Learn how to define future requirements, evaluate current employee capabilities, and prioritise critical skill shortages across your organisation.
Patrick Evenden
Head of Thought Leadership, EMEA
Workday
For decades, organisations have managed talent through job titles, organisational charts and headcount. While those structures still serve an important purpose, they don’t provide enough visibility into the capabilities that actually exist across the workforce.
As business needs evolve, it’s increasingly skills – not job titles – that determine whether or not organisations can execute their strategy.
A skills gap analysis shifts the focus from who sits where on the org chart to who can do what. It creates a clear picture of the skills your workforce has today and compares them against the capabilities your organisation will need in the future. That visibility helps leaders identify where critical skills are missing, where existing talent can be developed or redeployed, and where external hiring may be necessary.
Organisations are increasingly recognising the value of this approach. More than half have already begun transitioning to a skills-based strategy, with another 23% planning to do so within the next year. Leaders cite improved productivity, greater innovation, increased organisational agility and stronger internal mobility among the biggest drivers behind the shift.
More than half of organisations are transitioning to skills-based strategies, and another 23% plan to do so within the next year.
A skills gap analysis is an ongoing process for understanding how well your organisation’s skills align with its business strategy. These six steps below provide a practical framework for identifying skills gaps, prioritising action and building a workforce that’s prepared for the future:
1. Define the business outcomes you’re supporting
2. Identify the skills your organisation will need
3. Audit Current Workforce Skills
4. Identify and prioritise skills gaps
A successful skill gap analysis starts with your business strategy – not your job architecture. Before identifying desired skills, clarify what your organisation is trying to achieve over the next 12 to 36 months. Whether the priority is expanding into a new market, adopting AI, launching new products or improving customer experience, those initiatives should determine which skills matter most.
Work with business leaders to define the outcomes you’re supporting, the functions or teams most critical to those priorities, and the measures that will define success. Starting with business objectives ensures your analysis is focused on the capabilities that will have the greatest impact rather than attempting to assess every skill across the organisation at once.
Once you’ve established your business priorities, identify the skills employees will need to achieve them. Look beyond today’s job descriptions and open positions to consider how work is evolving over the coming years. Each individual employee’s job requirements should be based on the business goals of tomorrow.
Partner with business leaders, HR teams and subject matter experts to define the technical, behavioural, leadership and digital skills that will be most important for future success. Prioritise the capabilities that are essential to your strategy instead of building an exhaustive skills inventory. A focused skills framework is easier to maintain, assess consistently and translate into meaningful talent decisions.
With future skill requirements defined, the next step is understanding the existing skills and capabilities your workforce has today. This is often the most difficult part of a skills gap analysis because skills data is frequently scattered across learning systems, performance reviews, CVs and manager knowledge.
Build a comprehensive picture by combining multiple sources of information, including employee self-assessments, manager evaluations, certifications, completed learning, project experience, career history and other validated skills data. Using consistent proficiency levels and standardised skill definitions helps ensure assessments are accurate and comparable across teams.
The more complete and current your skills data is, the more confidence leaders can have in the decisions that follow. That way you can identify the right way to close skills gaps and empower employee training and development programmes.
Once you have a clear view of current and future capabilities, compare them to identify where the most significant gaps exist. Analyse your workforce by role, team, function, geography or business unit to understand where critical skills are missing, concentrated or at risk.
Not every skills gap requires immediate action. Prioritise a team’s skill gaps based on their potential impact on strategic initiatives, the urgency of the business need, and the difficulty of acquiring or developing the capability. This allows leaders to focus investments where they’ll deliver the greatest business value.
The purpose of performing a skills gap analysis isn’t simply to identify missing capabilities – it’s to decide what to do about them. Use your findings to determine where it’s most effective to build skills internally through learning and development, hire external talent, redeploy employees through internal mobility, or supplement capabilities through temporary talent.
When hiring, learning, workforce planning, succession planning and internal mobility all draw from the same skills data, talent decisions become more coordinated, strategic and responsive to changing business needs.
A skills gap analysis shouldn’t be treated as an annual exercise. Business priorities evolve, employees develop new capabilities, and emerging technologies continually reshape the skills organisations need. For companies to stay on top of this fast-moving cycle, skills gap analyses should be conducted continuously.
Establish a regular process for refreshing skills data, updating your skills framework and monitoring progress over time. Share insights with business leaders so skills become an ongoing part of workforce planning rather than a point-in-time assessment. By maintaining an accurate view of workforce capabilities, organisations can adapt more quickly to change and make better talent decisions long after the initial analysis is complete.
A skills gap analysis provides the visibility to close today’s capability gaps while building a stronger foundation for long-term workforce planning.
At the end of the day, a skills gap analysis isn’t an HR chore – it’s a business survival kit. As technology, market conditions and business priorities continue to evolve, organisations need a clear understanding of the skills they have today and the capabilities they’ll need tomorrow.
By grounding your analysis in business strategy, building a reliable view of workforce skills, and translating insights into targeted talent actions, you can make more informed decisions about hiring, learning, internal mobility and workforce planning. Over time, those decisions help create a workforce that’s more agile, resilient and prepared for change.
The future belongs to the organisations that anticipate change rather than react to it. A skills gap analysis provides the visibility to close today’s capability gaps while building a stronger foundation for long-term workforce planning and sustainable business growth.
Is your approach to strategic workforce planning reactive, not proactive? Download this whitepaper from Workday and KPMG to learn how you can gain agility by unifying HR and finance data.
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