As markets fast evolve, many companies face a mismatch between the skills their employees currently have and the capabilities their business needs to meet strategic goals. Without the right skills and expertise, enterprises cannot fully leverage innovations, meet changing customer demands, or pursue emerging opportunities.
Furthermore, many organizations do not have clear visibility to what skills exist across their workforce, making identifying skills gaps, let alone solving them, incredibly challenging.
By shifting to a skills-based approach, leading organizations are more quickly identifying skills gaps, creating tailored reskilling and upskilling journeys, and mobilizing talent to fill critical needs.
In this article, we’ll learn how to identify skills gaps in the workplace and how other companies do it.
Note: Ready to transform into a skills-based organization? Fuel50’s talent marketplace can help you map your skills landscape, develop targeted learning paths, and create a more agile, future-ready workforce. Request a demo today.
Why the shift to skills-based?
World of work experts have long touted the need for organizations to be more agile to better respond to global and economic changes. By looking at job titles and roles alone, organizations do not get a complete picture of the skills, knowledge, experience, and capabilities that already exist across their workforce. Without identifying skills gaps, it is difficult to see where they can upskill and mobilize talent to fill skills and knowledge gaps.
Here are more benefits of this shift:
Enhanced visibility of workforce capabilities
By looking at job titles and roles alone, organizations do not get a complete picture of the skills, knowledge, experience, and capabilities that already exist across their workforce. A skills-based approach provides a more comprehensive view of an organization’s talent landscape.
Why it’s important: This visibility enables more effective talent utilization and helps identify hidden talents that might be overlooked in traditional job-based models.
As Yvette Vargas, Head of Development at Citizens Bank, explains, “Skills are the new currency. We’re dealing with people and human behavior, not just knowledge. We’re in the business of helping manifest people’s knowledge and skills into activities: initiatives that will help our customers, colleagues and communities actually transform their lives.”
Addressing skills gaps and labor shortages
Without identifying skills gaps, it is difficult to see where organizations can upskill and mobilize talent to fill skills and knowledge gaps. A survey of CEOs by Deloitte found labor and skills shortages were the second most cited external factor disrupting their business strategy.
By mapping skills across the organization, companies can pinpoint areas of shortage and develop targeted strategies to fill these gaps through upskilling, reskilling, or strategic hiring.
Example: Once skills and capabilities are mapped across the organization, identifying skills gaps, both current and future, and then solving them becomes far easier. This allows companies to be proactive in addressing potential shortages before they impact business operations.
Increased organizational agility
As noted in “Transforming into a Skills-Based Organization”: “Shifting from a traditional job-based talent strategy to a skills-based strategy enables these organizations to respond to change quickly and more effectively, giving them a competitive advantage in today’s unpredictable environment.”
Agility allows companies to pivot quickly in response to market shifts, technological advancements, or unexpected disruptions.
Example: During the COVID-19 pandemic, many organizations were able to quickly redeploy employees to new roles based on their skills, rather than being constrained by rigid job descriptions.
Aligning learning and development with organizational needs
Jeremy Manjorin, Chief Learning Officer at the Federal Reserve Bank of New York, shares that a skills-based approach helped his team cultivate a heightened awareness of the organization’s learning needs and opportunities, in addition to its existing training and development resources.
This alignment ensures that training resources are used efficiently and that employees develop skills that directly contribute to organizational goals.
Manjorin explains that by having individual skills and competencies identified for each role, the team was able to connect them to workshops, online learning programs, training programs provided through content partners such as LinkedIn Learning, and microlearning assets.
Additional benefits of skills-based strategies
Research by Fuel50 highlights some further benefits of skills-based strategies, including:
- Broader talent pools: By focusing on skills rather than specific job histories or qualifications, organizations can tap into a wider range of potential candidates.
- Reduced bias in hiring: Skills-based hiring can help reduce unconscious biases by focusing on capabilities rather than background or demographics.
- Increased organizational agility: With a clear understanding of the skills available within the organization, companies can more quickly adapt to new challenges or opportunities.
What are the different types of skills gaps?
According to Valamis5 who has much expereince identifying skills gaps, says they can generally be categorized as three defined types:
Knowledge gaps
Knowledge gaps represent a lack of information or understanding related to specific job functions or the broader organizational context. These gaps can significantly impact an employee’s ability to perform tasks effectively and contribute to the company’s overall goals.
Why it’s important: Knowledge gaps can lead to inefficiencies, errors, and missed opportunities. They can also hinder collaboration and innovation within teams.
Examples:
- A new marketing manager lacking understanding of the company’s target audience and market positioning
- An IT professional unfamiliar with the organization’s specific software systems and protocols
- A sales representative unaware of the full range of products or services offered by the company
Addressing knowledge gaps often involves targeted training programs, mentoring initiatives, and improved onboarding processes. By closing these gaps, your organization can enhance employee performance, foster better cross-functional collaboration, and ensure that institutional knowledge is preserved and shared effectively.
