How to perform HR Gap Analysis by using the 7-step process
Every organization competes on the basis of its core competencies and capabilities. Talent, know-how, skills, expertise and best practices provide the required capabilities for achieving a sustainable competitive advantage.
HR Objectives
One of the main HR objectives is to nurture and continuously develop these unique and competitive competencies. It is a continuous process and strategy because of the ongoing changes in the business environment. Technology changes, markets change… and so does the organizational strategy in order to adjust to those changes and retain its competitive position. Skills which are relevant today might not be a differentiator in the next few years.
What is HR Gap Analysis?
As a result, performing periodic HR gap analysis allows decision makers to evaluate the current competencies and capabilities and compare them with the relevant external forces as well as the organizational goals and objectives.
The purpose of HR gap analysis is to identify any current or potential future gaps between the required level of expertise and the existing capabilities within the organization. Performing gap analysis opens up new opportunities for the organizations to improve their existing performance and sustain their growth and organizational development.
HR Tools for Gap Analysis
One of the frequently used tools is the SWOT analysis – for more details read the article on HR SWOT Analysis. The SWOT analysis helps HR professionals and managers evaluate the relevant internal (strengths and weaknesses) and external (opportunities and threats) factors.
HR Strategy Development
Once the gaps are identified generally there are more than one alternative ways to close the gap. This is where strategies and tactics need to be developed in order to come up with the most effective and efficient alternatives.
For example, gap in certain skills can be closed in the following ways:
– the organization can hire new employees
– the organization can hire external help by using consultants and freelancers
– the company can develop the skills internally by providing the required training and employee development
– the company can outsource the certain skill or function to external vendors which specialize in the required capabilities
– the company can acquire another company to get immediate access to the relevant skills
– the organization can utilize a combination of more than one strategy depending on the risks, timing, productivity and whether the required skills are critical competence for the business…
The 7-step HR Gap Process
Conducting an effective HR gap analysis is a process of strategic importance and involves the following 7 major steps:
1. Review of the current organizational goals and objectives
2. Evaluate the internal capabilities
3. Identify the existing gaps
4. Evaluate the external factors (competitors and general business environment)
5. Identify alternative courses of actions to close the gaps
6. Develop effective strategy and action plan for implementation
7. Continuously evaluate and adjust based on the organizational objectives, capabilities and external forces.