How to conduct a skills gap analysis for your team

A skills gap analysis is a structured comparison between the skills your organisation has today and the skills it will need to hit its objectives over the next one to three years. The process runs in five steps: define future requirements, build a skills framework, audit current capability, measure and prioritise the gaps, then close them through development and targeted hiring.

Last reviewed July 2026

What a skills gap analysis is (and when to run one)

A skills gap analysis is the formal, organisation-wide version of a question every leader asks informally: can our people actually deliver the strategy? It belongs in your annual planning cycle, and it earns its keep before a restructure, a market expansion, a major technology change or any other shift that redraws what your workforce needs to be able to do.

If you want a quicker, team-level read (spotting gaps inside one team without building a full framework), start with our guide on how to identify skills gaps in your team. This article covers the formal process: the one that produces a documented capability map and a plan you can put in front of the executive team.

Done properly, the analysis moves the conversation from "we need more people" to "we need these specific capabilities". Without it, hiring and training budgets are spent in the dark, hoping for a match that might not exist.

Step 1: Define what the business needs to be able to do

Before you can find what is missing, you need a clear destination. Start with your business objectives for the next 12 to 24 months. Expanding into new markets and automating manual processes each demand a specific set of capabilities your team may or may not currently hold.

Talk to department heads and team leads about the practical requirements behind each objective, and factor in where your industry is heading. If your sector is moving digital-first, digital literacy stops being optional.

Capture both hard skills (data analysis, software proficiency) and soft skills (leadership, strategic thinking). Both matter, and the soft ones are usually the harder gaps to close.

Step 2: Build your skills framework

Turn those requirements into a framework: for each function, list the capabilities needed, describe what proficiency looks like at each level, and mark which capabilities are critical versus nice-to-have. This becomes the benchmark every current and future employee is measured against, which keeps the analysis consistent across departments.

Include behavioural strengths, not just technical ones. A person's work personality reveals a great deal about where they will naturally excel. Someone with an Auditor profile, for example, brings precision and methodical focus. If your future goals demand high levels of detail and compliance, you may already have the right person sitting in the wrong seat.

Step 3: Audit the skills you already have

This is usually the most eye-opening step. Gather data through self-assessments, manager reviews, formal testing and evidence from past projects, then look past job titles at how people actually work. You might find a marketing coordinator with hidden project management talent, or a sales lead with a technical support background nobody has used.

Involve employees directly. Self-assessment produces more accurate data and makes people feel invested in their own development, which turns the exercise from something done "to" them into something done for them.

Step 4: Measure and prioritise the gaps

Overlay future needs on your current inventory and the gaps emerge. They fall into two categories: individual gaps, where a specific person needs upskilling, and organisational gaps, where a whole capability is missing from the business.

Treat a long list as a roadmap rather than a verdict. Prioritise by business impact and urgency: which gaps block objectives this year, and which can be developed over time? That prioritisation also drives the build-or-buy decision that follows.

Step 5: Close the gaps: build, buy or both

Build where you have time and latent potential. Training, mentoring, stretch assignments and cross-functional projects all close individual gaps, and structuring them through a learning platform like Compono Develop keeps progress visible and tied to the framework you built in step 2.

Buy where the capability is missing entirely or needed now. Recruitment becomes far more precise when you are hiring against a documented gap rather than a generic job description. Assessing candidates in Compono Hire on how well they fill the specific capability and behavioural gaps you identified reduces the risk of a bad hire and means every new person is a deliberate addition to the team's collective capability.

Make it a cycle, not a one-off

The skills your organisation needs will keep shifting as technology and markets move. Fold the analysis into annual planning, and check progress against clear measures: productivity, engagement scores, time to fill critical roles, and whether your upskilling efforts line up with objectives actually being met.

Organisations that treat this as a rolling discipline stay adaptable. The ones that treat it as a one-off report end up repeating the whole exercise from scratch in three years.

Frequently asked questions

How often should we conduct a skills gap analysis?

An annual review aligned with strategic planning works for most organisations. If your industry is changing quickly, a six-monthly check-in is worth the effort, because a framework built 18 months ago can already be out of date.

Is a skills gap analysis only for large companies?

No. Small and mid-sized businesses often gain the most because they have less room for error. When every headcount counts, knowing exactly which skills you need makes each hiring and training dollar work harder.

Should employees be involved in the analysis?

Yes. Self-assessment produces more accurate data than manager reviews alone, and involving people in the analysis makes them more invested in the development plans that come out of it.

What is the difference between a skills gap and a talent gap?

A skills gap is a shortfall in specific technical or soft skill proficiency within your current team. A talent gap is broader: a lack of people in the pipeline for future roles, or a market-wide shortage of qualified candidates for a role you need to fill.