Skills gaps
Skills gaps occur when employees lack the practical abilities needed to apply knowledge effectively in their roles. Unlike knowledge, which can be acquired through study, skills are developed through practice and experience.
Why it’s important: Skills gaps directly impact an employee’s ability to perform their job effectively. They can lead to reduced productivity, lower quality output, and increased stress for both the employee and their colleagues.
Examples:
- A data analyst with strong theoretical knowledge but lacking practical experience in using specific data visualization tools
- A project manager with excellent technical skills but struggling with soft skills like conflict resolution and team leadership
- A customer service representative who understands company policies but struggles with empathy and effective communication in challenging customer interactions
Addressing skills gaps often requires a combination of hands-on training, coaching, and opportunities for practical application. This might involve implementing job rotation programs, creating cross-functional project teams, or providing access to simulation-based learning experiences.
Performance gaps
Performance gaps arise when employees possess the necessary knowledge and skills but fail to meet expected performance levels. These gaps are often related to motivational issues, misalignment with organizational culture, or ineffective management practices.
Why it’s important: Performance gaps can lead to decreased productivity, low morale, and increased turnover. They can also create disparities within teams and negatively impact overall organizational performance.
Examples:
- A highly skilled software developer consistently missing project deadlines due to poor time management
- A sales team with extensive product knowledge but failing to meet targets due to low motivation or engagement
- A department experiencing a decline in output following a change in leadership or company direction
Addressing performance gaps often requires a multifaceted approach. This may include improving management practices, reassessing job roles and responsibilities, enhancing employee engagement initiatives, and aligning individual goals with organizational objectives.
Note: Ready to transform into a skills-based organization? Fuel50’s talent marketplace can help you map your skills landscape, develop targeted learning paths, and create a more agile, future-ready workforce. Request a demo today.
How to identify skills gap within your organization?
Identifying skill gaps is a critical process for organizations aiming to maintain competitiveness and adapt to changing industry demands. A comprehensive skills gap analysis helps businesses understand the discrepancy between their current workforce capabilities and the skills needed to achieve their business objectives. This process involves several key steps:
Define your business strategy and objectives
The foundation of any effective skills gap analysis lies in a clear understanding of your organization’s strategic goals. This step goes beyond simply listing objectives; it requires a deep dive into the future direction of your company and industry.
For instance, consider the approach taken by Johnson & Johnson, the world’s largest healthcare company. As Christina Norris-Watts, Ph.D., Head of Assessment and People Practice at J&J, explains:
“You have to start with defining the skills and defining that construct underneath the skill, meaning what is the definition of the skill, what are the proficiency levels of those skills. And, if you’re going to use them for decision-making, you’re also going to need to validate them to link them to jobs.”
This level of granularity in defining skills and their relevance to specific roles ensures that the subsequent gap analysis is firmly grounded in the company’s strategic needs. It’s not just about identifying broad skill categories, but understanding the nuanced competencies that drive success in each role.
Identify required skills and create a skills inventory
Once the strategic direction is clear, the next step is to determine the specific skills needed to achieve these goals and create a comprehensive skills inventory. This process should be forward-looking, considering not just current needs but anticipated future requirements.
The World Economic Forum’s Future of Jobs Report can be an invaluable resource here, offering insights into emerging skills and roles across industries. However, it’s crucial to interpret these global trends in the context of your specific organization and industry.
Creating a skills inventory involves more than just listing skills. It requires defining each skill, establishing proficiency levels, and understanding how these skills contribute to various roles within the organization. This detailed inventory becomes the benchmark against which current skills are measured.
Assess current skills and perform the gap analysis
With a clear understanding of required skills, the next step is to assess the current skill levels within your organization. This assessment can involve a combination of methods, including self-assessments, manager evaluations, skills tests, and analysis of performance data.
Technology plays a crucial role in this step. Advanced analytics and AI-powered tools can provide deep insights into the current skills landscape of an organization. These tools can analyze vast amounts of data to identify skill patterns, proficiency levels, and even predict future skill needs based on current trends.
The gap analysis then becomes a matter of comparing this detailed current state with the required skills identified earlier. This analysis should go beyond simply identifying missing skills. It should also consider proficiency levels, the distribution of skills across the organization, and how well the current skill set aligns with future strategic needs.
For example, a gap analysis might reveal that while a company has sufficient technical skills in its IT department, there’s a shortage of project management and leadership skills needed to drive digital transformation initiatives. Or it might show that while entry-level employees have up-to-date technical skills, mid-level managers lack the digital literacy to effectively lead these teams.
