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Analyzing the talent gap – the key to workforce planning

Mar 26, 2021


  • EDITORIAL TEAM Talent Management Institute
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There is a talent gap in the job market – and it is a serious one!

  • 70 percent of actively-hiring employers report a skill shortage
  • 43 percent of employers say applicant numbers are sufficient but their skills are not

What are the top skills sought by employers?

Technical or core skills are not all that employees must have in the present day. The employer of today wants a mix of different skill types:

Identifying the talent gap is critical!

With a variety of skills required now and in the future, more and more companies need to upskill and reskill their workforces. And to plan this successfully, they must conduct a talent gap analysis and suitably address the skill shortage.

Unfortunately, despite being a critical tool to understand how much hiring an organization requires, talent gap analysis is not implemented in a structured way at many organizations. This is an unwise choice, as a proper approach helps to sustainably and strategically map the talent needs over the short and long term.

It is time to do a talent gap analysis!

As the name suggests, a talent gap analysis – a.k.a. a skill gap analysis – identifies present and projected organizational requirements for hiring and training. The process unearths the gap between present and preferred competencies and skills. And knowing this gap is essential to ultimately attaining the strategic goals of the organization as well as boosting the commitment, competence, and creativity of the workforce.

According to the World Economic Forum (WEF), at least 54 percent of workers will require upskilling or reskilling by 2022. The prime driver of this change is the rapid onset of digitalization and other technological forces into our work and personal spheres. Below is a projection of the skill shift from 2002 to 2016 and further to 2030:

Is this analysis helpful?

Definitely. For instance, when a company has several new projects coming in, a talent gap analysis could pinpoint the lack of sufficiently skilled people in certain departments – design, sales, or other. Knowing this before the projects actually come in allows the company to plan its hiring such that it has the requisite talent in place in time for work to start.

The benefits include:

  • Optimal long-term recruitment to not let any gaps remain unfilled
  • Strategic workforce planning in line with company objectives
  • Top-down organizational overview for skill analysis of all departments and individuals
  • Higher productivity from better skills through improved learning and development
  • Beating competition with a more complete skillset and quicker innovation

There are two methods to do this: the qualitative, and the quantitative. Let us delve deeper!

How do you conduct a qualitative talent gap analysis?

Essentially based on the process of organizational development, a qualitative talent gap analysis has the following steps:

What about a quantitative talent gap analysis?

This approach looks at every subject and the gap in the associated competency (for more details, read Scientific Research The focus is on situations where the competencies are lower than what is needed, also accounting for often-used and rarely-used competencies. And depending on how big or small the gap is, companies can bring in training programs or conduct self-training activities, respectively.

The process starts with mapping skills required for each job profile and creating a benchmark for each required competence. The pluses are:

  • Constant process with top-down or bottom-up view
  • Quantitative estimates of skill gaps basis frequency and importance of usage
  • Training courses planned through a flexible, semiautomatic process

Below is a look at the measures taken by organizations in different regions seeking to address talent gaps:

Analysis done… now what?

Once the talent gaps have been identified, the way ahead is to plan the requisite recruitment and training initiatives i.e. sourcing the skills externally or upgrading those within the organization. The analysis is a pointer to where gaps lie, and organizations must take a long-term view to address these gaps. For instance, if a particular department or employee is short of the skills required, proper coaching or external talent could bring in the requisite competencies for that department or employee.

There are some key things to consider!

Looking ahead in 2021 and beyond, here is what a talent gap analysis must be based on:

  • Expertise is critical, and must drive culture. Do not just develop skills but proactively adapt and adopt them.
  • Develop a deep understanding of the workforce and its needs and wants for talent, basis economic, political, and sociological trends.
  • Facilitate internal mobility for higher employee engagement and an improved employee experience.
  • Drive agility, curiosity, and learning with AI for smaller, less daunting, and more engaging learning modules including gamification and encouraging collaboration.
  • Welcome new ways of work and diverse ideas and perspectives.
  • Focus on continuous improvement over the long term.

To sum it up…

From smarter candidate assessments to better training modules, the upsides of proper talent gap analysis are many. Not a one-time activity, this must be ongoing and proactive, with the aim to develop and grow adaptability, agility, and learning across the workforce.

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