You’ve got a capable team—so why aren’t the results showing? Maybe a product launch didn’t land as expected. Maybe your top performers are overloaded while others are still unsure where they fit. Or maybe you’re watching business goals speed ahead while your workforce lags just a step behind.

You’re not imagining it, and it’s not about motivation or effort. The issue is skills—more specifically, a skills gap. Most organizations don’t realize they have one until it starts to show up in delays, missed opportunities, or talent turnover. And by the time it’s visible, it’s already expensive.

That’s why a skills gap analysis isn’t just an HR task—it’s a business-critical step. And when you’re ready to take action, KnowledgeCity—the best employee training platform in the USA—can make the process seamless.

Done right, it gives you a clear view of where your team stands today, what’s missing, and how to close the gaps in ways that lead to real results.

In this blog, you’ll learn a structured, simple way to identify skill gaps, prioritize what matters most, and make confident decisions—whether you’re training, hiring, or reshaping roles.

Let’s walk through the process step by step.

What Is a Skills Gap Analysis?

A skills gap analysis is a step-by-step process where you identify the difference between the skills your team currently has and the ones your business actually needs. The goal is to pinpoint where employees are underprepared—so you can fix it before it affects your growth, productivity, or bottom line.

When done properly, this analysis becomes a roadmap for smarter training, better hiring decisions, and stronger team performance.

Why You Shouldn’t Skip Skills Gap Analysis

When training budgets are limited and business priorities keep shifting, it’s easy to invest in learning programs that don’t address the real challenges. A skills gap analysis brings focus and direction to your efforts.

It helps you:

It brings clarity—so your people aren’t just busy, but skilled in what actually matters.

Step-by-Step: How to Do a Skills Gap Analysis That Works

To make your skills gap analysis effective, it must be tied directly to what the business actually needs—here’s how to do that, step by step.

Step 1: Start With Your Business Goal

Before you focus on people, start with the business. What are you trying to achieve this year? Launching new products? Improving customer retention? Reducing manual processes? Write down 2–3 top-level priorities. These will guide what skills your team needs—not just for today, but for what’s coming next.

Ask yourself:

What changes or challenges are we preparing for?
What’s holding teams back from performing better now?
What does success look like 6–12 months from now?

This step grounds the analysis in real outcomes, not vague training ideas.

Step 2: Choose the Right Roles to Focus On

Don’t try to analyze every role in the organization at once. Start with those that are most critical to your goals.

For example, if you’re digitizing operations, focus on operations managers, logistics staff, and your IT team. If you’re expanding into new markets, focus on sales and customer success.

Map out what these roles are responsible for today, and what they’ll need to handle in the near future.

Step 3: List the Skills Required for Each Role

Now, get specific. For each selected role, identify the exact skills needed to meet expectations.

Group them into categories like:

Technical skills (e.g., CRM usage, project management tools)
Soft skills (e.g., communication, time management, problem-solving)
Business skills (e.g., negotiation, budgeting, compliance awareness)
Future-oriented skills (e.g., data analysis, AI tools, cross-functional collaboration)

The more clearly you define these, the more useful your analysis will be.

Step 4: Measure the Current Skill Levels

Now comes the core of the analysis—understanding where your people stand today. Use a combination of methods:

Self-assessments: Let employees rate their skills honestly
Manager feedback: Get input on day-to-day performance
Skills tests: For hard skills, use simulations or tasks
Past performance data: Use KPIs or training records if available

This step helps you separate perception from reality—so you can focus on facts, not assumptions.

Step 5: Identify the Actual Gaps

Compare the required skills (Step 3) to the current skills (Step 4). Gaps will typically fall into three types:

Missing skills: Not present at all
Weak skills: Present but not strong enough
Redundant skills: No longer useful for future needs

Rank the gaps by importance. Which ones are stopping progress? Which are nice-to-have? Which are urgent?

This gives you a clear priority list to act on.

Step 6: Choose the Best Way to Close the Gaps

Now, figure out what action makes the most sense.

Upskill: Strengthen existing skills through focused training
Reskill: Train employees new skills for changing roles
Cross-train: Share knowledge across teams
Hire: Bring in external talent where training isn’t practical
Redesign roles: Adjust responsibilities to match strengths

Match the solution to the need. Don’t assume training is always the answer—sometimes coaching, job shadowing, or workflow changes are more effective.

Step 7: Track Progress and Adjust

The most overlooked part of skills gap analysis is what happens next.

You need to:

Set clear success indicators (e.g., faster onboarding, fewer errors, improved sales)
Track participation and completion rates in learning programs
Measure real-world improvement
Reassess skills every 6–12 months as business needs evolve

Without this follow-up, even the best analysis won’t lead to meaningful change.

An Example of Skills Gap Analysis

Common Pitfalls to Avoid During Skills Gap Analysis

Many leaders still underestimate the long-term business risks of skills shortages. If you haven’t already, read our blog – The Hidden Cost of the Skills Gap and How to Avoid It to explore how untrained teams quietly drain your resources—and what to do about it.

Close Skill Gaps Faster With KnowledgeCity

If you’re looking for a partner to help close those skill gaps efficiently, KnowledgeCity is built for exactly that. As one of the best employee training platforms in the USA, KnowledgeCity combines a rich Learning Library with a powerful, easy-to-use LMS (Learning Management System) to deliver results that matter. Our library includes thousands of expert-led courses in business, compliance, safety, and more, designed to help your team build the right skills, faster.

With our LMS, you can assign targeted training based on actual skill needs, track progress in real time, and measure outcomes—all in one place. Whether you’re upskilling current employees, onboarding new team members, or preparing future leaders, KnowledgeCity gives you everything you need to turn your skills gap analysis into real growth.

When you’re ready to take action, KnowledgeCity helps you train smarter, build stronger teams, and align every role with your business goals.

Frequently Asked Questions (FAQs) About the Skills Gap Analysis

What is a skills gap in the workplace?
A skills gap is the difference between the skills employees currently have and the skills needed to perform their jobs effectively. If left unaddressed, it can lead to delays, inefficiencies, and missed opportunities.
Why is skills gap analysis important?
It helps organizations identify where teams are underprepared, align training with business goals, support internal promotions, and reduce unnecessary hiring. Most importantly, it ensures the workforce is equipped for current and future demands.
How often should we conduct a skills gap analysis?
Ideally, every 6 to 12 months—or whenever there are significant changes in business strategy, technology, or market conditions. Regular analysis keeps your training efforts relevant and responsive.
Who should be involved in a skills gap analysis?
HR professionals, department managers, and team leads should collaborate to assess roles and skills accurately. Involving leadership helps align the analysis with strategic goals.
Can a small business benefit from skills gap analysis?
Absolutely. Even small teams face changing demands. A focused skills gap analysis helps prioritize limited training resources and supports faster, more targeted growth.