What Is a Skill Gap? (Plus How To Address One in 4 Steps)

Jennifer Herrity

Updated August 19, 2022

Published February 8, 2021

Jennifer Herrity is a seasoned career services professional with 12+ years of experience in career coaching, recruiting and leadership roles with the purpose of helping others to find their best-fit jobs. She helps people navigate the job search process through one-on-one career coaching, webinars, workshops, articles and career advice videos on Indeed's YouTube channel.

Human resources professionals often support their organizations by evaluating employees. This is important for understanding the current skills of employees and identifying areas of improvement. If an organization doesn't have employees with the skills required to be successful, it may not perform optimally, but learning what a skill gap is and how to address it may help you improve your organization.

In this article, we define what a skill gap is, explain what a skill gap analysis is and why it's important, outline how to conduct a skill gap analysis, provide tips for completing one and discuss the advantages and disadvantages of skill gap analyses.

What is a skill gap?

A skill gap, or skills gap, is the difference between an employee's skills and the skills your company requires for a specific role. Identifying gaps between staff members' actual skill sets and the skills necessary to complete various jobs helps organizations determine how to structure training programs that support employees' skill development. Additionally, understanding the skills gap between staff members and your company's needs can help you find candidates with the necessary qualifications during recruiting and hiring activities.

Related: Overcoming a Skills Gap (With Tips for Increasing Your Skills)

What is a skills gap analysis?

A skills gap analysis is a tool for identifying the various abilities and skills employees need to match specific job requirements. You can use a skills gap analysis to identify the skills staff members need to perform certain tasks more effectively. Additionally, a skills gap analysis provides a quantitative approach to hiring qualified professionals who meet your organization's requirements.

Related: How To Conduct a Skills Gap Analysis (With Definition)

Why is a skills gap analysis important?

Performing a skills gap analysis is an important process for understanding your company's needs and how staff members' skills can meet those needs. Consider the following benefits of conducting a skills gap analysis:

Provides insight into staff's expertise

A skills gap analysis can help you identify which team members possess the highest skill levels for particular areas of your organization's processes. It may also help you what roles aside from their current jobs may be good options for employees based on their skills. Knowing the various skills and capabilities of your team is also important for focusing on areas where staff need to improve.

Supports learning and development

Employees can use the results of their skills gap analysis to find out what skills they need to learn to fulfill their job requirements and advance in their roles. With the information that a skills gap analysis provides, you can support your team's development through individual improvement plans, training programs and workshops. This may also be effective to motivate your employees and improve their productivity.

Related: What Is a Training Needs Assessment?

Improves hiring and recruiting

A skills gap analysis helps you better understand the current status of your organization and its needs. This helps improve hiring and recruiting because you have a better idea of the skills required for specific jobs. As a result, this may help the organization better meet its business objectives in the future.

Related: 13 Recruiting Strategies To Help You Find the Best Candidates

Serves as a foundation for planning

A skills gap analysis can help you ensure that your staff's skills and expertise meet your organization's objectives for future growth. The analysis can also provide insights you can use when planning and implementing employee development programs. It may also help you explore new areas of potential that you may not have previously considered based on abilities of your employees that you discover.

Related: How To Use a Gap Analysis To Increase Performance

How to conduct a skills gap analysis

The following steps include several approaches you can use to plan and implement a skills gap analysis for your workplace:

1. Identify your organization's needs

Use your organization's needs to help you determine the skills and qualifications necessary for achieving business goals. For instance, identify which skills your organization relies on to meet objectives. Use this information to assess which skills your organization needs in the future.

Related: Needs Assessment: Definition, Overview and Examples

2. Evaluate the staff's current skills

Once you understand your organization's current and future skill needs, assess your staff's current skills. Consider providing them with a survey where they list, discuss or rank what skills they have. The results may help you understand the current strengths of the employees and identify areas to improve to fulfill business objectives more effectively.

3. Determine which skills employees need

Use the results of your analysis to identify which areas your team will need to improve in order to fill the skills gap. Compare the results of the survey to the most recent job descriptions to assess how well the lists combine. It may also be helpful to consult with department managers to ensure the lists of required skills are accurate. This allows you to understand the most important areas of improvement for employees.

4. Create learning and development plans

The information from your skills gap analysis can help you create and implement plans for improvement. Evaluate the data to determine what kind of training programs, workshops or courses your team can benefit from in order to learn the required skills. Consider creating training plans specific for each department or job that you can use in the future to help prevent skill gaps.

Read more: How To Create Great Training and Development Plans

Tips for conducting a skills gap analysis

Consider the following helpful tips when you perform a skills gap analysis for your organization:

  • Review future goals and current objectives. Think about your organization's future needs in addition to what it needs to accomplish now. Understanding what your company needs in the future can help you better develop hiring, training and development plans for teams and individuals.

  • Understand how future trends can affect company needs. Having insight into how emerging trends could affect your organization can help you better develop your skills gap analysis. It may help you anticipate how changes may require employees to adapt or learn new skills quickly.

  • Use internal tools and resources for training and development. Consider asking senior team members can help train new and entry-level employees to help reduce costs for outside training materials and personnel. Relying on your internal resources also shows employees that maintaining company culture is your top priority.

  • Identify skills gaps in soft skill areas. While gaps in technical or hard skills may affect an employee's ability to do their job, soft skills are important, too. Look for ways to improve skills like communication, collaboration, customer service and others that may affect business objectives.

Related: Hard Skills vs. Soft Skills: What's the Difference?

Advantages of a skills gap analysis

A skills gap analysis can be beneficial to your organization in several ways, including:

  • Streamlining recruiting processes: A skills gap analysis can help you make your organization's recruiting process more efficient by providing insight into the specific qualifications and skills the business needs. This information gives you the ability to reach out to only qualified candidates for specific job openings.

  • Creating new training methods: This analysis provides information that you can use to create alternative approaches to training employees. For example, if you determine your company's training program is failing to help employees fill skill gaps, you can implement alternative methods that support staff members learning new skills.

  • Gaining a competitive advantage: Training employees and developing their skills may result in improved business processes, higher productivity and higher quality products or services. These factors are essential for helping a company achieve a competitive advantage in the market.

Related: Competitive Advantage: Definition and Examples

Disadvantages of a skills gap analysis

Even with the many advantages of a skills gap analysis, there can be some drawbacks when performing your evaluation, including:

  • Negative impact on employee morale: Although a skills gap analysis focuses on supporting employees' learning and development, observing various gaps between the job's requirements and their actual expertise can sometimes negatively impact employee morale. Encourage staff to view development and improvement as an opportunity to learn new skills and techniques that will help them succeed and continue to advance into the future.

  • Length of time for implementation: A skills gap analysis can be time-consuming, especially if your organization has many employees. However, it can be worthwhile for improving the overall operations of your business, and it's possible to create training plans that you continue to use to help prevent future skill gaps.

  • Costs to perform: Performing a skills gap analysis could increase your costs because it may affect productivity, and addressing the gap may be expensive because of training needs. However, conducting the analysis gradually and exploring internal training opportunities before investing in external resources may help you save.

Explore more articles