How’s your business doing today? Where do you want to take it tomorrow? And what do you need to get there? These aren’t just existential musings for another day. These are concrete questions business leaders continually have to ask. And HR leaders play a key role in providing the answers.
Your organization’s workforce is central to business success — not just by recruiting and hiring the right people but also by investing in professional development to ensure all employees have the skills that are in demand or can reach their potential.
This is the essential function and purpose of an HR gap analysis:
analyze current roles and skill sets
identify where any gaps exist
determine the future roles and skills that are needed to meet the changing needs of the business.
Here’s a closer look at the importance of conducting an HR gap analysis and how taking a position management approach makes it easier.
The importance of an HR gap analysis
An HR gap analysis is a critical exercise that gives you the information you need to help your company grow and expand, make necessary adjustments along the way, and stay competitive. Without this analysis, you can’t get a complete and transparent picture of your workforce and how it fits into larger strategies and initiatives. As a result, you could over- or under-budget for employee costs, inadvertently stunt productivity when you need to increase it, and fail to respond effectively to internal or external disruptions.
If the goal is growth, for example, gap analysis can show you if or when additional headcount may be needed so you can plan ahead. It also identifies if current employees have useful skills that can be tapped or if they should be promoted into management roles. And you can determine how best to handle employee attrition and replacement, including retirement and turnover, without losing ground.
Gap analysis is also useful when going through an acquisition process. As your organization blends with another’s, you can know with greater certainty what the tactical and financial value of your workforce is, and whether you need to trim your team or reorganize it to justify employee expenses.
It’s also an excellent tool for developing or evolving a recruitment strategy. If change is on the horizon, such as entry into a new market or creation of a new team, you know where to direct your efforts to find and hire people with the skills and experience needed to navigate the change, or if hiring internally makes more sense. And you can stay aligned to the budget by ensuring each new role or skill is absolutely necessary and not a wasted investment.
Instead of reacting in the moment to a sudden need, change, or crisis, you can proactively and responsibly make personnel decisions based on the analysis you’ve already done.
Challenges when performing gap analysis
Performing an HR gap analysis well can be tricky. That’s because it’s largely dependent on the amount and quality of workforce data available to you. But some organizations don’t have the in-house tools or resources to gather the data, let alone make sense of it, and this can create some hurdles.
One hurdle is lack of visibility. Many people management tools that still rely on person-based architecture don’t offer a way to store or update position information. Every time an employee leaves the organization, any data around their position also leaves with them — including salary, reporting structure, and key skills and responsibilities — creating new visibility gaps that have to be backfilled manually. When hiring to replace the employee, HR teams often have to start over and re-create information about the role or position from scratch. In doing so, they miss opportunities to rethink or update the position’s requirements to more closely align with new business demands.
Another hurdle involves training and professional development. Without clear position data, it’s impossible to know who needs what training and which professional development programs would be most beneficial. You can’t design appropriate training or development pathways if you can’t see or don’t understand your current workforce and their needs, making it that much harder to retain good employees.
To overcome these challenges, it’s imperative that your organization has the right mechanisms in place to collect and manage critical workforce information.
How position management makes gap analysis easier
Position management gives you the depth and breadth of insight into your current workforce — specifically, at the position level — to optimize gap analysis so leaders can make decisions that align with business goals and budgets.
Let’s say a person leaves your organization. With a position management tool, the data about their former role remains intact. Position by position, managers and executives get the accurate, real-time information they need to understand the current state of the organization.
Using the data in the form of a dynamic organizational chart, for example, users can plan for what-if scenarios and compare them to the current makeup of the organization, helping them map potential growth or retraction areas to see what kinds of roles may be needed, eliminated, or evolved down the road. The same data can also be used to adjust budgets to account for new hires.
Finally, with broad visibility into currently filled and open positions, users can determine where more training is required to close skills gaps and create a flourishing, competitive workforce. And they can uncover development opportunities for existing employees that not only support the career paths of individuals but also set up the organization as a whole to meet long-term goals.
Make smarter decisions about your workforce
The business world is always changing, and your workforce has to keep up. Whether you need to upskill your entire staff or hire special talent to fill specific roles, the current and future decisions you make about your workforce matter to the overall success of your organization.
Position management tools enable and support HR gap analysis by providing detailed, position-specific data to know where your business is and where it’s going. With the information, you can then proactively organize, hire, and develop personnel appropriately.
To learn more about how position management can help you gain much-needed insight into your personnel needs, download the white paper.