Diagnosing the Talent Gap: What is it (and How Can HR Solve it)?


HR Insights for ProfessionalsThe latest thought leadership for HR pros

Wednesday, August 10, 2022

If you’re facing a talent shortage, check out this guide to understand how to diagnose and identify solutions in your business.

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Diagnosing the Talent Gap: What is it (and How Can HR Solve it)?
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The skills crisis has steadily been worsening over the last decade, largely due to digitization and the technological boom we’ve experienced across the globe. However, recent events, such as the COVID-19 pandemic, have also accelerated this widening skills gap.

Couple this with automation and the fact that technologies and business models are always evolving, and it’s easy to see why the demand for new skills far outweighs the number of qualified candidates.

This is causing problems for both businesses and their workforce. In fact, a global survey from McKinsey has found that nearly 90% of organizations say they’re already facing a skills gap, and those that aren’t expect to see this develop within five years.

Not only this, but an estimated 375 million workers globally might have to change jobs over the next decade in order to meet organizational demands. 

This shows that not only are businesses struggling to find skilled professionals, but professionals might potentially lose their jobs, have to retrain or start from scratch in a new industry.

Clearly, the global talent shortage is a very real challenge that organizations are facing right now. But it’s not all doom and gloom: being able to diagnose talent shortages and put effective measures in place to address the problem is the key to bridging the gap.

Read on to find out more about diagnosing and addressing skills gaps in your business.

What is a talent gap?

In recent years, ‘skills gap,’ ‘talent gap’ or ‘talent shortage’, as it’s also known, have become industry buzzwords. But what does the skills gap actually mean?

Put simply, a skills gap is when the current workforce doesn’t have the correct skill set required to do their jobs effectively or to help the business reach its goals, and are in need of further development or training.

Diagnosing the talent gap: How does it happen?

We’ve briefly addressed some of the main causes of the global talent gap, but let’s look in more detail at the specific reasons why these gaps might form within a company. In many places, the skills gap continues to widen because of: 

  • Automation: More jobs are becoming automated or obsolete, making room for newer positions. This might seem great, but newer positions call for new skill sets that many professionals don’t have
  • New technologies: It’s not just automation; all kinds of new technologies emerge every day, often requiring skills that professionals don’t currently possess
  • Lack of soft skills: Although the younger generation may be more technically savvy, plenty still lack the basic communication and soft skills that companies need
  • Not enough skilled graduates: Lots of in-demand jobs aren’t getting a big enough supply of skilled graduates. For example, the number of people taking nursing degrees dropped by over 10% last year
  • Poor recruitment processes: Relying on automated or weak recruitment processes means that many employers fill job descriptions with a list of ideal requirements that most applicants won’t meet. This results in low match rates, fewer candidates or hiring the wrong people
  • Lack of training: Too many businesses fail to offer the right training or any at all. In fact, 59% of employees claim that they’ve had no workplace training and that most of their skills are self-taught
  • Inadequate compensation: Unfortunately, lots of organizations don’t offer competitive enough salaries for highly skilled and in-demand jobs

Why dealing with talent gaps is important

If left unaddressed, the skills gap can cause issues for an organization. It can stop your business from meeting customer demands, delay development and increase costs. You might also see a drop in the quality of your goods or services, giving your competitors an advantage.

This is why dealing with talent gaps in your business is vital. By tackling the issue head-on, you’ll gain valuable insights into your workforce, which can help with strategic workforce planning. You’ll also be able to improve your recruitment efforts, find and hire talented workers and train existing employees to be the best they possibly can be.

All of this can lead to an increase in innovation and employee satisfaction rates, and can give your business a competitive edge.

What is skills gap analysis?

One way to tackle talent shortages is to use skills gap analysis. This is a technique often used by the HR department to assess the gap between the skills they need their employees to have and those that their existing workforce already possess.

7 ways HR can close the talent gap

Though closing the skills gap may require some larger organizational changes, the HR department is the best place to start. Here are some of the best techniques you can use to close the talent gap:

1. Assessing the problem

First and foremost, HR must assess the situation and highlight any problem areas that they need to tackle first. This will help them to get the most effective plan in place for closing the skills gap.

A large part of this can be done during a skills gap analysis, and once this has revealed the organization’s weakest areas, HR teams can begin to dig a little deeper to assess what’s really going on. They can then take some, or perhaps even all, of the following steps.

2. Looking internally

Another important step that HR teams can take is to seek out new talent from within the organization. What we mean by this is redeploying workers internally for roles that they may be better suited to, particularly those that you’re struggling to recruit for.

3. Creating strong training processes

As we’ve demonstrated, hiring someone new isn’t always the answer. Through training, existing employees can upskill or gain an entirely new set of skills that allows them to take on additional responsibilities or move into other roles. 

