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In today’s rapidly evolving job market, understanding skill gaps is crucial for both employers and employees.
This is the gap between the skills needed for a person or company to perform, and the skills they currently have.
And these gaps are the enemy of productivity, business growth and people’s development.
That’s why identifying and addressing skill gaps is important! It enables businesses to remain competitive and employee skills to stay relevant.
But how do they open up? How can we spot them? And, most importantly, how can we address them…
Skills gaps open up when there’s a disconnect between the skills we need and the skills we have.
And they’re caused for a number of reasons. Changes to the business strategy, the loss of members from our team, shifts in the skills needed for roles, and the list goes on.
We might launch a new product that requires a completely different set of talents.
New tools and approaches might become vital to our roles, leading us to develop new skills - you get the point.
The shifts happen harder and faster than ever before, so it’s our goal to keep our finger on the skills pulse.
We need to understand the skills we need and have, to ensure we recognise when skills gaps emerge. That allows us to tackle them before they cause inefficiencies, mistakes and declines in productivity.
Understanding and identifying skill gaps is critical for any organisation aiming to stay competitive.
Skills assessments can help in identifying the specific skills that employees lack. When companies are aware of the specific skills their workforce lacks, they are better positioned to implement targeted learning that closes them.
This proactive approach can lead to improved productivity, as employees are equipped with the tools they need to perform their jobs efficiently.
On top of that, recognising skill gaps helps in both strategic planning and resource allocation, ensuring that the organisation is not caught off guard by industry changes.
For employees, knowing which skills are in demand allows them to focus their professional development efforts effectively, and this can result in higher job satisfaction as individuals feel more competent and valued in their roles.
Ultimately, addressing skill gaps is a win-win situation, fostering a culture of continuous improvement and adaptability within the organisation.
Technological advancements are a major cause of skill gaps in the workplace. As new technologies emerge, they often outpace the ability of the workforce to adapt and learn the necessary skills.
For example, the rise of artificial intelligence, machine learning, and data analytics requires specialised knowledge that many employees may not possess.
This rapid evolution means that skills that were relevant a few years ago can quickly become obsolete.
Without ongoing training and development, it becomes challenging for workers to keep up with these changes.
The result is a growing gap between the skills needed to leverage new technologies effectively and the current capabilities of the workforce.
Changes in industry standards can significantly contribute to skill gaps within the workforce.
As industries evolve, they often adopt new regulations, best practices, and methodologies.
Often, these changes are caused by advancements in technology, shifts in market demands, and updates in regulatory requirements.
For example, the finance sector has undergone transformation with the introduction of new compliance regulations and financial technologies, including a notable shift to online banking.
When industry standards shift, employees may find themselves lacking the necessary skills or knowledge to meet these new expectations. This can lead to decreased job performance and increased stress as workers struggle to adapt.
To mitigate these effects, organisations must provide ongoing training and professional development opportunities, ensuring their employees are up-to-date with the latest industry standards and can perform their roles effectively.
Inadequate training and development programmes are a significant cause of skill gaps in the workplace.
Not only that, they contribute to employee fears about their future relevance and job prospects, meaning companies who don’t offer strong skill development risk losing great people and damaging their employer brand.
And most companies aren’t failing on this front due to a lack of desire or trying. It’s often because their skill initiatives get stuck in the planning stages - due to the manual nature of their approach - or because they’re leading with content and content libraries.
The best starting point is always the skills someone needs to perform and reach goals.
Inadequate development opportunities can also hinder career advancement, as employees lack the skills needed for higher-level positions - only risking future growth and our capacity to seize opportunities when they arise.
Well, when we say advice, it’s really a series of steps that you need to follow!
And you get the complete step-by-step guide below, but here’s the TL;DR.
Download the 2024 Skills Guide here.
This is the first domino in the chain. Fail to do this or do it badly, you won’t get too far.
And in a lot of cases, there’s not too much risk of them falling because companies spend months interviewing people manually, building a skills taxonomy from scratch, and collecting all the data in a spreadsheet.
