Skills gap analysis guide: What every recruiter needs to know

An example of a skills gap analysis for Customer Success Manager position

Smart recruiters always seek to develop their skills in the field of strategic recruitment, which is why we’re going to give another sharp tool to add to your recruitment shed – skills gap analysis.

Why are we even talking about a skills gap, and why is it an issue?

  • Even though the percentage of the population with advanced degrees has risen, not all degrees provide the skills the market needs.
  • The shortage of workers in the skilled trades industries is growing more acute every year.
  • STEM industries have experienced the most significant skills gap among workers due to the lack of technology-related education and training.
  • According to a recent study, 2/3 of UK companies face the challenge of the digital skills gap.
  • The Boomer generation is exiting the workforce, leaving open highly-skilled jobs that members of younger generations have not had the time or training to fill.
  • By 2030, talent shortages in the U.S. alone are expected to result in $162 billion in unrealised revenue.
  • An estimated 20% of the workforce in the UK will be significantly underskilled for their jobs by 2030. This could amount to around 6.5 million people.

These statistics show that the skills gap makes the talent search even more difficult. But we got this, HR community!

Skills gap analysis can be a crucial means of building and optimising internal talent for organisations and reaching the kind of talent that the organisation needs. Thus helping close the gap.

The skills gap is widening in the US according to a recent report
Results of Wiley’s latest annual Closing the Skills Gap report conducted among 600 US HR professionals.

What is a skills gap analysis?

Organisations use a skills gap analysis to measure the difference between the current, actual state and the desired future state of the skills in their workforce.

The skills gap analysis can be done on two levels:

  1. Businesses apply the gap measurement to individuals and their skillsets to see if there are gaps between what each employee can currently do – and which skills they need to develop to do their job.
  2. By carrying out this kind of gap analysis on an individual employee basis, the data can be aggregated to the team or business level, and HR can look at ways of addressing organisational skills gaps.

The gap can then be closed through training and development, upskilling and reskilling strategies, succession planning, etc.

Why is it important to conduct a skills gap analysis?

Skills gap analysis allows businesses to create development plans that mitigate their skills gaps.

The results are also extremely useful for recruitment purposes. HR managers can first assess what skills are needed for a job position before it’s advertised, and then the same analysis can be used to assess candidates who apply. Additionally, adding the required skills on your landing page and job ad helps candidates qualify or disqualify themselves early on, leaving you with higher-quality candidates.

This way, conducting a skills gap analysis makes the recruitment process slicker, as it helps hiring managers pinpoint candidates whose experience, skills, and qualifications meet the identified needs of the role and the business.

The main reasons to carry out a skills gap analysis are:

  1. To assess employee expertise across the business and to see hotspots of skills and expertise in certain teams. This can help to identify areas for learning and development, succession planning, etc.
  2. To support L&D programmes to help employees progress their careers and to close skills gaps at an organisation level.
  3. To get better outcomes from recruitment, by helping managers to make more informed decisions during the process that better match candidates to the specific needs of a role.
  4. To provide vital data for planning, especially if businesses are planning a change. For example, if a business is thinking of investing in new company-wide software, it can assess IT competencies beforehand to see what kinds of training might be needed to get everyone on board.

The impact of skills analysis on your recruitment strategy

A skills gap analysis gives you structure, rigour and insight – all vital attributes for a successful, data-driven recruitment strategy.

Today’s recruiters need to be as smart as possible when finding and securing the best talent for the business. The skills gap analysis can help by accurately pinpointing the skills and expertise that a particular role needs and then deliberately matching candidates to this skills profile. The analysis removes the guesswork and enables objective comparison between different candidates, helping managers make accurate, informed decisions without the risk of subjective bias. This helps contribute to a diverse recruitment strategy.

How to conduct a skills gap analysis

Every business will approach its skills gap analysis in a slightly different way, but these are typically the main steps involved:

Scope the challenge

It’s vital to identify the necessary skills that your business needs. So, the skills gap analysis can help you to do this by guiding you through a series of questions. These could be:

  • Which skills are critical for this function/position/team?
  • What are your business mission and goals?
  • What skills does your business need to achieve these?
  • Which jobs within your industry or business are likely to be automated in the near future?
  • Which skills are likely to be more in demand in your business?
  • What kinds of roles is your business likely to need in the near future that it may not employ now?
  • How much impact does this skill have on your performance goals?

Gather and analyse data

Step two involves gathering the data or answers for the questions in stage 1.

This helps see which tasks are currently being done, assess how vital these tasks are, and look at the skills needed to do the business’s work properly. To do this, the business can:

  • Create job roles for the business and identify which skills are essential for delivering each role
  • Carrying out an audit of the business employee base’s existing skills and assessing each level and competency that employees are currently at.

The data from the skills gap analysis will show you where interventions can be targeted to close the gap between the business’s desired point and the current state of play. There are different ways to achieve this, primarily:

  1. To further train and develop existing employees
  2. To redesign jobs
  3. To recruit new people with the right skills

Most organisations will use a combination of the above strategies to achieve the desired results. For example, one of the biggest challenges facing businesses at the moment regards digital skills and the need to upskill entire workforces to handle new software and technology. Organisations can invest in comprehensive training programmes, bring in people who already have those skills to take on key transformational roles and adjust roles to optimise the use of automation and human skills.

An example skills gap analysis

Below is a skills gap analysis example for a Customer Success Manager (CSM) position at the team level in a hypothetical tech company.

We have determined 6 of the most important skills for this position.

An example of a skills gap analysis for Customer Success Manager position
Skills scored on a scale of 1-5 (1= inadequate, 5= expert). Importance from Low to High.

As we know, CSM positions require a high level of communication skills.

In our example, most of the complaints run through chatbox or email. Therefore, written communication is especially important and high importance. Verbal communication is also important but not the most used form of communication. Therefore, the requirements for this skill are lower.

Problem-solving is vital in this position – the target score is ‘5’, meaning that CSM should be an expert in this skill and be able to train others to reach the same level. Luckily, our hypothetical company’s current Customer Success Managers are already on top level! 

Product knowledge is moderately important. The CSM does not need to know all the intricacies of the product (like the development team) but should be able to assist customers and know where to find the answers to their problems.

Critical thinking is highly important because a CSM should be able to prioritise the issues, understand their root, and respond quickly with a solution.

Empathy is moderately important in our case – as CSM deals with client complaints and problems daily, they should understand the customer. However, it is not as important as it would be in the case of a person who deals with people hands-on, like caregivers or therapists.

In our example, our current state in the last two skills is 2 points below the target score and should be the focus of L&D. Written communication is one point below our target and should be analysed to determine whether it needs attention on the individual or team level. And act accordingly.

Product training should also be offered to increase the skill level of product knowledge to increase the quality of customer service.

How to close the skill gap in your company

At a time when businesses are aware of the great skills challenges needed to remain competitive in the future, it’s vital to know exactly how the workforce is already placed when it comes to existing skills and competencies. This is all the more important as businesses and organisations start to think about using AI and automation and what this means for skills development and competency requirements.

The skills gap analysis is simple but powerful, offering rich insights into the workforce and helping decision makers to strategically plan for their future workforce, optimise recruitment and better direct training investments. A good skills gap analysis will also help organisations to right-size their L&D programmes to meet current and future market challenges.

Merilyn Uudmae


Content Marketing Manager

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