How to identify skills gaps in your business
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Posted: Wed 14th Feb 2024
Running a successful business means having a skilled and efficient workforce. But how do you know if your employees have the skills needed to meet your business goals?
Identifying skills gaps in your organisation will make sure you remain productive and on the path towards growth.
The skills that businesses need to stay competitive are constantly evolving. As a result, businesses often find themselves grappling with skills gaps. To continue cultivating a high-performing workforce, you must be able to identify and address these gaps.
In this blog, we look at common skills gaps in more detail, including effective strategies for recognising them and proactive measures you can take to close them.
What is a skills gap?
A skills gap is the difference between the skills that you – as an employer – are looking for in potential candidates, and the skills that jobseekers actually possess.
In other words, it's the divide between the skills that workers have and the skills that are needed for the available job opportunities in the market.
Why do skills gaps occur?
Skills gaps can arise for a number of reasons, including the following:
The rapid speed at which technology is advancing. This often outpaces the rate at which skills are developing in the current workforce. This leads to a situation where many workers lack the skills needed to fill available positions, particularly in industries that ask for highly specialised knowledge or technical expertise.
The changing nature of the job market. As the economy evolves, new industries emerge while others decline, creating a mismatch between the skills workers have and the skills that businesses demand.
Demographic changes and shifts in the population. These can also affect the skills gap, as certain regions may have a surplus of workers with specific skills while other areas face a skills shortage.
Skills gaps are a pressing issue for employers, as you might struggle to find qualified candidates to fill open positions. That can lead to a fall in productivity and stop your business from growing.
Recognising and addressing employee skills gaps is essential for your long-term success. You can invest in training and development programmes to upskill your workforce, while your staff can take proactive steps to improve their skills and stay relevant in the ever-changing job market.
Ultimately, closing any performance gaps is crucial for fostering a productive, engaged and competitive workforce.
What are some examples of skills gaps in business?
As technology and business practices evolve, certain skills become outdated while new ones become essential. This leaves a gap between the skills that employees have and the skills that a modern workforce needs.
Here are some of the biggest skills gaps you'll find in the workplace:
Technical skills
With the rapid advancement of technology, many employees lack the technical skills needed to do their jobs effectively. This includes skills such as coding, data analysis, and proficiency with specific pieces of software, digital tools and apps.
Soft skills
While technical skills are crucial, soft skills are just as important. Employees often lack essential soft skills such as leadership, critical thinking, communication skills, teamwork, interpersonal skills and problem-solving abilities.
Digital skills
As businesses rely more and more on digital tools and platforms, many employees lack the technology skills to keep up. This includes basic computer skills, online communication, and the ability to navigate digital tools and software effectively.
Industry-specific knowledge
In certain industries, employees may lack specific knowledge and expertise that's vital for success. This could include knowledge of industry regulations, market trends, product knowledge, or understanding industry demands, processes and procedures.
Leadership and management
As companies grow and evolve, there's a pressing need for strong leaders who can effectively guide their teams and drive the business forward. However, many companies struggle to find people with the necessary leadership skills, such as strategic thinking, decision-making, and the ability to inspire and motivate others.
Adaptability and resilience
With change happening so quickly in the modern workplace, employees need to be adaptable and resilient. Many struggle to embrace change, learn new skills, and navigate uncertainty in the workplace.
What is a skills gap analysis?
A skills gap analysis is simply a process you follow to identify the current skills gaps in your business. It's really important when you're looking to tackle challenges in recruiting employees, training existing staff or developing your workforce.
Faced with today's market demands, you must be sure that your employees have the skills and knowledge they need to work well in your industry. A skills gap analysis helps you understand where your workforce falls short and what steps you can take to bridge the gap.
Why are they important?
They help you identify where your current workforce is lacking. By understanding where the gaps lie, you can address them through training, development and recruitment. As a result, your business becomes more productive and efficient, as staff are better equipped to meet the demands of their roles.
They let you anticipate what skills you'll need in future, and then prepare. Business is changing so rapidly, you must be proactive at finding and tackling emerging skill gaps. Do this and you'll stay ahead of the curve and maintain a competitive edge in your industry.
They allow you to plan for future recruitment and leadership. By identifying the core skills needed for senior job roles and other key positions, you can make sure you have the right talent in place to drive your long-term success. This also helps you reduce the risk of losing crucial capabilities when skilled employees leave or retire.
How do I identify skills gaps in my business?
Here are some key steps for carrying out a skills gap analysis for your organisation:
Do a skills assessment
One of the best ways to identify skills gaps is to conduct a full skills assessment. This is all about gathering information about individual employees' current abilities and areas for improvement.
Not all jobs require the same set of skills, which is why it's important to break down skills based on individual jobs. That way, you'll better understand what's needed for someone to excel in a specific role.
Example:
A software developer may need strong problem-solving and analytical skills, as well as a deep understanding of programming languages and specialist software.
On the other hand, a marketing manager might need excellent communication and negotiation skills, and a knack for creative thinking.
Communication is key here. Sit down with each employee and discuss their career goals, interests and accomplishments. This will help you work out their actual skill level and where there may be gaps in knowledge.
You should also observe them in their role and run regular performance evaluations. Take note of the tasks they excel at and the ones they may struggle with. You'll learn where their strengths and weaknesses lie.
Also consider conducting employee surveys to gather direct feedback from workers and their colleagues. This can give you a much fuller view of their capabilities and help identify any hidden talents or areas for improvement.
Measure performance
Monitoring performance metrics can give you valuable insight into your business's gaps in skills.
For example, if certain departments consistently underperform in specific areas, it may indicate a lack of skills or knowledge. If you haven't already, set the appropriate key performance indicators (KPIs) and then track them.
Get feedback from your staff
Employees are often your best source of information about their own current skill level. Encouraging workers to openly provide feedback can help you pinpoint where you need to provide access to training sessions or other support.
Assess what's needed for every role
Reviewing job descriptions and thinking about what you expect from each role can help you identify a potential skills gap. You're comparing the essential skills and experience needed for a particular role with the skills employees possess right now.
Stay current with industry trends
It's important to stay up to date with the latest industry trends and developments. By doing so, you're more easily able to identify emerging skills gaps that you may need to fill if your business is to make good progress.
Consult managers and team leaders
Managers, team leaders and other senior team members are on the front lines and can tell you where skills might be lacking among the current employees they supervise. Work with them to identify any areas in which people need extra training or development.
Invest in employee training and development
Once you know where the skills gaps are, it's time to invest in formal training to address them. This could involve anything from technical skills workshops to sessions on leadership.
Giving employees the opportunity to expand their skills not only benefits them personally but also strengthens your business as a whole.
Offer mentorship and coaching
Pairing employees with experienced mentors can help them learn new skills and gain insights from people who have already mastered them. Coaching is a good way for staff to get personalised guidance and support so they can improve in specific areas.
Encourage continuous learning
Continuous learning is crucial for staying relevant. Encourage your employees to take ownership of their own professional development by giving them access to resources such as online courses, workshops and industry events.
Also give employees the opportunity to take on new challenges or projects that will help them fill in any knowledge gaps. Letting them take on "stretch assignments", or collaborate with teams or colleagues they wouldn't normally, can help them gain new skills and experience.
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