your Company’s Needs

Analyzing potential skill gaps in your employees will help you pinpoint your primary areas for improvement.

For instance, if you discover your skill gaps are primarily due to haphazard hiring procedures, it’s clear that you need to improve your recruitment process.

Conversely, if the evidence points to a lack of employee development, focusing on mentoring and skills development is the way to go.

How to Conduct an Employee Skill Gaps Analysis at Your Organization

As stated in the intro, skills gaps are prevalent, as they currently affect (or will affect) 87% of companies worldwide.

One reason they’re so prevalent is how sneaky they can sometimes be.

New technologies and working norms can add new skills to job positions without anyone realizing it.

The shift to remote work due to the COVID-19 pandemic presented new challenges for managers. It required them to acquire skills in managing remote teams. This unexpected change highlighted the need for adaptability and continuous learning in the evolving workplace.

Remote workers also had to adjust to new ways of doing things. This included using digital time-tracking software and handling meetings virtually instead of in person.

These skill gaps are easier to recognize if you do regular skill gap analyses, so let’s learn how to conduct one.

Step #1: Outline Your Organization’s Objectives

The first step is determining your overall business goals for the quarter/year.

Are you trying to generate more revenue, improve engagement, or scale your operations?

Defining your business goals will help you determine which skills are necessary to make them happen.

For example, if your goal is to improve your employee engagement levels, then you should aim to hire HR professionals who have the following skills:

• Employee relations
• Onboarding expertise
• Teamwork
• Experience with improving engagement levels

As you can see, these skills align with your business objectives. This is how you should formulate the skills for all your positions.

After all, you’re guaranteed a skills gap at your organization if you don’t first define appropriate and up-to-date skills for each position.

Step #2: Take Stock of Your Employee’s Current Skills

Next, you should ‘take inventory‘ of your employee’s current skill sets.

In other words, you should have each employee create a list of their skills ranked in order of competency.

This will give you a complete overview of your employees’ skills, which you can then compare to the list of skills you need (that you created in Step 1).

While a lot of data is involved, this is one of the most reliable ways to identify crucial skill gaps. Going with the employee engagement example from above, let’s say you discover your recruiters don’t list onboarding expertise as one of their current skills.

That’s a sign of a skill gap with your hiring team, so training them on onboarding best practices is a must.

This is just one example of how you can juxtapose your employee’s current skills with the skills you need to meet your business goals.

Step #3: Pinpoint the Skills Employees Need Most

After you’ve compared both lists, you can create a list of ‘missing skills’ that your employees need to learn. Then you need to add to job descriptions in the future.

You may discover that your employees need to learn more skills than you have the training budget for, so you’ll have to prioritize.

This is where the list of skills necessary to meet your business goals (that you created in step 1) really comes in handy. Take a look at it again, but this time, highlight the most important skills to your objectives.

These are the skills you should invest in the most.

That’s not to say that the other skills on the list aren’t critical; you should save them for later.

Step #4: Create Training, Learning, and Skill Development Programs

The final step is to teach the missing skills to your employees via training programs, mentoring, and workshops.

If your goal is to upskill your employees, mentoring and cross-training are two effective techniques. If you’re focused on reskilling, you’ll benefit more from workshops and training programs.

Also, some employees may require individual improvement/development plans to teach them the necessary skills they need to succeed in their roles.

For example, if an employee needs to learn a complex technical skill like web development, they won’t be able to master it overnight (or during a brief training program).

Instead, they’ll need a detailed development plan that provides specific milestones as they learn the ins and outs of web development.

Final Thoughts: Employee Skill Gaps

Skill gaps may be highly prevalent, but they are still solvable.

Conducting regular skill gap analyses will help you reduce or eliminate any missing skills in your organization. This is why they’re crucial for improving performance and productivity.

Beyond that, they’re also pivotal for ensuring new hires possess the right skills to help you achieve your business goals. So, it would help if you made skill gap analyses a permanent addition to your HR department’s tasks.