Skill gap analysis template: Build a customized tool for your team

The expanding skills gap crisis: Why your company needs a skills gap analysis template

Employee skill gaps are becoming increasingly prevalent across most industries, and if left unchecked, they can cause serious problems.

This reinforces the need for a skill gap analysis template. They will help you identify and take steps to resolve any critical skills gaps currently affecting your organization, which most companies need to do in today’s age.

The proof?

IT departments are having difficulty keeping up with the rapid pace of new technology and digital transformation, triggered mainly by the pandemic. 67% of senior technology leaders cite skill gaps as the reason why their companies need to catch up.

However, IT is far from the only industry feeling the heat from significant skill gaps.

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80% of manufacturers also report moderate to severe shortages of qualified applicants for highly skilled production positions. If this issue isn’t resolved, nearly 2 million vacant manufacturing jobs will be due to skill gaps by 2025.

Moreover, 87% of companies worldwide (regardless of industry) either have a skills gap or will have one within the next few years, according to a study by McKinsey & Company.

These statistics reflect the current state of employee skill levels and don’t paint a rosy picture, to put it lightly.

The good news is that you can use our free skills gap analysis template to conduct an organization-wide skill assessment of your employees – so stay tuned to learn how.

What’s a skill gap analysis?

A skill gap occurs whenever there’s a discrepancy between a current employee’s skills and the required skills for their position. This discrepancy can significantly impact an employee’s performance, leading to inefficiencies and potential errors in their work.

Skill gaps can occur for hard and soft skills, as hiring an employee who lacks the right soft skills for their position is possible.

An example would be a computer programmer who doesn’t have solid problem-solving skills, which are necessary for fixing bugs and glitches.

A skill gap analysis is where you assess your current employees’ skill sets and skill levels.

It involves identifying the specific skills required for each position, including any desired skills from upper management (such as computer programmers who excel at problem-solving).

From there, you compare your team members’ competency level to the required skills you prepared for each position.

Wherever discrepancies exist between the skills you want and an employee’s current skills, a skill gap occurs.

Identifying the gap is the first step toward resolving it. Once you know a gap exists, you can determine if the employee needs a training plan, upskilling, or reskilling (more on these in a bit).

Regular skill gap analyses are necessary for any organization to thrive in the current work landscape. As mentioned previously, the pandemic triggered many skill gaps related to digital transformation, especially for companies that transitioned to remote work.

Just this simple transition required a whole host of new skills for most individual employees and managers, including:

  • Familiarity with remote time-tracking software
  • The ability to successfully manage remote employees
  • Time management when working from home
  • Maintaining communication with employees through digital channels (i.e., Zoom, Slack, etc.)

Because of this, even organizations that had next-to-no skill gaps before the pandemic suddenly struggled to keep up with all the changes.

Suppose you want to improve employee performance across the board while keeping up with new technologies. In that case, you need to familiarize yourself with how a skill gap analysis works – which is where a template comes in handy.

Why should you use a skill gap analysis template?

Skill assessments don’t happen overnight; they take time and resources to pull off properly. That’s not to mention the expenses involved with meeting employee training needs to bridge any skill gaps you find.

For these reasons, some organizations may be hesitant to implement skill gap analysis templates on an individual level.

However, your skill needs aren’t something you can hope will go away with time.

Instead, skill gaps worsen over time, so it’s best to catch them before they get out of control.

Also, hiring and retaining employees with the necessary skills required for each position is integral to meeting your business objectives and ensuring profitability – especially if you want to remain competitive in your space.

Here’s a look at the top ways using skills gap analyses will benefit your organization.

Better employee performance

A skill gap analysis involves more than hiring employees with the right skills. It’s also about developing your existing team members to remain competitive in their positions.

The requirements for job positions are subject to change over time, so employee development programs are a necessity.

An example would be a company adding project management and remote time-tracking software to manage employees working from home.

Until now, their managers have only managed staff in-house, so the new programs are entirely foreign to them.

During a skill gap analysis, the company becomes aware of this and provides appropriate training programs covering the new software.

That’s a simple example of how identifying and closing skill gaps will keep your employees performing at their best.

When you combine that with job descriptions prioritizing up-to-date skills, your entire workforce will be firing on all cylinders.

Have an easier time meeting business goals

As we’ll discuss, the first step of a skills gap analysis is to define the individual skills required to meet your primary business initiatives.

If you never do this, numerous skill gaps will inevitably pop up in your organization, and it’s only a matter of time before they affect your bottom line.

For example, the COVID-19 pandemic wasn’t the only driving force behind the current skill gap crisis.

Advancements in artificial intelligence technology have also created significant skill gaps at many companies across the globe.

Whether companies adopt AI-powered software like ChatGPT or automation software, these technologies require specific technical skills to operate correctly.

If your workforce planning includes regular skill assessments, you can catch these skill gaps and take appropriate steps to close them. This will make it far easier to find success with your business strategy, whatever it entails.

Improve employee retention

Besides having an easier time meeting company needs, closing skill gaps as soon as they appear will also positively affect your employees.

In particular, you’ll likely experience better employee retention due to regular skill gap analyses.

According to APA’s 2023 Work in America survey, 91% of the respondents reported that having a job with consistent opportunities to learn and further develop their skills is very important.

