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A study shows that 29% of C-Suite leaders are worried about skills gaps in their workplace.
Is this you? Is this your company?
More specifically, this research indicates that talent gaps and shortages are actually the third highest-rated challenge facing these leaders.
In this article, we’ll give you a breakdown of what a skills gap is - and then give you tips and tools to understand how to conduct a skills gap analysis and why this is paramount for businesses in our current talent market.
What is a Skill Gap?
A skill gap refers to the difference between the skills needed for a particular piece of work, offering or service and the talent that an organisation actually has access to. In short, skills gaps within your company can stop full-capacity operations and potentially even lose a competitive edge.
It’s important to understand that when we talk about a skills gap - this can mean within a team, company or even industry-wide. This is also called a talent gap. However, a skills gap can also refer to the knowledge, expertise and experience that an individual has.
A skill gap can occur in the workplace for several reasons - internal and external. External factors could be changes to industry standards, technological advancements, an unexpected boom in the market (or an adjacent industry) or global events like COVID.
Naturally, you can lose skills in house through all the standard ways - retirement, employee departures and even internal restructuring and changing organisational priorities.
Why Addressing Skill Gaps Matters, And Why You Shouldn’t Just Be Waiting For The Unicorn Candidate to Apply To Bridge The Gap
Research shows that businesses facing skill gaps can experience a 43% drop in productivity.
Specifically, this manifests through longer times to find solutions and resolutions to problems, as well as longer project durations. It makes sense right? If you do not have the appropriate expertise to deliver a project or solve a problem, you’re going to be waiting around whilst other members of the team quickly try to upskill themselves to plug the gap and deliver their work. Alternatively, you may have to bring in outside help to solve the issue and get back on track. This all takes more time and could be wasting more money - demonstrating how a skills gap can directly impact your business bottom line - Not to mention the potential reputational damage of not being able to deliver your product or service on time.
A skills gap within a company can also pose a risk to a business at-large and the position they hold in the market. A total loss of a specific, valued skill within an organisation may impact your ability to offer a certain service, fulfil requirements or deliver certain products. Ultimately, you can lose a USP or a competitive edge currently held in the market, even ceding market share over to another player.
You do not need to completely lose a certain skill or talent from within the company, any gap can cause a loss in innovation and of development and direction for a business. This is going to be particularly crucial in industries where constant innovation and invention is critical for survival, for example tech, creative industries, marketing, design.
Another reason it’s imperative to address a skills gap is the negative impact on workplace culture and employees. The same study reveals that the stress experienced by employees as a result of a skills gap is actually the biggest impact for a business (50%).
HumanX are workplace experience and HR experts. Our teams so often see the knock-on effect of excess stress in the workplace - lack of employee engagement, retention issues (creating a bigger skills gaps), negative culture, poor employee relations and lowered productivity.
Not to mention, stress can impact the health and wellbeing of your teams and talent.
Organisations must not be ‘hoping’ to address a skills gap. There must be a strategy in place.
It is imperative you are proactive and communicate to your teams the work you are doing to manage this shortage, get through the period and resolve any issues.
How to Conduct a Skills Gap Analysis
A skills gap analysis is a strategic tool that measures the disparity between the skills your organisation currently possesses and the talent it requires. Skills gap analysis identifies and addresses pivotal areas for improvement, helping a business to remain competitive in an evolving market. Below, we have detailed how to conduct an effective skill gap analysis.
Defining the Critical Skills
At the heart of any skill gap analysis is the understanding of the crucial competencies that propel your company forward. To land on a defined group of critical skills, you may engage with department heads and team leaders, analyse industry trends and outline any skill requirements associated with your company’s current trajectory and goals.
Let’s use the healthcare industry as an example and conduct a skills gap analysis to identify critical requirements.
This industry has dramatically changed over the years with rapid digital transformation and global health crises. Identifying critical skills in healthcare is paramount to both providing state-of-the-art patient care and staying ahead in a competitive landscape. As an example, to identify the skills gaps will require an audit of patient appointments by subject so you can understand the most demanding requirements.
Furthermore, you’ll like to go directly to the healthcare professionals, administrators and leaders to understand the work they do and what takes up most of their time. This way you can begin to think about how to free up multi-skilled or highly trained, agile individuals by relieving them of admin (or other areas that might be easier to recruit for). IIf staff appraisals and competency bands are in place, you will be able to assess where teams need specific support or additional training.
Evaluate Your Team's Current Abilities
Once you have defined the critical skills needed for your business’ success, it is imperative to have a clear understanding of where your team’s current abilities lie. By using assessment tools that provide a quantitative measure of skills, conducting feedback sessions that offer qualitative insights and employing well-crafted surveys to shed further light onto specific problem areas, you can obtain invaluable insights about the current abilities of your team.
Opting for an outsourced HR team is a wise move for this step, allowing employees to feel comfortable and honestly assess where they are at, resulting in more effective data.
With that data, our teams are able to then help organisations align skills gaps with necessary training programs and even coaching frameworks.
Remember that the skills that need to be elevated aren’t necessarily hard-skills; developing soft skills, such as leadership, critical thinking and agility, can make teams more dynamic and give individuals broader opportunities. Improving these skills in the workplace can also directly resolve issues with innovation, employee buy-in and attitude towards progression and a teams’ ability to problem solve and deliver a project.
Implement Strategies to Bridge the Gap
After identifying a skill gap, action is of utmost importance. Tailoring your approach to focus on the gaps identified, your business may employ methods such as targeted training programs created by specialists in the area, facilitating workshops or conference attendance, or covering the costs of formal education courses. Mentorship programs can also be established in-house, where an experienced professional is paired with a newer team member, providing on-the-job training.
When the disparities are significant, or a company is looking at scaling, it might make sense to attract external talent. Hiring new talent to address the immediate skill gap can ensure the broader talent gap is properly managed. This may include short-term hires such as freelancers or contractors to temporarily fill the skill gap for specific projects or tasks.
However, it’s important to be smart with your decisions here and understand the wider landscape. If your company is experiencing a talent gap - is the wider market? Is the skill you need to plug in high demand? How much is this recruitment process going to cost? Are you confident with the process to find, onboard & retain the new talent?
HumanX HR are able to support you through this process, developing an intelligent HR strategy that gives you the confidence to answer these questions and make the right decisions for your workplace.
Develop Continual Monitoring and Analysis
While bridging the current skill gap is beneficial, leading organisations worldwide understand that in a rapidly changing business landscape, periodic re-evaluation is essential for success. To ensure the continual success of your organisation, adapting programs for ongoing learning and assessment is key. By preemptively identifying and addressing potential gaps, your business can continue to grow as a forward-thinking and dynamic organisation.
Get in Touch
If you are looking to partner with a professional and experienced HR firm with expertise in identifying and managing skill gaps and broader talent gaps, HumanX is your trusted ally. Contact our friendly team, and let’s discuss forward-thinking solutions to your company's challenges.