How to Conduct an Actionable Skills Gap Analysis

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Skills gaps are on the rise. With a labor shortage still in full swing and predictions that a huge proportion of jobs will be obsolete in the coming years, L&D leaders have long been focusing on upskilling and reskilling programs to help solve these challenges.

But upskilling and reskilling programs require careful and detailed analysis. Without a thorough skills gap analysis that identifies the real business need for new skills in the workforce, learning and development teams may end up pouring resources into upskilling programs that do not meet objectives for learners or the business.

Learn how upskilling and reskilling programs can futureproof your workforce in this free eBook.

The challenges and benefits of upskilling and reskilling programs

There’s no doubt that upskilling and reskilling programs provide immense benefits to the organization.

Giving employees the chance to learn new skills and progress their career opportunities contributes to morale and productivity. It also lowers recruitment costs and alleviates the pressures of hiring during a labor shortage.

L&D teams and their business partners can also leverage upskilling and reskilling programs to look to the future and create a proactive response to predicted skills shortages, rather than firefighting when the time comes.

But upskilling and reskilling programs are only as good as the skills gap analysis that precedes them. L&D and their partners within the organization must carefully assess which skills are business-critical and where upskilling efforts are most needed. Without this level of analysis, upskilling and reskilling becomes a “nice to have,” and L&D may struggle to prove that it’s worth the investment.

Why a skills gap analysis is essential

Conducting a skills gap analysis is beneficial on all fronts.

For the L&D team, it ensures that they are applying precious resources to truly beneficial learning programs which can be directly correlated to business performance.

Learners benefit because they can participate in the process and highlight their wants and needs for upskilling and reskilling. In the long run, this helps to ensure maximum engagement with upskilling programs.

Overall, the organization benefits because L&D have the opportunity to hone in on industry trends, learner feedback, business data, and more to create a highly detailed and targeted upskilling and reskilling program that impacts the bottom line.

How to create a skills gap analysis with actionable outcomes

A skills gap analysis comes down to three main components:

  • Current state 
  • Desired state
  • Data to support both of the above elements

If you can’t accurately measure your current state or provide justification for your desired state, the risk of developing an ineffective upskilling and reskilling program rises exponentially.

1. Current state analysis

Rather than relying on informal feedback from business partners, your current state skills analysis is well worth investing significant time into from the beginning. 

Gather data from:

  • Learners
  • Business partners
  • Learning technology
  • Industry benchmarks
  • Business information systems

Your current state analysis will likely comprise a mixture of quantitative and qualitative data – both are well worth collecting to inform your upskilling and reskilling strategy. 

Once you have leveraged business data and surveys to surface skills requirements (both current and future), you can begin to analyze the current knowledge level of these skills within the organization. This can comprise the collection of performance reviews from managers along with skills assessments of employees. While this is a time consuming and in-depth process, it provides you with reliable data so you know where to focus your team’s resources when it comes to developing new learning programs.

2. Desired state analysis

When it comes to being asked about existing skill levels and desired skills, it’s likely you’ll get a biased response from both management and employees. This is why detailed skills assessments are important, so you get a real world view on where employees are currently at before you start developing an upskilling program based on unreliable data.

Once you have aggregated the wants and needs of business partners and employees against business performance data and hard numbers from skills assessments, a picture of what the business actually needs and the level of new training needed to achieve it starts to form.

From there, you can create a realistic desired state, both in terms of the L&D resources available, projected timelines for implementation, personalized learning paths, and the predicted business outcomes.

3. Skills gap analysis and next steps

By the end of your current state vs. desired state information gathering, you will be able to compare the data to create a realistic gap analysis between where skill levels currently are in the organization, where they need to be, and how quickly this can be accomplished. 

Keeping this step in mind at all times will help ensure your data gathering during the first two phases is always geared towards an actionable outcome: 

  • What skills do we currently have?
  • How much do they need to be leveled up?
  • Which new skills are needed?
  • How long will it take to achieve this?

At this stage, you can work closely with business partners and executives to determine how to prioritize upskilling and reskilling according to your data-driven skills gap analysis.

Ready to get started with upskilling and reskilling? Download this free toolkit to help you stay organized.

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How to Conduct an Actionable Skills Gap Analysis