Talent gap analysis: a complete guide
Learn how to bridge knowledge gaps before they impact business priorities
By now, most leaders and managers are familiar with talent gaps—because they’ve experienced them firsthand. They happen when employees don’t have the level of skills needed to complete a project or task to their employer’s expectations.
As the pace of digital innovation accelerates and the demand for highly skilled talent builds, gaps are becoming more common. 87% of companies are aware that they either already have a skills gap or that they will have one soon. In an effort to equip employees with the expertise they need, 64% of L&D professionals view reskilling the current workforce as a top priority.
Fortunately, talent gaps don’t need to be part of leaders’ daily realities. Businesses that can identify these skills shortages before they snowball into full-fledged gaps can proactively bridge them, ensuring they have the capabilities needed to thrive in the new world of work. That’s why talent gap analysis will be crucial for organizations that don’t want to fall victim to today’s ongoing skills shortage.
What are talent gaps?
A talent gap occurs when an organization’s current workforce doesn’t have the skills needed to meet the company’s goal. As technological innovations become more frequent and more profound, employees must learn new skills to keep pace. If they don’t, there’s a risk that talent gaps will start to widen, hindering your workforce’s ability to meet enterprise-wide goals.
Leaders can also think of talent gaps as the difference between the skills that are required for a particular job and the set of skills that an employee actually possesses. Talent gaps make it difficult for employees to complete tasks or projects efficiently and accurately.
Why do talent gaps occur?
Improvements in digital technologies are reinventing the way companies do business. Instead of evaluating organizational strategy annually, it must now be constantly recalibrated to account for rapidly changing priorities and new innovations.
The acceleration of technological innovation and faster shifts in ways of working leave companies vulnerable to competency gaps, especially if there aren’t ample opportunities for upskilling and reskilling. Across all industries, businesses are grappling with shortages in crucial competencies; 64% of HR managers acknowledge that they don’t think their employees will be able to keep pace with future skills needs.
What is talent gap analysis?
A talent gap analysis is a tool used to identify current and projected training and hiring requirements within an organization. It helps determine the gap between the present skills and competencies of a workforce or employee and the preferred skills and competencies.
A talent gap analysis helps HR leaders fill in the gaps in their organizational talent landscape, ensuring they’re developing a workforce that is competent, committed, and creative. Conducting a talent gap analysis can help leaders pinpoint what knowledge needs to be prioritized, such as additional technical training to overcome IT skills gaps.
Once HR is aware of any gaps in training and development, they can start creating strategies to bridge emerging skills shortages. Depending on the circumstances, HR leaders can decide whether it makes sense to hire externally for new skills (buy), or if it’s best to either upskill or reskill employees (build) or reallocate talent (borrow) to meet new priorities. This choice is also referred to as making a decision about when to build, buy, or borrow talent.
Why is a talent gap analysis beneficial?
A talent gap analysis is beneficial because it helps companies ensure their workforce is well-trained, knowledgeable, and equipped to perform the job assigned to them. Once knowledge gaps are identified through a talent gap analysis, HR teams can help employees cultivate the skills they’ll need to bridge them. Consequently, a talent gap analysis can help guide employees towards specific types of upskilling, reskilling, and cross-skilling that will be particularly beneficial for their organization and for their role.
It can also streamline the recruitment process by giving talent acquisition teams clarity about which skills and competencies they should prioritize when evaluating external candidates. Talent gap analysis is one of the most accurate and effective ways to identify knowledge that’s missing within the organization. Once leaders have this information, they can harness tools like workforce intelligence to make informed decisions about when they want to build, buy, and borrow talent.
5 steps leaders can take to identify and bridge talent gaps
While skills needs and business priorities will continue to shift, there are a few steps leaders can take to ensure they’re bridging talent gaps before they turn into bigger problems.
#1. Create your single source of truth for skills
Before HR leaders can begin bridging talent gaps, they need full visibility into all of the skills within their organization. Traditionally, this bird’s-eye view of workforce capabilities has been hard to come by because skills information is typically siloed into a few different HR systems. Most taxonomies are also out of date, leading to talent strategies that may not address the actual needs of the organization.
Rather than settling for this subpar understanding of skills, companies are harnessing workforce intelligence to gain full visibility into all of their people’s capabilities. These systems are updated in real-time and pull from an employee’s LinkedIn profile or CV so managers don’t have to worry about overlooking in-demand talent.
#2. Identify current and potential knowledge gaps
Once leaders have a clear picture of the skills within their workforce, they can begin to identify where their organizational knowledge may be falling short of industry standards. Instead of guessing which skills will become more important in the new world of work, workforce intelligence equips leaders with the insights they’re looking for. Tools like Gloat’s Skills Landscape harness data from proprietary sources, such as market information and customer aggregates, to shed light on the competencies that leaders should require for various roles.
#3. Develop strong talent pools
To prevent talent gaps from growing, talent acquisition teams should ensure they’re creating talent pools of both internal and external candidates who possess the in-demand skills that leaders are looking for. To fill critical roles faster, some companies are harnessing talent marketplaces to identify and compare qualified talent from inside and outside of their organization.
#4. Empower employees to expand their skills
Beyond acquiring skills through external hiring, employees should be encouraged to develop their knowledge so they can move into new roles within their organization. To prevent gaps in training and development from holding employees back, HR leaders should ensure their workforce has access to experiential learning opportunities that will enable them to build on-the-job expertise. By generating suggestions for projects, gigs, and mentorships based on the skills employees wish to learn, talent marketplaces increase access to career development opportunities.
#5. Learn when to build, buy, and borrow talent
As budgets tighten and knowledge gaps widen, HR leaders will need to make strategic workforce planning decisions about when to build, borrow, and buy talent. To guide this decision-making process, companies are harnessing workforce agility platforms to compare profiles for external applicants side-by-side with internal talent. In turn, leaders can feel confident that they’re promoting a fair and equitable selection process and ensure they’re not hiring externally when there’s a qualified candidate within their organization.
To learn more about what it takes to ensure your company has the skills needed to thrive in the new world of work, check out our ultimate guide to the skills-based organization.