How to Conduct a Skills Gap Analysis in 5 Steps

In today’s fast-changing work environment, knowing what your team can do is just as important as knowing what they should be able to do. A skills gap analysis is the bridge that connects these two realities. Whether you're planning your next hiring spree, revamping your training programs, or preparing for digital transformation, a well-done gap analysis can save you time, money, and headaches.

This blog will walk you through a simple, 5-step method to run a skills gap analysis, even if you're new to the concept.

What is a Skills Gap Analysis?

A skills gap analysis is a process where HR or management identifies the skills employees currently have and compares them with the skills they need in order to meet business goals. The result? A clear roadmap for hiring, training, or reskilling.

Think of it as running a diagnostic check on your workforce before making important business decisions.

Step 1: Define Your Business Goals

Start by answering: What does success look like for your company in the next 6-12 months? This could be launching a new product, entering a new market, or adopting a new technology.

Once clear, list out the skills required to achieve these goals. For example:

• Data analysis for a marketing revamp
• Cloud infrastructure knowledge for an IT transformation
• Customer engagement for a new retail push

Step 2: Map Out Existing Skills

Before bridging the gap, you need to know where you stand. This involves identifying the skills your employees already possess. You can do this by:

• Running employee self-assessments
• Conducting manager evaluations
• Reviewing past performance appraisals
• Using HR tools with skills tracking features

Tip: Try not to rely only on self-reporting; balance it with performance data and supervisor input.

Step 3: Identify the Gaps

Now, compare the current skill sets with the desired ones. Highlight areas where there’s a shortfall. You might notice that:

• 60% of your marketing team lacks SEO knowledge
• Only 2 out of 10 engineers are familiar with the new software
• No one has formal training in negotiation, despite regular vendor dealings

Categorize the gaps into:

• Critical (needs urgent attention)
• Important (can be addressed over time)
• Future-facing (for upcoming needs)

Step 4: Design Targeted Development Plans

Once you know the gaps, you can start bridging them. Your approach might include:

• Training programs or workshops
• Online courses or certifications
• Cross-functional projects or job rotations
• Coaching and mentorship initiatives

Pro tip: Involve employees in planning their learning paths. Engagement goes up when learning feels personal.

Step 5: Monitor, Measure, and Revisit

A skills gap analysis isn’t a one-time event. Make it a regular part of your HR strategy. Use HR tech tools to:

• Track learning progress
• Update skill maps
• Reassess gaps after major changes in the business

This way, you're always audit-ready, agile, and aligned with business goals.

Key Takeaways

• Start with business goals, not just job descriptions
• Use a mix of self-assessments and manager insights
• Prioritize gaps based on business impact
• Create development plans with short and long-term actions
• Make skills tracking a part of your HR routine

In a world where the only constant is change, your people are your biggest asset - but only if they’re growing with your business. A skills gap analysis isn’t just about finding what's missing - it's about unlocking potential.

Ready to start? A simple Excel sheet is enough to begin, but for growing teams, an HRMS like HRStop can help you track, assess, and close skill gaps at scale.