Why You Need to Bridge Your Workforce Skills Gap (and How to Do It)

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Sep 11, 2015

People love to talk about “the skills gap” on a macro level. That’s because (1) it’s scary, and (2) it’s a perfect red herring for internal HR deficiencies.

According to a 2013 study by PwC, 58 percent of global CEOs fear this alleged gap in workforce talent could hinder their company’s ability to grow.

Some blame a generational shift: 10,000 baby boomers will turn 65 every day until 2030, retiring and taking valuable skills and life experience out of the workplace. Others blame the recent recession and still lingering unemployment rates.

Regardless of whether or not you ascribe to the idea of an economy-wide skills gap, you’ve probably seen clear examples of skills gaps in your own company. You face business challenges that require specific technical or vocational skills, even soft skills, but your employees fall short. defines skills gap as “the difference between skills needed for a job versus skills possessed by a worker.” This definition makes the skills gap a lot easier to conceptualize, but what can you do about it?

Some HR managers believe the answer is to simply hire outside talent. While this seems like an obvious choice, it assumes you have the budget to bring on a new hire, and it overlooks opportunities that may already exist in your workforce.

Before you employ outside workers for their competencies, you should try to cultivate new competencies from within. In other words, work with what you’ve got; invest in current employees who you trust and are already committed.

Skills gap analysis

The first step is to conduct a skills gap analysis, which is basically an inventory of skills you need versus skills you already have. It’s simple math:

Skills needed – skills possessed = skills gap

One of the easiest ways to conduct a skills inventory is through your existing HR system, i.e., employees fill out an online profile detailing their credentials, certifications, and competencies. This profile serves as a baseline for training/learning goals and future performance evaluations. You can also use employee surveys, interviews, group discussions, tests, and other methods to inventory skills.

According to the Society for Human Resource Management (SHRM), only about a third of organizations have conducted a “strategic workforce planning assessment” to identify potential skills gaps over the next 5 years. So by simply running an assessment, you put your business ahead of the curve.

Taking action

Now that you’ve clearly defined your skills gaps, you need to develop a plan for closing those gaps. How will you identify specific development opportunities? How will you equip employees to grow? How will you track and incentivize progress?

Typically, the most effective approaches are not localized, but rather span the HR continuum, from recruiting to succession planning.

Here are some of the best ways to get started:

1. Mentoring and apprenticeships

A whopping 89 percent of executives think apprenticeships could help close the skills gap, and yet the number of apprenticeships in the U.S. has steadily decreased for decades. In the 21st century, they’ve become an anachronism.

Don’t underestimate the value of one-on-one relationships for employee development. You might consider a track-based apprenticeship program for certain middle-skills roles, which is a great way to improve knowledge continuity. Or you might try assigning mentors to lower-level employees, which helps them grow by learning from experienced co-workers.

2. Learning management systems

A learning management system (LMS) is a software tool designed to track employees’ skills, competencies, education, and training against defined milestones and goals. An LMS can also serve as a platform for various training and development programs, including e-learning, webinars, conferences, certifications, classes, and so on.

Using an LMS allows you to scale employee development. Instead of coaching one worker at a time through manual methods, you can use an LMS to execute and track a larger strategy that targets skills gaps across the entire organization.

The effectiveness of these tools has made LMS one of the fastest growing segments of HR software. As more and more learning management system vendors join the market, it’s predicted the LMS market will grow from $4 billion in 2015 to $11.3 billion in 2020.

3. Performance management/succession planning

One of the best ways to close skills gaps is to integrate your learning and training milestones with the performance management and succession planning process. Once you’ve decided where each employee should be developing, use performance reviews as a platform to discuss progress, and your HR software (or LMS) to track and analyze.

When a leadership position opens, you can quickly identify which employees have the necessary skills and training.
Companies that use performance reviews to assign learning objectives see 38 higher employee engagement and 61 percent more positions with a “ready and willing successor identified.”

One last thing

Your skills development strategy should also inform the hiring process: If you want highly-trained professionals who can hit the ground running, offer competitive pay; if you can’t offer competitive pay, be willing to hire for potential and offer training programs that add value to your workforce.

The answer to your skills gap problem isn’t some larger socio-economic theory, or to start hiring people like they’re going out of style. It’s a set of concrete steps you can take within your current workforce: Define your needs, inventory your skills, and create a plan for helping each employee reach their full potential.

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