Term: Skills Gap Analysis

What Is Skills Gap Analysis?

Skills gap analysis is the process of identifying the difference between the skills employees currently have and the skills they need to perform their roles effectively or meet future business requirements.

It helps organizations understand where capability gaps exist so they can make informed decisions about employee development, training, hiring, and workforce planning.

Why Is Skills Gap Analysis Important?

Skills gap analysis can help organizations:

• Identify critical skill shortages
• Understand employee development needs
• Prepare employees for changing job requirements
• Improve training and development decisions
• Support internal mobility and career growth
• Reduce reliance on external hiring
• Prepare the workforce for future business needs

How Does Skills Gap Analysis Work?

A typical skills gap analysis involves:

1. Identify Required Skills – Determine the skills needed for a specific role, team, or future business objective.
2. Assess Current Skills – Understand the skills and capabilities employees currently possess.
3. Identify the Gaps – Compare current capabilities with the required level.
4. Prioritize Development Needs – Determine which gaps have the greatest impact on business goals.
5. Create Development Actions – Define training, coaching, experience, or other actions to close the gaps.
6. Track Progress – Review development progress and reassess capabilities over time.

Skills Gap Analysis vs. Talent Gap Analysis

Skills gap analysis focuses specifically on the difference between the skills an organization needs and the skills its employees currently possess.

Talent gap analysis is broader. It can consider not only skills, but also people, capabilities, behaviors, leadership readiness, and talent availability needed to achieve business objectives.

In simple terms, skills gap analysis asks, “What skills are missing?” while talent gap analysis asks, “What talent and capabilities are missing?”

Skills Gap Analysis and Employee Development

Skills gap analysis can provide a foundation for employee development plans by identifying the specific capabilities an employee needs to strengthen.

Development actions can then be aligned with the employee’s role, career goals, behavioral characteristics, and the organization’s strategic priorities.

Skills Gap Analysis for SMBs

For small and midsize businesses, identifying skills gaps early can help leaders make better decisions about whether to develop existing employees, hire new talent, or redistribute responsibilities.

Connecting skills gap analysis with talent planning and employee development can help SMBs build the capabilities they need for future growth.

MyTalentPlanner helps leaders connect talent planning, employee development, behavioral insights, and business strategy to identify and address capability gaps.