Yet despite this, only a third (34%) of workers feel supported by their organization’s skill development opportunities. HR teams must work hard to reskill and upskill existing employees, whenever appropriate, by getting strong training programs in place.

4. Rethinking the recruitment strategy

For organizations with sizeable skills gaps, it might be time to rework the entire hiring process. HR professionals can assess the current systems to see if these are preventing employees with the right skills from getting hired, or if managers are looking for the wrong competencies altogether.

This might mean tasks such as re-writing job descriptions, not relying on automated tools like Applicant Tracking Systems (ATS) or changing up the interview process.

5. Finding different sources of talent

HR teams need to move away from tired talent pools. This means they should stop relying solely on generic job boards and look elsewhere for skilled workers. This is particularly true when looking for a specific skill or competency.

Other great sources of talent that HR professionals could tap into might include referral schemes, social media, networking events and industry-specific job boards.

6. Creating a mentoring program

Training isn’t the only way to improve an employee’s skills. Mentoring programs can be another great way to help them learn, develop and upskill.

Getting a strong mentoring program in place means that more qualified professionals can share their knowledge and skills with less qualified team members.

Plus, a mentoring program keeps learning consistent and can boost employee morale and strengthen the company culture.

7. Implementing the right tools across the business

From training to recruiting, there are multiple ways that technology is involved in helping to bridge the skills gap.

As such, HR teams need to make sure they have the right tools in place to help them with their endeavors. For example, they need to ensure the best and most relevant platforms for training, skills gaps analysis, video conferencing and other recruitment tools.

4 benefits of analyzing and addressing your skills gap

Companies that are able to recognize, analyze and address the skills gap will reap the rewards. There’s a whole range of benefits to be had from taking a proactive stance and getting systems in place to bridge the talent gap.

1. Creating a competent workforce

Firstly, as part of addressing the skills gap, many organizations will offer additional training to their employees. This helps to guarantee a well-trained and informed workforce who are more capable of doing their jobs. Not only this, but the business will enhance its employee’s talents and skills in accordance with the company’s larger needs and goals.

2. Boosting your recruitment efforts

Addressing issues within the recruitment process in order to find more talented individuals can help you to find the right candidates. This can lead to candidates who are better suited to the role and higher staff retention rates.

3. Planning for success

By analyzing the skills gap, businesses get a clearer picture of their organization as a whole. This enables strategic workforce planning that helps HR to identify talent for the organization’s future goals and better prepare for these.

4. Increasing employee happiness

Did you know that 41% of workers say career advancement opportunities are important to their job satisfaction? A further 76% of millennials believe that professional development is one of the most important aspects of a company’s culture.

It’s easy to see that workers want opportunities to grow, and by addressing your employee’s desires for professional and career development, you can increase employee engagement and productivity.

How companies are addressing the skills gap

There are plenty of companies out there that are already doing their best to close the skills gaps. To inspire you further, here are a few examples.


During the COVID-19 pandemic, when online orders reached an all-time high, Tesco developed innovative ways to train their workforce to manage the uptake in online orders.

In just one month, they reskilled 45,000 furloughed workers to process online orders and hired 16,000 of those who were trained to work full-time. The training program expanded Tesco’s hiring pool and helped workers to develop new skills.


Another skills gap example is Siemens. When the industrial giant couldn’t find enough skilled workers to take on the jobs it needed, the team decided to launch a program to build the workforce it wanted.

This came in the form of a highly structured apprenticeship scheme and paid people to learn new skills at a local college. They were then moved to full-time jobs at the factory once they had qualified.


In order to create a well-rounded workforce, Abbott trains new hires in every central area of their business. They also started a graduate program that gave recent grads the opportunity to work in six different departments over two to three years.

This gives all employees a deeper understanding of what happens across the business as a whole, providing them with new skill sets and teaching them to collaborate effectively.

How technology is helping to close the skills gap

Technology plays a pivotal role in helping to bridge the skills gap. Its role can be as simple as online platforms that help to train employees, and it can be as complex as using data to predict the future talent needs of the business.

What’s more, data collection and analysis tools make it possible to assess the current state of your workforce, and then you have technology such as artificial intelligence (AI), which helps with training and creating personalized learning journeys that get better results.

There’s a lot of technology out there that can help with bridging this skills gap, and organizations need to find the tools that are right for them.

Final thoughts

Whether your business is already being affected by the skills gap or you predict that this will be a problem in the future, now’s the time to act. Being able to analyze the skills gap or potential areas where you might struggle in the future will be the key to taking a proactive approach.

There are multiple ways that HR can help to bridge the talent gap and so many reasons why they should. From training and recruitment to mentorship programs and development opportunities, don’t wait until it’s too late.

Using the tips and advice above, start addressing the talent gap in your organization right away. This will give you the best chance of creating a skilled and productive workforce that will drive your business forward.

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