Irina Ketkin
- Jul 15, 2021
- 4 min read

How to track employee skills gaps and development

Assessing, as well as tracking employee development is an important part of the employee life cycle. The information collected from learning and development interventions can be used to feed succession planning, talent management, career development, and performance management, so it is important to record and track it accordingly.

In this article, we help you get clarity around how to do that, as well as what to do with the information, once you’ve collected it.

What are skill gaps?

Skills gaps tell us the difference between what skills the organization needs and what skills employees currently possess.

Regularly conducting skills gap analysis will help you identify skills you need to meet organisational goals. And that, in turn, benefits the whole organization as it is easier to adapt to changing needs, respond to skill shortages and sustain its innovative edge.

How to Perform a Skills Analysis Gap: 5-Step Process

Step 1: Setting the scope

Your first step in setting the scope is finding out if the analysis is even required. Some common reasons for doing a skills gap analysis are:

Succession planning
Changes in the role, team, or the entire organization
Regulations or compliance
Launching new products or services
Mergers, acquisitions, downsizing, etc.
Changes in customer needs
Use of new technology
Decrease in individual and/or team performance
Joining of a new team member
Continuous professional development

Skill gap analysis can be performed on 3 levels:

Individual Gap Analysis

At this level, you compare the skills of a specific employee with the requirements of their job. For example, an Instructional Designer requires deep knowledge of adult learning principles. However, if that person has never had to develop such programs before, it’s safe to assume their existing skill level is low.

Team/Functional Gap Analysis

At this level, you compare the skills of a whole team or a function to the competencies required to accomplish their goals. For example, a Marketing team, that uses an external agency for all their digital marketing, wants to make savings and start doing it in-house. Again, the chances are their current skills are probably low, if they’ve never done this kind of work before.

Organizational Gap Analysis

At this level, you compare the skills needed to realize the company’s vision and mission with what is currently available. Often, a combination of individual and team/functional gap analysis will be sufficient to draw conclusions on the state of the existing and desired organizational skillsets.

Step 2: Identifying important skills

There are several places where you can find information about the important skills required at each level. At the different levels, these include:

Individual: Job descriptions, interviews (with employees, their managers, and even clients), observations, performance records, customer satisfaction records, etc.
Team/Functional: team goals, team performance records, interviews (with team members, their manager, and their dedicated HR business partner), feedback from customers, observations, development centers.
Organizational: Business objective and goals, company values, company culture, engagement reports, competition analysis, industry reports, and benchmarks.

Once you have identified the important skills, take some time to prioritize them by their importance. You can be as detailed as you deem fit – use a 5-point rating scale (low to high) or record detailed comments.

Step 3: Measure current skills

Regardless of the level at which you are conducting the analysis, you will have at your disposal several data collection methods:

Self-assessment questionnaires: employees rate their own capability. Can be subjective.
Capability tests: a multiple-choice or open-ended test that measures current capabilities. Best for measuring theoretical knowledge.
Interviews with employees: live conversation (online or offline) with employees to gauge their skills levels. Relies on the self-awareness of employees.
Interviews with line managers: live conversations (online or offline) with line managers of one or more employees. Dependent on managers’ abilities to observe and be objective.
Interviews with senior leaders: live conversations (online or offline) with one or more senior leaders. Especially useful in understanding the bigger picture and the strategic direction of the business. Senior leaders could be powerful allies in pushing through the L&D agenda.
Interviews with HR Business Partner(s): live conversations (online or offline) with the HR Business partner responsible for a given function. HRBPs are usually aware of more global issues and skills gaps on a team/functional level.
Feedback from performance reviews: Review of performance records that may indicate strengths or development areas.
Observations: personal observations of an individual or a team. Can be very time-consuming and requires great observational skills and a good understanding of the nature of work.
Development centers: an organized event (usually day-long) where participants are tasked with various activities for the purpose of establishing their strengths and development areas. While they perform these tasks, there is a team of observers who take detailed notes. This type of event can be time-consuming to prepare but yields very close-to-real-life results.
Review of industry benchmarks: research secondary data sources, like publications, research reports, and academic journals on what skills are needed to accomplish goals similar to the ones of the organization.

Step 4: Make recommendations

Your recommendations need to be based on 2 things:

Does the person/team have the skills required to do the job?
Is the person/team motivated to achieve their goals?

Based on this, there are 4 options:

This is called the Performance Analysis Quadrant. L&D solutions only truly have an impact when people do not have skills but are willing to learn. In all other cases, you need to enlist help to solve problems related to recruitment and selection and lack of appropriate resources.

Skills can be trained by professionals, taught by manager and colleagues, learned through observation but most importantly, practiced back on the job.

Motivation can usually be enhanced with coaching and mentoring.

Step 5: Act on findings

Create a clear plan of action based on your findings and recommendations. Get all buy-in from the relevant stakeholders, secure a budget and get to work.