Skill Gap - Definition, Importance & Example

Published in Human Resources Terms by MBA Skool Team

What is Skill Gap?

Skill Gap is the difference in the skills required on the job and the actual skills possessed by the employees. Skill gap presents an opportunity for the company and the employee to identify the missing skills and try to gain them.

Employees are recruited by companies to work on fulfilling company objectives. Hence, people with the correct skill sets are recruited by companies. However, often it happens that employees lack certain knowledge & training which creates a skill gap. Because of this the employee is unable to perform the complete job. 

Importance of Skill Gap

Skill Gap is very important when it comes realizing the need for improvement or training. Skill gap can be based on the job fit or actual gap in technical or functional skills to complete a job. Once we analyze the skill gap, we can work on the improvement plan to fill this gap.

If this gap is allowed to persist, this would be mean the employee would keep doing the job unequipped with right skills required and would lead to loss in productivity.

If this problem is evident for a large number of employees or department, it can become an issue for the organization.

Skill gap is expected in any employee or organization. It is more of an opportunity analysis to improve and assess the existing workforce and further improve them through coordinated trainings and grooming during through the job tenure.

Skill Gap Analysis

Identifying skill gaps is essential for the companies to ensure that the workforce is well trained, knowledgeable & better equipped to perform the job. This analysis helps achieve the following objectives:

1. Helps one refine and define skills the agency needs, now and in the future

2. Make employees aware about the critical skills they’ll need to grow

3. Helps in recruiting efforts when current employees don’t have the skills or the interest

In terms of banking, an example of a skill gap could be if an employee lacked the ability to cash government bonds.

Skill Gap Solutions

There are several ways in which employee skill gaps can be reduced thereby benefiting the organization. Some solutions are:

1. Better training of employees so that they acquire the required skills to complete a particular task

2. It can be reduced by exposing employees to better resources & help them improve their knowledge

3. Hire a third party which has got the required skill to execute the job

4. Recruitment and selection of better skilled employees can remove the skill gap as a long term perspective

Example of Skill Gap

If a job role requires an employee in technology company to know a programming language and a database and the employee knows only one language. This means there is a gap in skills. The employee can improve this by learning the missing skill.

Hence, this concludes the definition of Skill Gap along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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