Top 6 Steps to Conduct a Talent Gap Analysis

As the reskilling and upskilling needs in their workforce increase for a rising number of organizations, talent gap analysis stands out as one of the most relevant tools for the HR team today.

A study by McKinsey & Company has shown that an astounding 87% of organizations are already experiencing or will soon experience skills gaps with their workforce.

This is where Talent Gap Analysis comes in.

The talent gap analysis is the process of determining the current and the projected human resource skills or talent needs in the organization. Put simply, it is the difference between the skills an employee has and the skills necessary for that specific employee’s job functions.

This will also ensure that the skills gaps are properly addressed, and the organizations shall be able to build a more effective workforce that aligns with the various organizational objectives.

Scroll down to understand this process better and note the important steps that might go into conducting the talent gap analysis for 2024.

Understanding Talent Gap Analysis

A talent gap in an organization occurs when the proficient workforce is incapable of having the skills to perform essential tasks to deliver set organizational targets.

As new technologies emerge, employees are expected to up their game and develop advanced skills to stay ahead. If there is negligence in this area, the chances of existing talent gaps become wider, affecting the capacity of employees to carry out the goals of the company.

The process of talent gap analysis involves skill gap analysis tools and a comprehensive assessment of an organization's existing skills inventory. This is followed by a thorough comparison with the expected skill set necessary to achieve respective business goals.

Why is Talent Gap Analysis Important?

A recent study suggests that about 44% of organizations expect their employees’ skills to be disrupted in the next five years. This makes it important to conduct a talent gap analysis and close the identified gaps immediately to ensure the continued growth of an organization as a whole and the employees too.

Here's how Talent Gap Analysis can transform the workforce:

1. Deeper Insights into the Workforce

Talent gap analysis offers better insights into which employees have the required skills and knowledge and which have a significant skills gap. This data can help identify specific employees who need to be trained on specific skill sets. 

2. Better Workforce Planning and Management

Efficient workforce planning requires mapping the right people with the right skills and roles. This requires a clear idea of the current status of employees, their positions, and their core competencies.

In this respect, skill gap analysis tools can be beneficial. It helps detect which job roles lack the required skill sets, making it possible to set respective goals to fill these gaps.

3. Improved Employee Engagement

By investing in talent gap analysis, organizations demonstrate a deeper commitment to their workforce, thus encouraging higher levels of employee engagement and retention.

Likewise, it also helps in succession planning by evaluating the skill sets of potential candidates against the required competencies, ensuring seamless leadership transitions.

Top 6 Steps to Conduct a Talent Gap Analysis

Here is a stepwise procedure for conducting a talent gap analysis:

Step 1: Identify and Define Organizational Goals

The first step is establishing an organization's long-term goals and strategic objectives.

For instance, if the business goal is to automate a set of manual, time-consuming processes, start analyzing the skill gap by determining the respective requirements to achieve this goal.

Step 2: Define Assessments to Assess Employees

In the next step, organizations need to evaluate employees to get a detailed view of their competencies and skills.

Evaluation can be done based on:

• Performance Reviews: Managers review the performance of their employees in specific areas, such as projects handled, deadlines met, etc., based on defined KPIs (key performance indicators). This process of performance appraisals reflects how an employee is doing and improving over the year.
• 360-Degree Feedback: This type of feedback is where information about employee performance is gathered from peers, direct reports, and managers and in some instances from customers. 360-degree feedback gives a holistic view of an employee's competencies and capabilities.
• An Assessment of Skills: An assessment of skills provides an alternative view of the proficiency of an employee. Such tests measure various to determine the competency level and employable capability of employees with both hard and soft skills.

Step 3: Determine Critical Skills 

The next step is determining the critical skills necessary for a talent gap analysis. One of the best solutions here is iMocha's taxonomy, a talent management platform that helps in managing skills data and structuring roles effectively.

It offers a common framework for managing the skills requirements of an organization, and can help with:

• AI-Powered Skills Intelligence: iMocha's taxonomy helps organizations understand their workforce's critical skills and accordingly anticipate future talent needs.
• Candidate Benchmarking: It helps with candidate benchmarking by creating individual job profiles for each requisition.
• Operational Efficiency: iMocha's taxonomy helps organizations optimize business decisions and make the best use of their human capital. 

Step 4: Analyze Data Thoroughly to Identify Various Skills Gaps

This is the stage where the organization should gather every possible data about the talent and skills of employees. Then they need to analyze this data thoroughly and identify skills gaps (if any) on individual as well as organizational levels.

Once done, it is essential to compare the existing skills with those required to achieve respective business goals.

Step 5: Develop a Talent Development Strategy

Identifying talent gaps should be followed by developing talent improvement strategies or action plans to address them. 

These include leveraging AI-powered Skills Intelligence Cloud, such as iMocha, which enables strategic budget allocation using advanced analytics to assess the impact and align programs according to immediate needs for significant returns on investment.

It is also important to communicate these plans to the workforce clearly so that they understand and participate in it actively.

Step 6: Measure and Monitor the Results

The importance of regularly visiting, measuring, and monitoring a talent gap analysis process is immense. This can help organizations stay updated and support business growth goals and objectives.

One important factor to consider here is keeping all stakeholders informed while reviewing or measuring the results so that everyone remains on the same page.  

iMocha Talent Gap Analysis Process 

Talent or skills gap analysis is important for any organization looking to cultivate and prepare a future-ready workforce. 

By leveraging top skills gap analysis tools such as iMocha's AI-powered Skills Intelligence Cloud, an organization gains invaluable insights into talent capabilities. It aligns the workforce strategies with respective business objectives. This promotes a culture of continuous learning and development.

Conclusion

Today, organizations must invest in and focus on various ways to reduce talent gaps, as this is integral to aligning their employees with respective business goals and strategies. 

If you are looking to conduct a talent gap analysis for your organization, consider iMocha. It offers various tools for upskilling, reskilling, and other activities to help you bridge the skills gaps in your organization and gain a competitive advantage in the market.

FAQs

What are talent gaps?

Talent gaps describe the disconnect between an employee's actual skill set and the set of talents needed for a given position. These talent gaps can prevent employees from doing a task satisfactorily.

What metrics should I track during talent gap analysis?

The top metrics to track during talent gap analysis include performance evaluations, recruitment data, employee surveys, and training records. 

How to bridge the talent and skills gap with iMocha?

iMocha's AI-powered Skills Intelligence Cloud helps bridge talent and skills gaps in different ways. This includes skills gap analysis, skills benchmarking, skills inventory, skills matching, and more.