Leveraging technology for deeper insights
The use of advanced technology in skills gap analysis has revolutionized the process, allowing for more nuanced and actionable insights. Zachary McCleary, Senior Learning Program Owner at KeyBank, highlights the value of such tools:
“The Insights function has added an immense layer of value by allowing our organization to have a better view into the skills our employees possess. Being able to understand our skills landscape and get granular data into departments and even singular employees allows us to better prepare for talent needs and skill gaps.”
These platforms can not only identify current skill gaps but also predict future skill needs based on industry trends and the organization’s strategic direction. They can provide visualizations of skill distributions across departments, highlight unexpected skill clusters, and even suggest potential internal candidates for roles based on their skill profiles.
For instance, such a platform might reveal that a marketing department has unexpectedly high levels of data analysis skills, suggesting an opportunity to leverage these skills for more data-driven marketing strategies. Or it could identify employees in declining roles who have adjacent skills that could be developed to fill emerging skill gaps in other areas of the organization.
Developing action plans to bridge skill gaps
Once skill gaps are identified, the next crucial step is developing comprehensive action plans to address these gaps. This is where the rubber meets the road – where insights are transformed into concrete strategies for workforce development.
These action plans should be multifaceted, addressing skill gaps through various approaches:
- Training and development programs: Design targeted learning interventions that address specific skill gaps. These could range from formal training sessions and workshops to online courses and microlearning modules.
- Internal mobility and job rotation: Leverage the skills already present in your organization by facilitating internal moves. This not only fills skill gaps but also provides growth opportunities for employees.
- Mentoring and coaching: Pair less experienced employees with seasoned professionals to facilitate knowledge transfer and skill development.
- Recruitment strategies: For skills that can’t be developed internally in the required timeframe, develop targeted recruitment strategies to attract talent with the necessary skills.
- Partnerships and outsourcing: For highly specialized or rapidly evolving skills, consider partnerships with educational institutions or outsourcing to specialized firms.
The key is to tailor these strategies to the specific needs of your organization and the nature of the identified skill gaps. For example, soft skills like leadership or emotional intelligence might be best developed through mentoring and experiential learning, while technical skills might require more formal training programs.
Continuous monitoring and adjustment
It’s important to remember that skill gap analysis is not a one-time event, but an ongoing process. The skills landscape is constantly evolving, driven by technological advancements, market changes, and shifts in business strategy.
Implementing a system for continuous monitoring of skills and regular reassessment of skill gaps is crucial. This might involve:
- Regular pulse surveys to gauge employee skill levels and learning needs
- Ongoing analysis of performance data to identify emerging skill gaps
- Periodic reassessment of the skills inventory against evolving business needs
By making skill gap analysis an ongoing part of your talent management strategy, you can ensure that your workforce remains agile and adaptable, ready to meet both current and future challenges.
Note: Ready to transform into a skills-based organization? Fuel50’s talent marketplace can help you map your skills landscape, develop targeted learning paths, and create a more agile, future-ready workforce. Request a demo today.
How Fuel50 can help your organization identify skills gaps and address them
Fuel50’s expert-driven talent marketplace platform offers a comprehensive solution for organizations looking to identify and address skill gaps effectively.
Here’s how Fuel50 facilitates the skill gap identification process and helps organizations build a future-ready workforce:
Create a dynamic skills inventory with expert-driven skills architecture
Fuel50’s skills architecture solution goes beyond traditional static skill lists. It provides a living, breathing ecosystem of skills that evolves with your organization and the broader market trends.
The platform’s expert-powered skills ontology, curated by a team of I/O psychologists and data scientists, ensures that your skills inventory is always up-to-date and relevant.
This dynamic approach allows organizations to:
- Map skills across the entire workforce with unprecedented accuracy
- Identify emerging skills and their relationships to existing competencies
- Align skills with roles, projects, and strategic objectives in real-time
- Eliminate bias in skill identification and assessment
It’s like having a living, breathing skills database that grows with our organization.”
Gain deep insights into your current skills landscape
Fuel50’s Insights module provides a panoramic view of your organization’s skills landscape. It transforms raw data into actionable intelligence, allowing HR leaders and managers to make informed decisions about skill development, succession planning, and workforce strategy.
With Fuel50 Insights, you can:
- Visualize skill distributions across departments and roles
- Identify skill clusters and unexpected areas of expertise
- Track skill trends over time to predict future needs
- Measure the impact of learning and development initiatives on skill gaps in the workplace
Empower employees with personalized career development
Fuel50’s talent marketplace doesn’t just serve organizational needs; it puts employees in the driver’s seat of their career development. The platform creates a unique “career DNA” for each employee, ensuring that every interaction and opportunity is tailored to their skills, aspirations, and potential.