Instead, use a tool - like HowNow - to help you map the skills you need based on the roles in your organisation.
We analyse real-time job market data to understand the skills required for a role and to what level of proficiency.
Then we contextualise that with the data in your organisation to allow you to build relevant, contextual skills profiles in moments, not months.
The goal here is to bring together all the relevant context needed to understand someone’s proficiency.
Which performance data do we have internally that demonstrates someone’s ability to perform a task?
What is someone’s self-assessment of their proficiency in a particular skill?
And can the people who witness them performing those skills - like their manager or peers - validate or add colour to that.
At HowNow, we use the Dreyfus Model of Skill Acquisition - measuring proficiency on a five-point scale from Novice to Expert.
We then use AI to combine that with performance data and project outcomes, so that we can answer questions like: Did this person complete that project on time? And did they complete it to a high standard?
Don’t do this:
Try to close every single gap at once! Not all skill gaps are created equally…
Do this:
Be objective! And try not to solve the skills gaps as you analyse the data. Remember:
So we need to look for obvious and concerning gaps.
And ultimately, this is an exercise in prioritisation.
Our advice here is to start with the gaps linked to the company strategy and goals - these are the most pressing as they hinder the overall performance of the business.
If they’re not clear, go to the skills their manager thinks someone needs to build and then the team and individual level.
Once you’ve identified the priority skills gaps, you need to close them - and this means building targeted, relevant pathways.
They need to take into context the role and environment that person works in.
It will need to give them opportunities to apply the skill in practice, not just learn about it in theory.
And you’ll need to test that they’ve built the skill based on their performance in that, not simply with a quiz or assessment that tests for knowledge.
When employees possess the necessary skills to perform their tasks efficiently, they can complete their work more quickly and with higher quality.
Especially when your learning and development is aligned to the skills and tasks people need to help the business reach its goals.
A well-trained, highly-skilled workforce is more adept at using the latest tools and technologies, further streamlining processes and boosting output.
Improved skills also lead to better problem-solving abilities, enabling employees to address issues proactively and minimise disruptions.
As a result, teams can collaborate more effectively, leveraging their collective expertise to achieve common goals.
So, by investing in the development of employee skills, organisations not only enhance individual performance but also create a more productive and agile workforce.
This, in turn, drives overall business success, as higher productivity translates into increased profitability and a stronger competitive edge in the market.
Employee satisfaction and retention
Closing skill gaps significantly boosts employee satisfaction and retention. When employees feel competent in their roles, their confidence and job satisfaction increase.
Providing opportunities for professional development demonstrates that the organisation values its workforce and is committed to their growth.
This investment in employee development fosters a positive work environment where individuals feel supported and motivated.
Additionally, offering clear pathways for career advancement through upskilling and reskilling can reduce turnover rates.
Employees are more likely to stay with an organisation that prioritises their ongoing learning and provides them with opportunities to grow.
This not only retains talent but also reduces the costs associated with recruitment and training new staff.
A satisfied and skilled workforce is more engaged and productive, contributing to the overall success of the organisation.
By addressing skill gaps, companies can create a loyal, capable, and motivated team, driving long-term business stability and growth.
Competitive advantage in the market
Closing skill gaps provides organisations with a significant competitive advantage in the market.
A well-trained and knowledgeable workforce can respond more effectively to industry changes, technological advancements, and evolving customer needs.
Employees who are equipped with the latest skills can innovate and improve processes, giving the company an edge over competitors.
Additionally, companies that invest in continuous learning are better positioned to adapt to market trends and seize new opportunities. This adaptability ensures that the organisation remains relevant and can maintain its market position.
A highly skilled workforce also enhances the company’s reputation, attracting top talent and clients who seek reliable and proficient partners.
By proactively addressing skill gaps, businesses can differentiate themselves from competitors, offering superior products and services.
Ultimately, this leads to increased market share, sustained growth, and long-term success in a competitive business landscape. Closing the skills gap can also lead to enhanced productivity and business growth.
Download the 2024 Skills Guide here.
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