How to analyse and document skills gaps

How to analyse and document skills gaps

Work through the steps to take to unearth what skills are missing and needed in your business.


Skills outlook

A McKinsey Global Survey reports that 87 percent surveyed say they either are experiencing skills gaps now or expect them within a few years.


The Australian National Skills Commission notes there are shortages in 286 occupations, and there is a 42% increase in jobs being advertised.

With trends like these it is important your workforce is prepared for the future.

Leahanne King, Head of Employee Experience and Wellbeing at Chisholm sees a shift in organisations adopting a skills-based model. “This model is centred around employee centricity, their capabilities and competencies versus fixed job roles and job functions. To adopt a skills-based model, organisations need to identify what skills are required across their business.”

To better understand what skills your business will need down the track an analysis on current and future skills is required to inform decisions on how best to confront skills gaps by reskilling and upskilling employees.

What is a skills gap analysis?

A skills gap analysis is the process of determining the current state of your workforce skills and comparing that to what future skills are required, resulting in the identification of the gap in skills. Skills gaps can be soft skills or technical skills.

“Conducting a skill gap analysis provides an employer with an understanding of the required skills they need for their business and allow them to accurately apply these to position descriptions and advertisements for prospective employees. It also allows an organisation to assess what training is likely to be required for current employees and adds to the overall employee engagement and competitive advantage.” Leahanne says.

The analysis then needs to be documented, forming a valuable tool to detail employee learning and development plans.

The documentation can be as simple as a Word or Excel document but for larger organisations a talent management system could be utilised to streamline efficacy.

Skills Gap Analysis Steps

Step 1 – Review your organisation’s strategic plan and business goals.

Reviewing your businesses priorities helps to create boundaries for the scope of your training program.

Assess where your business is today and where it wants to be in 1 to 2 years and 3 to 5 years.

Step 2 - Outline and evaluate current skills

Review and outline what skills your employees have now.

Inputs into this analysis can include position descriptions, annual employee goal setting documents and performance reviews plus any existing learning and development plans.

It’s also crucial to get feedback from employees and managers to see if any new issues have arisen that may impact this step, especially if the annual plans were conducted long ago. There may be new skills required that were not a consideration in the past.

Step 3 – Identify future skills for each role to meet short- and long-term business objectives

Along with inherent business knowledge of what skills are needed, review and document what soft skills and technical skills are on the rise.

Interrogate industry data from reputable sources like the Australian Government’s Labour Market Insights website which sets out skills required based on occupation and employment trends across industries.

Reviewing what competitors are doing can also provide valuable insights into what skills are needed. This includes reviewing competitor recruitment ads on job boards as they will highlight skills area that may have been overlooked by your teams.

Step 4 – Cross reference your skills and identify gaps

The last step is to merge and cross reference current skills and future skills by position.

Where to from here?

Now that skills gaps have been identified, the final step is to map out training needs to eliminate the skills gaps. A learning and development plan will need to be put in place to undertake the training. Prioritisation may be required, depending on which skills require priority improvement, based on business imperatives.

Leahanne notes, “in this fast-changing environment particularly in the area of technology a learning and development plan is imperative to ensure your employees and business are equipped for the future.

Learning plans ensure your employees feel supported and increases employee engagement. Learning plans should involve employee consultation as part of the design, an understanding of training methods and their suitability and an understanding of the learner is required and expected outcomes. Finally at the completion a reassessment of skills level is required to ensure the expected outcome has been achieved.”

Chisholm have a training needs analysis template that can be used to self-guide this process. Alternatively, you can contact an Industry Specialist to discuss your workforce training needs.