Unlocking HR Efficiency: Harnessing AI for Skills Gap Analysis

HR technology plays a crucial role in gap analysis by providing HR
professionals with the tools and insights needed to identify areas for
improvement and develop targeted strategies to address them. By leveraging
advanced data analytics and AI-driven algorithms, organizations can bridge the
gap between current practices and desired outcomes, ultimately driving
sustainable growth and success.

As companies experience a rapidly growing need to re-and upskill their people, the skills gap analysis is an increasingly relevant tool. A recent Wiley survey noted a significant uptick in the percentage of HR professionals and hiring managers who say they’re facing a skills gap. It rose from 55% to 69% in the past year.

What is a skills gap analysis?

A skills gap analysis is a tool used to assess the difference (or gap) between a workforce’s current capabilities and what is required to meet the current or future demands of the business strategy. It identifies the skills that employees need but don’t yet have to carry out their job or perform certain tasks effectively (Ovidio,A 2012).

Skills gap examples

Organizations that decide to tackle a skills gap issue can find ways to solve the problem. Here’s a look at a few examples of how companies identified skills gaps and took action to close them:

NASA

The U.S. government’s space research and exploration agency, the National Aeronautics and Space Administration (NASA), relies on data scientists for its operations. Since these professionals are in high demand, they looked internally at what the current workforce had to offer. Employees across the organization had data capabilities, but the wide range of talent had not all been categorized.

NASA was able to build a talent-mapping database that identifies the data skills required for various projects. It helps match employees with the right skill sets to projects requiring those competencies.

Verizon

Communications technology company Verizon has a goal of preparing 500,000 individuals for future roles by 2030. It developed a tech apprenticeship program called Verizon Thrive. The 12-month earn-and-learn program trains high-potential individuals in the important skills Verizon tech roles require.

After completing the apprenticeship, 95% of the first group of apprentices accepted full-time employment offers from Verizon.
Chipotle

Fast casual restaurant chain Chipotle faces the food service industry’s common struggles of high turnover and a lack of employees with management skills. In 2019, it started offering employees a debt-free college degree program that pays 100% of tuition costs upfront.

Chipotle’s employment retention rate is 3.5 times higher among crew members who are enrolled in the program. In addition, employees who take advantage of the benefit are 7.5 times more likely to be promoted to management roles.

AI-driven healthcare startup

Miriam Groom, CEO of Mindful Career and Leader Human Capital at KPMG, shared an example of a skills gap at an AI-driven healthcare startup. While their engineers were adept at developing cutting-edge algorithms, there was a gap in understanding healthcare nuances and patient-centric design,” said Groom.

“This revelation led the company to initiate a cross-functional TechMed collaboration program. Engineers were paired with medical professionals for immersive experiences, leading to a fusion of tech brilliance with empathetic, patient-first solutions. Not only did their product efficacy improve, but the company also reported an uptick in employee satisfaction due to this multidisciplinary learning.”

Why is a skills gap analysis important?

The Future of Jobs Report, the World Economic Forum states that 44% of employees’ essential skills and knowledge will be disrupted over the next five years due to continued automation and AI technologies.
For organizations across all industries, this means that certain jobs will disappear while others’ core tasks and responsibilities will change. This is where job redesign becomes relevant for rearranging these tasks and responsibilities to align them with the changing reality of work.

Before you start redesigning jobs, you need to know what skills and knowledge are currently missing in your workforce. You need to ask yourself, which of those skills are essential for your organization’s performance?

This brings us to why conducting an employee skills gap analysis is important. Here are several reasons:

1. It gives you insights into your entire workforce

You’ll be able to identify which employees have the most desired skills and knowledge of particular aspects of the business, as well as the employees with significant skill gaps.

As such, you can better target employee training and development efforts on those skills that require the most attention. This will lead to the optimal use of resources to improve the overall performance of the team. According to McKinsey research, matching training and development programs with skill needs can decrease costs by 50%.

2. It boosts individual learning and development

A skills gap analysis helps individual employees find out what improvements they’ll have to make to acquire or improve the skills and competencies needed to perform well now and in a future role. In the PwC’s Global Workforce Hopes and Fears Survey, 53% of employees stated that their job requires specialist training.

It will also highlight which employees are making the strongest contribution and deserve raises or promotions. This can also have a positive impact on your employees’ productivity.
3. It helps your strategic workforce planning

Strategic workforce planning is, among other things, about making sure you’ve got the right number of people with the right skills in the right place. It’s difficult to start planning for the future if you don’t know exactly where you currently stand from a skills perspective.

A skills gap analysis shows you which key positions lack core competencies. From there, you can set goals and define benchmarks for getting the workforce where it needs to be.
4. It can improve your recruitment efforts

You have to know what you are looking for in order to find it. It’s much easier to recruit strong candidates if you can identify the ones whose skills best match those needed to function effectively in a particular role.

You can also develop new talent acquisition strategies that will target and attract the types of people you need.

5. It creates a competitive advantage

If you combine all of the above, you’ll be able to create a competitive advantage and stay ahead of your competition. You’ll know the strengths and weaknesses of your workforce. That way, you can better plan for learning and development and recruitment to optimize your organization’s performance.

Skills gap analysis in the modern age isn’t just about identifying missing competencies but also about creating an organizational culture of continuous learning, adaptation, and collaboration.”



Miriam Groom, CEO of Career.M and Leader Human Capital at KPMG

References

Verlinden.N  ,Skill Gap analysis all you need to know Available at https://www.aihr.com/blog/skills-gap-analysis/ (Accessed on 01.04.2024)

Hot to do gap analysis ,https://youtu.be/AGQyaGtrTUc(2017)(Accessed on 01.04.2024)