Skill Gap Analysis: 5 Biggest Mistakes HR Teams Make

How does your HR team perform skill gap analysis? Does your process account for all of your talents? Does it help you prevent skill gaps from arising, or is it merely retrospective?

If you haven’t evaluated your skill gap analysis system lately, now’s a great time to do so. In an increasingly competitive talent market, having a process to efficiently and accurately predict the skill your company will need in the short-term and long-term future is crucial for your ability to meet the demand later on.

Your company’s talent needs are very different today than they did 10, or even two years ago. Thanks to technological advances and rising customer expectations, the need for new skills is constantly evolving and changing rapidly. 

However, many HR departments are still making mistakes that limit their ability to identify talent needs or fill skill gaps. In this post, we’ll cover five of the most common skill gap analysis mistakes HR teams make and how you can avoid them.

This article is part of our guide on the skill gap.

What is skill gap analysis?

But before that, let’s review what skill gap analysis really means. It refers to an internal process companies run through to identify the current and future demand for certain skills, and to what extent (level of expertise, required workers etc.). 

It always starts from understanding the strategy of the company, then clarifying the business implications and the market situation such as skill gaps, available training or educations and cost of sourcing.

Most HR departments at enterprises have such an annual process in place—or at least, they’ve attempted to build one. However, as we know, performing continuous, qualitative, and accurate skill gap analysis can be challenging. Not to mention, overwhelming for smaller companies.

5 top mistakes HR makes in skill gap analysis 

To help you avoid the common mistakes, we’ve prepared a list based on the experience of HR teams at companies ranging from 500 employees all the way to 3,000 employees.

1. Forgetting to include non-payroll talent in your analysis 

Many HR teams still forget that their workforces no longer include only full-time employees. Today, most companies have part-time employees and a host of non-payroll workers, such as freelancers, consultants, and agencies, all of whom should be included for proper analysis.

If your skill gap analysis doesn’t account for non-payroll talents, you will probably identify more gaps than there really are. 

Of course, there are some skills that you need to have in-house. If there is a consistent need for a certain skill and it is fundamental to your business offering, it makes sense to hire full-time. However, many important skill gaps can be fulfilled by freelancers and contractors.

How to avoid this mistake: We recommend building a “talent cloud” or “talent bench,” which includes profiles on all of your non-payroll talent, past and present. This allows you to quickly identify suitable talent when a skill gap arises, and jump into work quickly. 

2. Not having a system to prioritize skill gaps

If you look at almost any company’s career webpage, you will probably find a dozen or more open positions. Presumably, these companies are seeking candidates who can fill current skill gaps. But a passive approach like this generally corresponds to less severe talent needs. If there were a crucial gap, you can bet the company’s HR team would be actively recruiting—even poaching—top talent from other companies.

Different types of skill gaps require different strategies. That’s why having a system in place to prioritize skill gaps according to their severity and urgency is crucial.

For example, finding talent with skills that are extremely important to your business, in-demand, and in low supply should be prioritized higher than skills that aren’t of crucial need, or are of abundant supply in your market. 

How to avoid this mistake: Continuously check in with department heads to understand their needs as they set new goals. By understanding how skill gaps impact each department’s ability to succeed, you can more accurately assess their severity and prioritize them. 

One area to pay particular attention to is tech-related skill gaps. Today, the skill gap is widening in advanced technical roles, such as experienced programmers, AI developers, and data engineers. Keeping a pulse on this skill gap and proactively trying to close it will be essential to staying relevant in the future. This involves consistently checking in with R&D, IT, and dev teams to predict where new skills will be needed and proactively filling them—either with new full-time workers or contractors—before the gap begins to negatively impact business success.   

3. Not properly supporting self-learning

Many organizations today have adopted upskilling as a response to current and future skill gaps. Upskilling can be an effective tactic for certain types of roles and skill needs. As long as the individual is motivated and able to learn, there’s no reason why existing talent can’t fill some skill gaps. However, the organization must be prepared to support a self-learning workforce.

This often involves sponsoring workshops, tutorials, and training sessions. It could mean registering your workers up for webinars, or sending them to a conference. It means allowing them to dedicate time out of the work day to training, and providing ample support throughout the process.

It also involves gauging employees’ ability to self-learn before you hire them. If you are a rapidly growing organization and you expect everyone to constantly learn and develop new skills, candidates must have the drive to expand their knowledge and build new skills.

How to avoid this mistake: If you start viewing upskilling as a formal process with its own set of KPIs, you will set your organization on the right track. Like all other company initiatives, training and self-learning can only be successful if it receives adequate attention, resources, and structure. 

For example, it is unreasonable to expect employees to pay for their own training, or spend their evening hours studying a new skill. These factors must be incorporated into the workday and have managerial oversight. However, it’s important to discuss the need for self-learning during the interview process to determine whether a candidate possesses the necessary skills and drive to learn new things.  

4. Waiting until it’s too late

When performing skill gap analysis, it’s important to forecast future talent needs in addition to analyzing current needs. If you wait until you have a glaring skill gap, it could be too late. For the most in-demand skills, the process of recruiting and onboarding qualified talent—whether full-time or freelance—could take months.

If your HR department isn’t synced on your company’s long-term strategy, it will be unable to identify which skills are most important to realize it. Moreover, it won’t know that it should begin recruiting those skills now

How to avoid this mistake: First, HR must work closely with your executive team to align on the business strategy. It also needs to work with individual department heads and managers to understand whether they already possess needed future skills, or if they should start recruiting them. 

Finally, HR should train managers on how to assess workers’ experience (both employees and freelancers) to ensure valuable talent remain engaged and satisfied in their roles. After all, poor retention is another direct cause of skill gaps. 

5. Failing to consider productivity

Skill gaps are closely tied to productivity gaps. Where a team lacks a certain needed skill, it’s safe to assume their work is slower and their outputs are less competitive.

Although many factors can lead to poor productivity (such as poor processes, lack of clarity of responsibilities, low accountability, inadequate technology, etc.), skills and experience is a major contributor. 

For example, a worker who does not know how to use HubSpot, but is responsible for using it to do marketing automation, will not be able to work productively on this software. An inexperienced customer service manager will not be able to get through support tickets very quickly.

How to avoid this mistake: First, look for areas across the company where poor productivity is limiting your success. Each department head should be able to identify at least one area where there is a productivity drain. More of than not, a skill gap is at the source. 

Second, reevaluate your training and onboarding processes. Is your company adequately onboarding new workers so they can perform at their highest level? Are you training them on how to complete core processes and use your enterprise software, or are you throwing them into the deep end? Sometimes, productivity problems can be resolved with better training. 

Boost your skill gap analysis and help your company thrive

Learning by example is one of the best ways to improve, even if the examples demonstrate what not to do. By avoiding these common HR mistakes, you can improve the effectiveness of your skill gap analysis, better predict future talent needs, and build up a highly skilled workforce of all types of workers.

Written by
Maya Rotenberg

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