Also, a survey by INTOO and Workplace Intelligence polled 1,600 full-time workers and found that 25% of them would quit their jobs in the next six months due to a lack of company support and opportunities for development.

Regular skill assessments and performance reviews remedy this, as they’ll keep your employees learning new things and developing their careers.

The components of a skill gap analysis template

By now, it should be clear that a skill gap analysis is very much worth your time. Yet, you need to know the right way to conduct one for it to work truly.

You should familiarize yourself with the primary components of a skill gap analysis template so that you can create a custom one for your organization (we’ll also provide a free template at the end of this post).

Create a list of integral skills for each job position

You’ll need to sit down with key organizational decision-makers and stakeholders to develop a list of core skills for all departments and job roles.

This is a time-intensive process, but the good news is that it only needs to be done once. From there, you can pencil in new skills as they appear on your list.

Remember to consider your business goals when devising this list.

For example, if one of your primary objectives is to boost your profitability, you’ll need a sales team that excels at converting prospects into customers.

Specific skills that encompass this ability include:

  • Prospecting
  • Active listening
  • Negotiation
  • Persuasiveness
  • Closing skills

If you’re driven by profit, these should populate your list of necessary skills for new salespeople.

Consider all the soft, hard, and technical skills each position should possess, and make sure your job descriptions reflect them.

Designate a priority level for each skill

Once you’ve created a thorough list of skills, the next step is to designate a priority level for each.

Ask yourself, “How crucial is this skill for the day-to-day operations of this job role? Will this skill inch us closer to meeting our business goals?”

Answering these questions will help you determine the priority level for each skill. If the skill is vital in meeting business initiatives, it should receive a high priority level.

It would be nice for the role but isn’t completely necessary (like learning tasks from other departments); it should receive a low priority level.

Lastly, designating a medium priority level is the way to go if the skill is somewhat important but doesn’t affect the day-to-day job role.

It may take a while, but once you’re done, you’ll have categorized all your skills by level of importance, which is an outstanding achievement. Now, you have a starting point for your skills gap analysis template and a foundation to build upon in the future.

Develop a spreadsheet template to use on individual employees

Now that the hard part is done, you can plug the data into a spreadsheet template. After that, you can create a copy for each employee in every department.

Here’s a suggestion for columns to use:

  • Individual skill. This column is for every hard, soft, technical, and team skill a job role needs to have.
  • Priority level. This column is for housing the skill priority levels you developed in Step 2. The most popular priority levels are low, medium, and high – but you can create custom levels as you see fit.
  • Current Competency Level. How competent is the employee at the skill currently? This column is crucial for determining if any skill gaps are present. Standard options include beginner, intermediate, and expert – but it’s up to you to fill in the details.
  • Desired Competency Level. This column is for your expectations for the role. How competent do you want an employee to be at a particular skill? Do you need an expert, or will someone with intermediate knowledge work?
  • Skill Gap. Here is where you’ll determine if there’s a skill gap present. If an employee’s current competency level is lower than the desired competency level, then you’ve got a gap you need to close. If the employee is just as competent (or more so) than the desired level, they possess all the skills they need to do their job correctly, and no further action is required.
  • Actions to Close Gap. What do you plan on doing to close the skill gap? In this column, you lay out your plan to provide training, reskilling, or upskilling.
  • Status. This column lets you know your progress in terms of addressing and resolving the skill gap. It’s an important column to have because it provides a form of accountability for seeing the process through to its end. It’s also a great way to stay organized when addressing multiple skill gaps.
  • Notes. Are you going to face any specific challenges with this particular skill gap? Is there anything else your HR team should know about it? This column is for that, so include any notes you have.

Once you’ve got all these columns in a spreadsheet, your skills gap analysis is ready for use.

How to conduct a skills gap analysis with your template

Once your template is ready, it’s time to assess each employee’s skill competencies.

Fill out the template with the employee’s name and department. Next, go over each individual skill required for their position.

To determine an employee’s current level of competency, consult their:

  • Past performance reviews
  • Any relevant certifications or online courses
  • Competency assessments
  • Interviews and sit-downs with the employee

Combining several sources to identify an employee’s true competency level with a skill is essential. Taking their word for it won’t suffice, as they may not be truthful with you during 1:1s and interviews. Even so, it’s important to remind your employees that you aren’t judging them on their competency; you want to see if they need to learn any new skills.

Once you have a grasp on their current level of competency with a skill, compare it with the desired level of competency and priority level.

If there’s a discrepancy, you must fill out the spreadsheet’s Skill Gap and Actions to Close Gap columns. If no discrepancy exists, the employee is adequately skilled, and you can end the process.

For employees requiring further action, determine the best way to close the gap (like with a series of training sessions) and select the Status’ in progress.’

Fill out any notes you may have about the skill gap, and then you’re ready to move on to the next employee.

Free skill gap analysis template

We’ve done some of the hard work for you by creating this completely free skills gap analysis template encompassing all the columns listed above.

Click here to download a copy of the template so you can start conducting skills gap analyses at your organization sooner rather than later.

Wrapping up: Skill gap analysis template

Skill gaps pose a genuine threat to virtually every organization in today’s age, regardless of industry. From IT to manufacturing, there’s a noticeable discrepancy between the required skills for job roles and the current skills of available prospects.

The best way companies can combat this issue is to administer frequent competency assessments and skill gap analyses to identify and resolve skill gaps – and our free template will help you do just that.