IBM’s latest research reveals a stark reality: By 2026, AI and automation will force nearly half of all workers to rebuild their skillsets. The good news? Companies that act now to bridge these gaps won’t just survive this shift—they’ll thrive in it.
In fact, companies that prioritize developing key skills across their workforce are 63% more likely to hit their goals and 52% more likely to innovate than their peers.
With these findings in mind, HR teams can stay ahead by understanding their team’s current skill set and identifying areas for growth. As advancements in digital transformation continue, a skill gap analysis isn’t just helpful; it’s essential. Addressing the gap between your team’s current skills and those needed for the future–short-term or long-term–creates a strategic opportunity to drive innovation and boost performance.
What is a Skill Gap Analysis?
A skill gap analysis is a type of workforce assessment that pinpoints the gap between the skills your organization currently has and the skills required to meet your goals. It enables HR and workforce teams to identify which roles are under-resourced and to effectively prioritize targeted recruitment, reskilling, or upskilling initiatives.
Beyond highlighting these gaps, these analyses provide a blueprint for future workforce planning. By understanding where your business needs to evolve, a skill gap analysis can help you strategically invest in the training, hiring, and development efforts that will help your business thrive.
In short, a skill gap analysis evaluates your employees’ current skill sets, pinpoints areas of opportunity, and outlines a development plan to bridge the gap. This strategic assessment:
- Maps the capabilities of your current workforce
- Identifies critical missing competencies and skills
- Creates a blueprint for talent development
Key Benefits of Conducting a Skill Gap Analysis
1. Strategic Workforce Planning
With a skill gap analysis, HR teams can align workforce plans with the company’s overall goals. An analysis can determine whether an organization should conduct an employee reskilling program, a cross-training initiative, or hire new talent with in-demand skills.
2. Better Hiring Decisions
In a talent market where every hire counts, a skill gap analysis can help you learn exactly which abilities you need to target. A skill gap analysis takes the guesswork out of hiring by pinpointing the specific skills your team is missing, helping you hire more strategically and effectively.
3. Improved Training and Development
According to BCG, more than half of workers have reported they’re ready to enroll in a reskilling program. Investing in training programs can be time-consuming and costly, but knowing exactly where skill gaps lie allows you to take a strategic approach to employee development.
4. Enhanced Productivity and Innovation
When teams lack key skills, productivity and innovation suffer. A skill gap analysis helps ensure that your workforce has the skills needed to embrace new technologies and processes, driving both efficiency and creativity across teams.
How to Conduct a Skill Gap Analysis: The Process
Conducting a skill gap analysis may seem like a big project, but breaking it down into steps–and partnering with a market intelligence provider–can make the process more manageable and impactful.
- Define Future Skill Requirements: Start by identifying your company’s strategic goals. What initiatives take priority for the next 2-4 years? What skills are required to achieve those objectives?
- Assess and Evaluate Current Skills: Perform a comprehensive review of your workforce’s current skills. You can do this by collecting data from employee surveys, performance reviews, manager interviews, or custom skill assessments. For best results, make sure your method for skill evaluation is consistent. To do this in less time, consider partnering with a skill-driven data provider like Rhetorik.
- Identify Gaps and Risk Areas: Compare future needs with current skills to identify gaps. Where is your team falling short? Is there a lack of expertise across any emerging technologies? At this stage, it’s helpful to prioritize which gaps are most critical to key business initiatives.
- Create An Action Plan: Now that you’ve identified skill requirements, conducted an audit, and prioritized key skill needs, it’s time to build a roadmap. Depending on your budget and the size of your organization, this might include developing new training programs, starting targeted recruitment efforts, or supporting resource reallocations. Don’t forget to set measurable milestones to track your progress.
Manual vs. Automated Skill Assessments
As we’ve mentioned above, it’s possible to identify and benchmark your employees’ current skills through manual methods–but they often come at a high cost. Employee surveys often suffer from self-reporting bias. Performance reviews only capture a snapshot in time. Formal skill assessments can be lengthy to administer and complete, and gathering comprehensive manager and peer feedback can take months—by which time your skill landscape may have already shifted.
The result? Leading companies are partnering with professional data providers to create cutting-edge skill gap analyses and make better decisions for their workforce.
By partnering with a specialized skill data provider, you can turn a complex project into a strategic advantage. With Rhetorik’s AI-powered platform, you can assess employee skills and market trends with ease, helping you craft smarter hiring strategies, targeted upskilling programs, and more.
Learn more about our custom-built skill taxonomy here–it’s why HR and workforce teams trust us to take their organization’s talent to the next level.
