Identify, Analyze, Close, and Overcome Skills Gaps with Skills Management

Dynamic industry transformations, workforce shortages, and technology are impacting organizations daily, leaving workforce skills as a key topic of conversation for businesses. Leaders want to understand skills across the workforce, identify and conduct skills gap analysis, and strategically train employees to prepare the business for change.

  • 74% of CEOs are concerned about the availability of key skills within their organizations.
  • Nine out of ten executives face current skills gaps and expect them to continue growing in the next five years.

In the podcast, “Skills Management in the Larger Learning Management Landscape,” published by GP Strategies, experts Jai Shah and John Plusquellec sat down with Michael Theil to talk through skills management and its role in operational work environments, especially as business leaders strategically adapt their workforces to identify, assess, and close skills gaps to meet evolving industry demands. Check out some of the key takeaways below and listen to the full GP Strategies episode here.

Table of Contents

Frequently Asked Questions About Workforce Skills Gaps

A skills gap is the difference between the existing skills an employee possesses and the skills needed to be proficient in their job role. At the organizational level, a skills gap is the difference in the supply of workforce skills and capabilities and the demand for what is needed to operate the business or achieve goals.

A skills gap analysis is the process of measuring skills that exist in the workforce in comparison to what is needed to operate the business.

To perform a skills gap analysis, leaders have to understand the skills across the workforce, identify business-critical skills, measure proficiency of existing workforce skills, analyze the differences, and develop a plan of action to close skills gaps by training existing talent or hiring external talent.

What is Causing Skills Gaps?

Changes across industries are happening and accelerating quickly, especially in highly technical and regulated industries. As this occurs, organizations are craving the ability to identify, track, and understand workforce skills. Skills gaps across different workforces are due to a variety of factors. For example:

  • In energy, the Green Revolution and nontraditional resources require a different skill set than drilling for traditional oil or even drilling for oil in deeper, more complex environments. Ultimately, this is increasing the need for upskilling, reskilling, and cross-skilling efforts throughout the workforce.
  • In manufacturing, the combination of an aging workforce and emerging smart manufacturing technologies leave organizations with gaps in institutional knowledge from throughout the business as well as new emerging skills. Many organizations are reevaluating employee training programs to ensure the inclusion of traditional, experience-based knowledge, as well as contemporary skills, to address skills gaps and shortages. 
  • In healthcare, rising nurse shortages are leaving many hospitals understaffed. This is increasing the need for cross-skilling and cross-training to quickly close skills gaps, and then mobilize qualified nurses to care units throughout the system.

Using Skills Data to Overcome Industry Change

As business needs evolve, identifying gaps in skills, knowledge, and experience is a complex task without the right systems, processes, and data. The traditional methods and systems used to measure human performance and capability are no longer sufficient, especially for the deskless worker. Leaders need to take a more strategic approach and invest in skills management to understand the granularity of skills, experiences, and knowledge across their workforces in a more data-driven format. This information can then be leveraged to understand the supply of workforce skills in comparison to industry and business demand and be used to craft strategic training programs for employees, or even to hire externally to close workforce skill gaps.

Closing Skills Gaps is a Collaborative Effort

Skills are a business-critical issue for multiple departments across the organization. Who initiates the process of finding a better solution to manage skills and skills gaps? The leader of the effort can vary from business to business, but typically it’s someone who has a direct stake in operational outcomes. A real-world example comes from a large defense organization where an operational leader was charged with managing proficiencies and a skills program. To begin this process, they went to human resources, were directed to an individual leading learning and development, and then began working together to find a technical solution capable of managing complex skills processes.

New call-to-action

Integrating Skills Management Technology into the HRIS Landscape

Often part of the equation in collaborating across departments is understanding where a skills management system fits in with the overall technology landscape. Because skills are a central component of the business, they feed into other functions and processes such as hiring, training, staffing, career development, and in some cases pay.

Integrating skills management systems into the larger technology stack creates an ecosystem of skills-aware systems that enhance the effectiveness of business processes. This also provides a single source of truth across the organization for employees on the front lines, managers, leaders, and the C-Suite.

kahuna integrates with your hr tech stack

Learn more about Kahuna’s top skills management platform and how it fits into the larger technology stack. 

