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What is Skills Gap – How to identify it

Published on Jul 09,2024 17 Views


“Skills gaps” have grown in importance as a topic related to employee growth and retention in today’s changing job market. The need to pay more attention to the concept of skills gaps has arisen from the widening gap between the skills employers seek and the skills held by job seekers as industries continue to advance and adapt to the economic climate. However, what is a skills gap exactly, and why is it significant? 

What is a Skills Gap? 

A skills gap is the difference between a job seeker’s qualifications and abilities and what an employer requires for a particular role or position. This increases a need for various ways out, such as the need for more individuals possessing the specific technical expertise, soft skills, or industry-specific knowledge needed to perform well in a given role. The core causes of the skills gap are frequently rapid technological advancements, shifting labour market demands, inadequate educational and training systems etc.

Impact on Businesses

Businesses that struggle to fill highly skilled positions experience a knock-on effect that restricts their ability to hire more skilled workers and improve overall performance. Additionally, businesses experience lost revenue and restricted access to opportunities for growth as a result of the skills gap. 70% of corporate leaders report a critical skills gap in their organisation – one that’s having a negative impact on business performance. (Workforce Skills Gap Trends 2024)

Other ways it impacts the business:

Training Costs: The bottom line suffers from a skills gap. In situations where hiring qualified candidates at the right time is not possible or where upskilling current employees is needed but internal training capacity is lacking, employers may be forced to make more expensive initiatives to make up for the shortfall. These initiatives may include investing in outside education or training programmes, which can incur additional costs.

Reduced Efficiency: Compared to workers with skill sets and expertise, those with restricted skill sets and expertise are less likely to be productive. Because of their lower pay tier position, they might not feel the need to go above and beyond basic work demands, or they might need more skills or knowledge to be highly productive. The company may lose money as a result of poorer output, missed deadlines, slow customer service, or delayed task completion.

Insufficient Social Skills: It’s possible that unskilled workers lack the training and experience of their skilled counterparts. This may suggest that they lack interpersonal communication skills, which could have a detrimental effect on internal company communications or customer service. 

Turnover Numbers: Unskilled workers frequently receive lower pay than skilled workers and might require assistance to survive. They might work for your company for a short while before looking for a more lucrative job or leaving to get training so they can get paid more. A company’s morale may suffer and costs associated with recruiting, interviewing, hiring, and onboarding new employees may increase if turnover is high.

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Identifying Skill Shortages

  1. Survey Your Executives: Request information of each team manager in divisions such as sales, IT, and HR about the skills they feel that their employees are missing. They can rate the significance of each skill to their team using a skills gap analysis template.
  2. Conduct Employee Interviews and Performance Evaluations: To ascertain the strengths and weaknesses of their employees, team leaders should interview and evaluate their workers. Following the interviews and reviews, they ought to make a table listing each employee’s name and rank them according to their degree of expertise. They’ll be able to see exactly where some employees are struggling and accordingly give them training in that area.
  3. Educate Present Team Members: Organise training sessions to bring your team members up to speed if you think they can do better. More knowledgeable employees can instruct others; this could happen at weekly or monthly meetings. Investing in e-learning or hiring outside consultants are other options you have for helping your teams develop these competencies.
  4. Adopt an Innovative Hiring Method: You can evaluate candidates’ skills before hiring them to see where they stand. Furthermore, you might want to consider an employee’s willingness to learn in addition to their current skill set when hiring. By approaching hiring with greater detail, you can also draw in qualified applicants. 

Now is a crucial time to address and identify skill gaps in the workplace, whether you are conducting a skills analysis, hiring new candidates, or training existing team members. Organisations are facing significant workforce challenges because of company-wide skills gaps. Recruitment (59%) and retention (53%) are the top two challenges organisations are facing due to a lack of skills (Workforce Skills Gap Trends 2024)

Addressing Skill Shortages 

Businesses who struggle to find qualified candidates for open positions will find their resources overextended, which will negatively impact the company’s prospects in the short and long terms.  Reducing the skills gap requires a strategic and all-encompassing approach due to its complexity. 

  1. Give training and development initiatives top priority: Establishing an organisational culture that values ongoing learning and development is essential to addressing the skills gap. Companies need to invest a lot of money in employee training, making sure that these initiatives are in line with both forecasts for the future and current market trends. 
  2. Foster Strong Partnerships with Academic Institutions: Businesses that establish strong partnerships with educational institutions, including colleges, universities, and vocational schools, can have a significant impact on the workforce of the future. Through these partnerships, companies can influence the development of curricula, improving their alignment with industry standards and expectations. 
  3. Make Use of Technological Advancements: It’s interesting to note that the same thing that causes the skills gap can also work to close it. Automating and artificial intelligence (AI) can handle repetitive tasks, freeing up employees to concentrate on higher-value, more complex work. Adopting cutting-edge technology can also attract tech-savvy employees .
  4. Reexamine Your Hiring Procedures: If there is a significant concern about a skills gap, it may be time to reconsider your hiring procedures. It’s not necessary for new hires to be flawless right away. You could easily hire candidates who meet eighty percent of the requirements and help them develop into the role without doing harm to your company.

Fostering a Culture of Continuous Learning

Creating a continuous learning culture in an organisation is more than just a teaching project; it’s a competitive advantage that fosters creativity and adaptability. This culture not only fosters professional development on an individual basis but also improves the organisation’s general output and effectiveness. Examining how CI can change work environments allows us to understand its significance in a number of industries, with substantial long-term advantages for organisations and workers alike. Here are some of the things you can do are:

Encouraging feedback and instilling an environment of curiosity, Providing diversity and adaptability in your training initiatives and techniques, encouraging teamwork and information exchange among employees, serving as an example and reinforcing learning as a manager and leader, etc. The foremost thing remains is tracking the success of your initiatives to ensure you are on the right way out.


According to recent research, businesses with workforces prepared for the future have a 2.2 times higher chance of outpacing their competitors in revenue growth. (WEF’s 2018 Future of Jobs report)

Future-proofing your workforce has several advantages that will benefit both your business and its employees. Giving your staff the proper resources and attitude will enable them to thrive in the dynamic business world and position your organisation for long-term success. 

Wish to take a leap towards upskilling? Look no further! Edureka’s courses are designed with industry trends and job market demands in mind, ensuring employees learn relevant and in-demand skills. Employee engagement and satisfaction rise when employers support their professional development through investing in upskilling, and this is your chance to achieve it!


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What is Skills Gap – How to identify it