Nov 29, 2022
10 min read

What is Skill Gap Analysis and How to Conduct It

In this article:

Did you know that skills gap analysis can serve as a game-changer for Human Resources, showing organizations what skills to focus on to get a competitive advantage?

How so? 

Well, according to IBM, the talent shortage is one of the organizations' key threats. If you don't have talent at your disposal, namely people with the required skills and different skill levels, there is a high chance you won't succeed in the market. In such a case, a skill gap analysis helps to deal with a talent shortage.

In this article, we’ll take a closer look at skill gaps analysis, explore its benefits, and see how to conduct one in four simple steps. This will help you understand the concept and show you how to use it to your advantage. 

What is a critical skill gap analysis?

In a nutshell, a skills gap analysis is an evaluation technique HR professionals use to assess whether employees have the skills required for the company to succeed. For instance, skills gap analysis focuses on:

  • critical skills
  • communication skills
  • soft skills
  • negotiation skills

With this type of analysis, companies can assess current skills, identify those that are lacking, and anticipate future candidate assessments needs. This is vital for a company's growth and for meeting business goals. Now, let’s take a look at some distinct benefits skill gaps analysis offers.


What is a skill matrix format?

What Is LinkedIn Skill Assessment and How Does It Work?

How do you evaluate interpersonal skills?

Main benefits of conducting a critical skill gap analysis

Benefits of conducting a skill gap analysis

Image source: Freepik

We can outline four key benefits of conducting a skill gap analysis. They are linked to digital transformation, workforce comprehension, skill gap identification, and employee development. Let's explore these advantages in more detail. 

Ensuring smooth digital transformation

A business can boost productivity and make its processes more efficient with the help of new digital tools. Skills gap analysis helps reveal skills needed to promote digital transformation. Do employees need help adopting specific technologies? Do they struggle with a tool or an individual feature? Which skill do they need to overcome these challenges?

Better workforce comprehension

With skills gap analysis, you get a good idea of what your workforce is capable of and which skills employees lack. At an individual level, the method shows who is the top performer and who lags. On a collective level, the technique improves the understanding of workforce competencies. It all leads to better reskilling and upskilling programs devised by HR teams.

Looking for skills gaps needs

With skills gaps identified, HR professionals can also determine the existing skill-based trends in your workforce. For instance, you might have recently introduced a new work schedule. A skills gap analysis can show if employees struggle organizing their time and workload well and if there is a specific skill that could help them. 

Training and development capabilities

With the results of skills gap analyses, you can promote any training program to improve specific areas. This can include critical, soft or any right skills your current employees need. 

Step-by-step guide for conducting a skill gap analysis

step-by-step guide for conducting a skill gap analysis

Image source: Freepik

Now that we know the ins and outs of skills gap analysis and the benefits it brings, let's find out how to conduct it. To do that, you need to undergo four steps:

  1. Determine available skills
  2. Identify required future skills
  3. Establish a skills gap hierarchy
  4. Devise and implement a needed solution

Step 1: Determine available skills

The first step is to assess the current situation within a workforce. You should design a skills mapping exercise to get a full picture. Also, make sure to check all previous employee performance reviews, one-on-ones, and knowledge tests to get a comprehensive view of skill availability.

Step 2: Identify required future skills

The second step in skills gap analysis is to determine whether your workforce’s skills are enough to meet future needs and business objectives. For example, maybe you plan to expand your business or enter a new market. Knowing these future objectives directly impacts the skills needed to navigate them.

Step 3: Establish a skill gap hierarchy

At this moment, you have identified business goals, a list of available skills and those that are still needed. The next step in skill gap analysis is to prioritize them based on the importance. This way, you can focus on the most critical skills and ensure that skill gaps are narrowed down or closed.

Step 4: Devise and implement a needed solution

Once you have all the data in front of you, you can decide which course of action to take. Perhaps you’ll need to improve the training process or come up with a peer-to-peer skill support system. Whatever the solution - you need to base it on specific information that you get from a skills gap analysis.


A skill gap analysis brings many benefits. However, you need to understand that the method is not a panacea. Conducting a skill gap analysis can be challenging. Follow the steps we presented above. Yet, if you still find the technique challenging to implement, you can ask Effy to help. You can try our services for free right now.

FAQ: Critical skills gap analysis in 2023

What is meant by skill gap analysis?

A skills gap analysis is a method organizations use to evaluate the existing gap between skills needed and skills employees have or acquired. A successful skills gap analysis is a vital strategic workforce planning tool.

Why is a skills gap analysis useful?

An effective skills gap analysis can bring many benefits. Determining skills gaps with a correct skills gap analysis template helps an organization see who lacks certain skills and who does not have any gaps. To conduct a skills gap analysis means finding skills needed and teaching these desired skills to employees. These results in better productivity and effective workforce management. 

How do you identify a skill gap?

There are several ways to identify a skill gap. Here are the steps to follow:

1. Start with the business plan and your company's agenda.

2. Determine the responsibilities that must be played to achieve these objectives.

3. Make a list of the skills required for each job.

4. Make a list of the abilities your staff already possess.

5. Perform a gap analysis of your skills.

6. Close the knowledge gap.

What’s Effy software?
Performance review
Easily launch review cycles in your way, track progress.
360 degree feedback
Collect feedback from peers and managers. Identify strength and improvements areas.
Choose templates that are right for you. Start review process in 15 min.
Collaborate effectively with team meeting agenda, action items and meeting notes
Personal development plan
Develop your people by providing them an explicit plan to the next level. Track goals progression.
AI generated insights & Analytics
AI will generate an extended summary for every employee, including top strength, areas to improve and action plan.
Apr 16, 2024
5 min read
15 Work-related Strengths Examples + Tips for Improving Them
Read More
March 26, 2024
4 min read
Employee Evaluation Form: What to Include + Template
Read More
Feb 15, 2024
6 min red
5 Best Staff Appraisal Software for Better Evaluations
Read More
Set up your first
Performance Review with Effy
Use effy for free
Use this template for free