How to Identify, Analyze, Close Skills Gaps

Historically, the approach to training and development throughout most organizations is very templatized. Individuals with the same job code across the business, regardless of prior knowledge, skill, or experience, go through the same planned training activities. If they transfer into a new role, repetitive training occurs based on the standardized curriculum. An employee may enter into a job with 80% of the skills and proficiencies required. However, rather than training to close the 20% skills gap, they’re working on activities for all 100% of the skills for that role. 

Organizations need to shift away from this templatized, global learning view, to a skills-based approach to training and developing people. For this approach, the individual above may review the 80% of skills to ensure they are current in proficiencies, but most of their time is focused on closing skills gaps for the 20% of skills needed to operate efficiently and effectively in their new role. How do you begin with this approach?

  1. Understand the full picture of skills tied to each job role across the organization.
  2. Outline the key business objectives, goals, and success metrics.
  3. Identify business-critical skills the workforce needs to achieve these goals. 
  4. Conduct a skills gap analysis to determine which of those skills exist throughout the workforce and what skills are missing. 
  5. Measure workforce and employee proficiency of the existing skills.
  6. Create targeted strategies anchored in closing business-critical skills gaps for job roles, including training and development programs or hiring external talent to meet skill demands.
  7. Perform continuous analysis of skills throughout the workforce by qualified assessors to ensure skill and proficiency levels are met.

In this new skills-based approach to training and development, employees gain access to personalized, engaging development courses and feel more motivated and respected with their time. If they move to a new role within the business, documentation of their existing skills and capabilities follows them, eliminating repetitive and redundant training processes. For organizations, this model quickens time to productivity and revenue and increases employee engagement and satisfaction.


Align Your Skills Framework to Business Needs and Close Skills Gaps

Download our skills matrix template to build a comprehensive skills framework fully aligned to your workforce and business needs.

Benefits of a Skills-Based Gap Closure Initiative

For both employees and the organization, a skill-based approach to gap closure has profound benefits.

Employees: Enhanced Growth, Well-Being, and Job Satisfaction

  • Visibility into career possibilities for current and future roles.
  • Feeling of respect towards time and energy spent in learning and development activities with organizational acknowledgment of existing skills, knowledge, and experiences.
  • Opportunity for rewards, recognition, and compensation benefits tied to skill and capability milestones.
  • Confidence and sense of accomplishment in performing at a high level, taking on complex tasks, and problem-solving.
  • Increased mobility opportunities for jobs within the organization. 
  • Improved job satisfaction with an engaging and encouraging work environment.

Organizations: Increased Capability, Competitive Edge, and Agility

  • Increased employee engagement throughout the learning process and career journey.
  • Improved talent retention and attraction with opportunities for skill enhancement and growth. 
  • Increased efficiency and productivity with less time spent on trial and error because of a more skilled and knowledgeable workforce equipped to handle tasks and challenges. 
  • Strategic alignment with business goals and more informed decision-making capabilities.
  • Reduced costs associated with rework, safety incidents, errors, and non-compliance penalties.
  • Increased adaptability to changing markets with an agile workforce. 
  • Greater customer satisfaction with employees providing better service and high-quality products.
  • Reduced risk and improved compliance with industry standards, organizational protocols, and government regulations.

Getting Started with Skills Management to Close Skills Gaps

Beginning the journey of skills management doesn’t have to be an overly complex task. The three most important factors are to define the end goal, gain executive buy-in, and map job roles with skills for the organization.

Begin with the End in Mind

Why does the organization want to collect and understand skills data? Is it to transition your workforce into a new business venture, digitize burdensome data sets, or enable more robust training and development methods? Whatever the case, skills management initiatives with hard business-driven outcomes are the ones that will be around long-term and drive long-term results.

Gain Sponsorship from Leadership

Successful skills management programs are driven by executives with a vision and understanding of where the organization is going and what information they need to make strategic decisions to get it there. Identifying key stakeholders from across the business will go a long way in the sustainability of the skills management initiative.

Curate a Skills Framework

Create a skills matrix to identify critical roles within the organization and what skills or capabilities align with them. If this is an overwhelming task to do across the entire business, choose one section, map roles and skills there, and move forward. For choosing a skills management technology that can house this data, think about what can assess employees, identify skills gaps, and provide guidance in developing employees moving forward.

Interested in learning more about how skills management can help your organization overcome skills gaps? Connect with a skills advisor to learn more about Kahuna.