Skills Gaps: How to Identify Them in Your Organization

To identify skills gaps, start with the skills your business needs to meet its goals, define the skills each role requires, then assess the skills your employees have today through self-assessments, manager input, performance data, and skills tests. The difference between the two is your skills gap.

Prioritize the gaps with the biggest business impact, and re-assess regularly as roles change. In the World Economic Forum's Future of Jobs Report 2025, 63% of employers named skills gaps as the biggest barrier to business transformation, and workers can expect 39% of their existing skill sets to be transformed or become outdated by 2030.

Skills gaps are also a key concern for employee development, and for managers trying to boost performance.

But identifying and remedying gaps is a challenge. It takes time and energy to survey your teams and uncover missing skills. It can be both a distraction and a hindrance. 

This article explores what skills gaps are and why they matter. Then we examine the classic ways to find skills gaps, slow as this process can be. 

Then we'll walk through six steps to identify skills gaps, compare the most common methods, and show how AI makes the whole process faster, so you can close skills gaps before they hold your business back.

Key takeaways

• A skills gap is the difference between the skills employees have and the skills they need to meet business goals. Gaps can exist at the individual, team, or organizational level.
• To identify skills gaps: start from business goals, define role skills, assess current skills, use performance data, compare and prioritize, and re-assess continuously.
• Combine several methods (self-assessments, manager input, skills tests, and KPIs) for an accurate picture.
• AI now makes skills mapping and gap identification far faster, so skills data stays up to date.
• Once you've found the gaps, close them through upskilling, reskilling, mentoring, internal mobility, or targeted hiring.

What is a skills gap?

A skills gap is the difference between the knowledge and competencies an employee or team has, and those that they need to perform at the required skill level as a valuable member of a successful company. 

This includes: 

• Hard skills. For developers, this might be a coding language or certification with a certain software. In sales, it might mean knowledge and experience with CRMs or a cold email strategy.
• Soft skills. These most often include interpersonal communication, giving feedback, and adapting to change. Negotiation and conflict resolution are other good examples. 
• Proprietary skills. This is the institutional knowledge and know-how built up over time in the organization, which can’t be acquired anywhere else. 

It’s perfectly natural to have specific skills gaps in one or all three of the above areas. New joiners lack proprietary skills by definition, and even your long-serving workforce needs upskilling as your products and services evolve. 

Skills gaps exist at three levels, and each calls for a different response:

Skills gaps almost certainly exist in every role, at every level, in every department. That’s normal, but you mustn’t allow gaps to grow.

Signs your organization has a skills gap

You may have a skills gap if you notice:

• Missed targets or slipping quality in specific teams
• Projects that stall because only one or two people have the know-how
• Roles that take months to fill, or new hires who need long ramp-up times
• Low internal mobility, with few employees ready to step into new roles
• Managers regularly saying their team "can't" take on new work, tools, or technology
• Low adoption of new tools, such as AI assistants, after rollout

Why identifying skills gaps is essential

Diagnosing a weakness is the first step to overcoming it. You can’t help your teams improve if you don’t know what needs improving. This then informs your overall learning and development (L&D) strategy and gives you a base to grow from. 

Unfortunately, too many L&D programs don’t start here. Instead, most take a topic-based approach to L&D, believing that with enough content, some of it must surely be relevant. 

But that’s more hope than reality.

Carefully identifying current skills gaps: 

• Helps the company spot current and future issues, including talent and knowledge shortages. 
• Gives employees a clear career progression path with next steps.
• Ensures team members are being evaluated fairly, with real reference points in their performance reviews.
• Keeps the company focused on continuous improvement.
• Creates a more adaptable, future-proofed culture.

There’s also value in spotting skills gaps but choosing not to invest in upskilling around them — at least for now. Perhaps they're not urgent, or the impact of certain employee skills gaps isn't as crucial as others identified. It's ok to not address all skills gaps simultaneously.

How to identify skills gaps in the workplace

Here's how to identify skills gaps in your organization, step by step.

1. Start with your business goals

Skills gaps only matter relative to what you're trying to achieve. List your priorities for the next one to three years, such as launching a new product, adopting AI tools, expanding into a new market, or improving customer retention. Then ask: what capabilities will we need to get there that we don't have today?

2. Define the skills each role needs

For each role or team involved in those goals, list the hard, soft, and proprietary skills required, and the level of proficiency needed. Use job descriptions, top performers, managers, and industry benchmarks as inputs. This set of skills and levels is often called a skills framework or skills ontology.

3. Assess the skills employees have today

Gather data on current skills from several sources, because no single method is reliable on its own:

• Self-assessments where employees rate their own proficiency
• Manager assessments and observations
• Skills tests and practical assessments
• Peer or 360-degree feedback
• Existing data from your HRIS, LMS, certifications, and project history

4. Use performance data and KPIs

Look at where results fall short: missed targets, quality issues, slow delivery, or customer complaints. Performance data often reveals skills gaps that surveys miss, and helps you link each gap to a business impact.

