How to Conduct a Skills Gap Analysis

Does your organisation have the skills it needs to compete today while preparing for future challenges? 

A skills gap analysis can help your business facilitate targeted workforce learning and development by identifying key areas of need. 

Learn how to conduct a skills gap analysis to promote employee development and workforce optimisation.

Here’s a closer look at how to identify gaps in employees’ skills using analytics data.

A skills gap analysis is a structured process used to compare the skills employees currently have with the skills required to perform their jobs effectively. 

Once your organisation identifies the skills its team possesses, you can use targeted training to plug the holes.

Organisations that fail to understand their workforce’s skill levels risk falling behind competitors. As industries evolve, new technologies emerge, and market conditions shift, your business must ensure that employees possess the talent they need to adapt. 

Skills gap analysis supports workforce development and helps leaders align people strategies with long-term business objectives.

A skills gap analysis assists with:

Skills analysis helps your organisation understand which competencies are currently strong and which will be needed in the future. For example, you may find that digital literacy and data analysis skills are in short supply but high demand.

By knowing exactly where the gaps lie, your HR team can make informed decisions about recruitment, training, and succession planning. This improves overall workforce planning and guides employee development initiatives that directly support business goals.

Employees want opportunities to grow. By identifying skills gaps and offering development pathways, your organisation can improve engagement and retention. Workers who feel invested are more motivated, productive, and loyal. 

Ready to see where the talent gaps are within your company? Here’s how to conduct your skills gap analysis. 

The first step is to align the analysis with organisational priorities. For example, if the business plans to expand into international markets, you must prioritise cultural skills and language. 

Next, outline the skills and competencies needed for employees to succeed in their roles. A skills matrix is often used to map role requirements against employee capability. 

Visualising requirements for each role or department can help you identify which areas are in the highest demand.

Next, you’ll need to determine what employees can currently do. Methods may include surveys, performance reviews, or self-assessments. You’ll want to use several different approaches to obtain a more accurate view of each team member’s capabilities.

You can see where the gaps are by comparing current skill levels with role requirements. For instance, a team may excel in customer service but lack advanced data analytics skills.

Not all gaps are equally urgent. Prioritise based on business needs and the strategic direction of the company. 

You’ll also need to identify employees who may be overloaded and get support for them as soon as possible. Otherwise, you may face retention issues due to burnout.

Here are a few approaches for assessing your team’s skills:

Employees can provide valuable insights by rating their own abilities. Surveys allow your organisation to capture perceptions of current competencies. 

However, some employees may undersell or oversell their talents, so you need to include other methods for accuracy.

Managers often have a good grasp of each employee’s strengths and weaknesses. Incorporating skills assessments into performance reviews ensures that insights are tied to measurable outcomes.

A competency framework defines each role’s expected behaviours, knowledge, and abilities. 

You can easily track proficiency levels and create structured workforce reports when combined with a skills matrix.

Modern HR platforms allow leaders to collect, store, and analyse large amounts of workforce data. 

These tools provide visibility into workforce trends, helping businesses use data to make evidence-based decisions.

Once you’ve conducted a skills gap analysis, the question becomes, “How can we plug these holes in our workforce?” You can start closing the gaps by:

One of the most effective ways to address skill shortages is through training. HR leaders can create an employee training plan that targets specific areas for improvement. 

Both classroom-based learning and on-the-job training can be used to build your team’s skills.

You can’t fill all of the gaps at once. With that in mind, you’ll need to focus on critical roles first. Sometimes, gaps are too urgent to upskill internal talent. 

In such cases, you’ll need to look outward and hire new employees with the right skills. Recruitment should be targeted toward competencies that align with long-term organisational needs.

The advantages of on-the-job training can be amplified when you provide mentorship and coaching. 

These opportunities reinforce classroom or on-the-job learning by pairing employees with more experienced colleagues. You can support learning and development while also building chemistry across your team.

Make sure to look out for these pitfalls when conducting a skills gap analysis:

Identifying gaps without enough high-quality data will result in chasing the wrong talent or filling lower-priority roles too early. To ensure the reliability of your data, regularly update employee records and validate assessment results.

Many organisations focus too heavily on technical skills. While they are necessary, soft skills like communication and leadership are invaluable, too. Make sure your analysis and subsequent recruitment efforts are balanced.

If the skills gap analysis is not connected to organisational goals, it risks becoming an isolated HR exercise. Always ensure that identified gaps link directly to business priorities and future workforce planning.

Once you’ve started filling the gaps, use these best practices to monitor and optimise your talent continually:

Employee skills are not static. As roles evolve, you’ll need to update your data to reflect new competencies and gaps. Conduct reviews at least annually to ensure accuracy.

Skills gap analysis should not be a one-off exercise. Instead, it must form part of long-term workforce planning, ensuring the organisation remains agile and prepared for change.

Share your findings with managers and C-suite leaders to promote transparency. You should also update your employees to align with the company’s big-picture objectives. Clear communication fosters collaboration in addressing identified gaps.