Skills Gap Analysis for the Future of Work

How do we conduct a skills gap analysis for the future of work, when we aren’t sure what the future of work is?

It’s a conundrum, isn’t it?

In a time when organizations are experiencing an ever-increasing need to reskill and upskill their people, the skills gap analysis is an increasingly powerful tool to build business impact. Yet, for the most part, this tool languishes at the bottom of the toolbox.

The past 24 months have taught us that the workplace is in flux, and will continue to be in flux for some time. How many people had the title of “Remote Work Specialist” before 2020? How many people have it now?

Coming up on the next Learning Rebels Coffee Chat, we will be discussing Skills Gap Analysis as a tool to help us create stronger ties to the business and add real business value. (You’ll see why a bit further down in this post). 8 years ago, I wrote a post on why we need to put on our detective hat when investigating learning needs within the business. The premise being we needed to be more like a detective rather than a trainer. This need is even more critical now.

There are many in the industry who, for a variety of reasons have never performed a deep skills gap analysis. As with any skill determination, it boils down to three reasons:

• We don’t have the knowledge.
• We don’t have the tools.
• We don’t have the desire.

Why you should keep reading

What I’m hoping to do in this post is to shed a light on the immediate need for a skills gap analysis.

• Maybe you have the knowledge and want to conduct an analysis, but the business won’t give you the time. Use the information in this post to help build your business case.
• Maybe you don’t have the knowledge and want to begin the process. Use the information below to begin building your skills (check out the needs analysis tool at the bottom of this post).
• Maybe you’re tired. You’ve been there, done that, bought the “I did a skills gap analysis and no one cared” tee shirt. I hear you. But people the future is now. Tik-Tok dispersed their ENTIRE training department, a hundred people. RedFin recently conducted a massive layoff, most of which in People Services. Pick yourself up, your business really does need you. Use the information below to start building your case (again).

What do we mean by skills gap?

When there’s a mismatch between the skills employers desire and the skills that their employees bring to the table. That’s a skills gap – that variance between what’s needed and what’s possessed.

A skills gap analysis is a tool used to assess that difference. Organizations use it to identify the skills/competencies that an individual employee needs but doesn’t necessarily have to carry out their job or to perform certain tasks effectively.

Why is a skills gap analysis not just useful but imperative?

In its 2018 The Future of Jobs Report, the World Economic Forum stated that by 2022, no less than 54% of all workers will need to update or replace their competencies. In their 2020 report, they state: “…employers expect that by 2025, increasingly redundant roles will decline from being 15.4% of the workforce to 9% (6.4% decline) and that emerging professions will grow from 7.8% to 13.5% (5.7% growth) of the total employee base of company respondents.

What does this mean for the skills market?

It is stated that in the absence of ready talent, employers surveyed through the Future of Jobs Survey report that, on average, “they provide access to reskilling and upskilling to 62% of their workforce, and that by 2025 they will expand that provision to a further 11% of their workforce”. However, employee engagement in those courses is lagging, with only 42% of employees taking up employer-supported reskilling and upskilling opportunities.

Why is that?

In the image below, we see the barriers to the adoption of new technologies. Anecdotally as an industry, we know these very barriers are present when trying to provide upskilling to an employee base. While we may want to provide opportunities to improve capabilities, the business and business leaders may not support sharing capacity. In short, we may have the tools but the business may not want to give up the time.

The obvious truth.

Organizations that depend on growth, will need to support new skills. Now is the time to build your business case.

The truth is – within organizations, and across all industries, certain jobs will disappear due to automation, while others will change in terms of their core tasks, competencies, and responsibilities. (I would ask you to check out #19 on the decreasing demand list.)

Where job reimagining becomes critical.

The rearranging of competencies and skills is required in order to align them more strongly with the changing reality of work. Not just future work, but current work.

However, before we start pulling out surveys and spreadsheets, it’s important to know what skills and knowledge are currently missing in your workforce. Then determine which of those skills are essential for your organization’s performance.

Top 15 Skills for 2025

As stated by the World Economic Forum, these are the top 15 skills as we look forward to 2025. As an industry are we prepared? Are we focused on developing people for new competencies, or are we busy creating version 142 of communication skills?

How can a skills gap analysis help add impact to the business?

Armed with the data from above, L&D is poised to add impact to the business not only now, but in the future, as through the skills gap analysis, you will gain invaluable insights into your workforce.

Consider these areas of immediate impact:

• Widens your lens to see the depth and breadth of the organization
  Working with department leadership you can observe every department and determine which team (or people) do not have the necessary resources to meet the organization’s objectives.

• Partner with business leaders and HR to begin strategic workforce planning
  Strategic workforce planning sets us up to identify talent needs associated with the organization’s future goals. Therefore, establishing a strategy to ensure the organization has the right mix of talent, skills, competencies, and capabilities for the future.

• Help the business increase productivity
  By identifying teams or individuals who need skills support L&D helps plug the gaps that will make people “smarter, better, faster”. This allows career development support to address skills gaps now, and those that arise in the future. Because of this, the business will see employee retention remain strong as career development goals are being met.

• Help the business stand above the competition
  Working with leadership to carry out a skills gap analysis will allow the business to beat the competition. The competition may be in a rotation of poor hiring, stagnant training, and knee-jerk “performance management”, by helping the business plan for the future they get a jump in long-term recruitment and hiring planning. Being better at hiring and skill support allows for deeper exploration of innovation and creativity.

• Taking a scalpel to training programs
  By having a skills gap plan, you will have at your fingertips a plan to add impact to the business. This means being able to cull the crowd of training programs. The skills gap analysis will help you see where support is needed or where hiring to fill the gap may be necessary. A solid analysis will give you the data to inform better decisions. Where “racing to training solutions” is not the first idea, but the last idea.

Tools to help you.

Since 2020, Michelle Ockers, Laura Overton, and I have been working together on the concept of “Emerging Stronger”. We’ve hosted the Emerging Stronger Masterclasses and have developed a publishing partnership with Go1. Our goal? To give learning and development professionals the opportunity to work through issues and identify better solutions to business challenges.

To this point, we’ve developed a series of tools to help you specifically with the skills gap analysis and determining training impact. Download them to build your analysis toolbox.

To wrap this up: Conduct a skills gap analysis and boost your organization and your business value

For businesses, having a team that’s underqualified or short in skill sets can create frustration among team members, slow down projects, and ultimately impact business goals. With your guiding hand, conducting a skills gap analysis can make your organization stronger and more prepared for the future of work, whatever it may have in store.