This employee-centric approach helps:
- Increase engagement by showing clear growth opportunities
- Encourage proactive skill development aligned with organizational needs
- Facilitate internal mobility based on skills and career goals
- Foster a culture of continuous learning and development
This will make your people more engaged and proactive about their career growth.
Facilitate targeted learning and development
Fuel50’s algorithms don’t just identify skill gaps; they provide personalized recommendations for closing those gaps. The platform’s learning and development features seamlessly integrate with your existing L&D resources, creating a holistic ecosystem for skill development.
Organizations using Fuel50 can:
- Deliver tailored learning recommendations based on individual skill gaps
- Track the effectiveness of learning initiatives in real-time
- Align learning opportunities with strategic skill needs
- Encourage peer-to-peer learning through mentoring and knowledge sharing
With Fuel50, you can transform your L&D strategy. You can now deliver highly targeted learning experiences that directly address your skill gaps.
Enable data-driven workforce planning
Fuel50’s advanced analytics capabilities provide HR leaders with the insights they need to make strategic workforce planning decisions. By combining skills data with other workforce metrics, Fuel50 enables organizations to take a proactive approach to talent management.
With Fuel50, you can:
- Predict future skill needs based on market trends and organizational strategy
- Identify internal talent for reskilling or upskilling initiatives
- Make informed decisions about hiring, development, and succession planning
- Measure the ROI of your skill development initiatives
Fuel50 will give you a level of workforce planning capability you never thought possible, and will help you anticipate skill needs months, even years in advance.
Foster a culture of internal mobility and career growth
By providing visibility into internal opportunities and clear pathways for skill development, Fuel50 creates an environment where internal mobility thrives. This not only helps address skill gaps but also improves employee retention and engagement.
Fuel50’s approach to internal mobility:
- Matches employees to opportunities based on skills and career aspirations
- Facilitates cross-functional moves to spread skills across the organization
- Reduces the need for external hiring by leveraging internal talent
- Improves employee satisfaction by providing clear growth paths
Note: Ready to transform into a skills-based organization? Fuel50’s talent marketplace can help you map your skills landscape, develop targeted learning paths, and create a more agile, future-ready workforce. Request a demo today.
The bottom line: what should you do now?
The evolving nature of business and the workforce means it is not enough to solve just today’s skills gaps as a one-off. Over time, and as the world of work continues to evolve, your organization will identify new skills and training gaps that need addressing.
Shifting to a skills-centric approach and focusing on skills instead of job titles as you prepare and solve for skills gaps will enable you to tap into talent and skills more effectively wherever they reside, now and in the future, and will be essential to remaining successful.
Investing in tools that support identifying skills gaps and shortages can mean the difference between your organization’s success and failure in the future of work.
Tom Andriola, Vice Chancellor for Information Technology and Data and Chief Digital Officer at University of California, Irvine, surmises, “The concept of a skills gap is always going to be there. The question is, what is your organizational strategy to be able to continue to close those gaps when the target is constantly moving on you? And this is where a platform like Fuel50 becomes very, very powerful.”
Note: Ready to transform into a skills-based organization? Fuel50’s talent marketplace can help you map your skills landscape, develop targeted learning paths, and create a more agile, future-ready workforce. Request a demo today.
1. Summer 2023 Fortune/Deloitte CEO Survey Insights – Calm in the Face of Disruption, Deloitte. https://www2.deloitte.com/us/en/pages/chief-executive-officer/articles/ceo-survey.htmlAccessed Unknown.
2. Transforming into a Skills-Based Organization: Everything You Need to Know, Fuel50. https://fuel50.com/learn/transforming-to-a-skills-based-organization/. Accessed Unknown.
3. Banking on Holistic Development, Ryann K. Ellis, Association for Talent Development, https://www.td.org/talent-development-leader/banking-on-holistic-development. Accessed 19 April 2023.
4. Capability Trends Report: Deconstruction of Jobs Edition, Fuel50. https://fuel50.com/resources/capability-trends-report-2021-q4/. Accessed Unknown.
5. What is Skills Gap and How to Conduct Skills Gap Analysis, Valamis. https://www.valamis.com/hub/skills-gap. Accessed 8 Sept 2023.
6. Episode 147: How Johnson & Johnson are Scaling Their Skills-Based Approach to Talent – Interview with Christina Norris-Watts & Doug Shagam, David Green, My Future HR. https://www.myhrfuture.com/digital-hr-leaders-podcast/how-johnson-johnson-are-scaling-their-skills-based-approach-to-talent. Accessed 11 April 2023.
7. How to identify skill gaps in the workplace, Indeed Editorial Team, Indeed. https://uk.indeed.com/career-advice/career-development/how-to-identify-skill-gaps. Accessed 17 August 2023.