5. Compare, then prioritize

Compare current skills against required skills, by person, team, and organization. You'll likely find more gaps than you can close at once, and that's fine. Prioritize the gaps that are most critical to your business goals and most urgent, and park the rest for now. A skills audit or skills gap analysis (more on that below) helps here.

6. Re-assess continuously

Skills gaps aren't a one-off project. Roles, tools, and strategies keep changing, so build skills checks into regular performance conversations and update your skills data at least once or twice a year, or continuously if your tools allow.

Methods to identify skills gaps compared

Done manually, steps 2 and 3 are where most organizations get stuck.

As Director of People and Culture at 365 Retail Markets Brandon Caldwell explains, “I’ve sat on calls with a team of L&D professionals, SMEs and executives for hours and days on end, trying to define what seems like a simple premise: what does a person in this particular role need to do, and what are the right skills they need to have to do it? It’s an excruciatingly long exercise and can take months to get to a working draft of the skills a person needs to have in one role.” 

But advances in AI-powered tools now mean that time and effort are no longer limiting factors. You can now identify and address skills gaps with remarkable efficiency.

How AI helps you identify and map skills gaps

AI has changed how HR and L&D teams handle skills data. Instead of spending months building skills frameworks by hand, teams can now use AI to generate role-based skills, infer employees' skills from their work and learning history, and keep that data current as roles evolve.

Generative AI and automation have a few very clear uses related to skills gaps:

• The tools can automatically identify the most likely skills gaps based on your roles, team experience, tenure, and plenty of other factors.
• AI will map these skills shortages to staff at the individual level. Which means no more manual skills mapping, and you can have skills training much more tailored to real people, rather than job descriptions. 
• AI tools can analyze and update skills gaps in real time, so you’re always up to date. 
• The tools incorporate your proprietary knowledge and documentation alongside industry standards, so your skills framework reflects how your organization actually works.

All of this takes what would otherwise be a long process and executes it in record time. And crucially, your source of truth for skills never goes out of date. This is a dynamic, collaborative approach based on regular input and feedback from your teams. 

And in learning and development, collaboration is critical. 

An augmented collaborative learning environment

We’re obviously huge fans of collaborative learning. So is there a danger of AI taking over and removing the need for proper collaboration? 

No. In fact, artificial intelligence makes collaborative learning easier and more effective by removing the usual hurdles. Most often, collaboration falters because subject matter experts don’t have enough time to prepare training materials and teach others. 

Instead, AI can draft courses for your SMEs, who can then update and improve from a great starting point. Their role goes from creator to validator.

And more SMEs will be happy to take part, knowing that their load is much lighter. 

Courses no longer take months or years to create and launch, and every team member has the resources they need to upskill and succeed.

A dynamic approach to skills gap analysis

A skills gap analysis helps you decide what you do with the skills gaps you’ve identified. It’s typically a matrix that sets out your biggest opportunities, and therefore where you should invest in training. 

Here's an example based on the BCG growth-share matrix. For a full walkthrough, see our guide to conducting a skills gap analysis:

• Stars are training courses related directly to business objectives, and therefore should be a top priority. 
• Workhorses are (usually) built off already-existing training materials and help you do the basics well. 
• Question marks are difficult to train for but have a potentially high impact. 
• Dogs are skills that are hard to train for but provide very little impact. 

This kind of skills gap analysis is helpful, but also time consuming if done in full. And it too will be out of date before you take action. 

That's why AI-powered skills tools have become essential for keeping skills data, and your training priorities, up to date.

How to close skills gaps once you've found them

Identifying skills gaps is only useful if you act on them. Upskilling is the most common response: in the WEF's Future of Jobs Report 2025, 85% of employers said they plan to prioritize upskilling their workforce. Choose the right approach for each gap:

• Upskilling: Train employees to deepen skills for their current role, through courses, microlearning, and learning in the flow of work. Best for gaps in existing roles. See our guide to upskilling the workforce.
• Reskilling: Train employees for a different role when their current one is changing or disappearing. Best for organizational gaps you can fill from within.
• Peer learning and mentoring: Ask subject-matter experts to share proprietary skills through courses, coaching, and mentoring. Best for institutional knowledge that only exists inside your company.
• Stretch assignments: Give employees projects just beyond their current skills, with support. See these stretch assignment examples.
• Internal mobility: Move employees who already have the skills into the roles that need them. See why internal movement should be a priority.
• Hiring: Recruit externally when a skill is urgent, rare, and too slow to build internally.

Whatever the approach, track progress against the same skills data you used to find the gaps, so you can see which gaps are closing and which need more attention.

Identify and close skills gaps with 360Learning

Time, or the lack of it, is always a key issue for L&D teams. 360Learning Skills automates the most time-consuming parts of identifying skills gaps, so you can focus on closing them.

• Build your skills framework fast: Import your existing skills ontology, or start from a standard ontology. AI generates the relevant skills for each job from your job descriptions.
• See skills gaps across the organization: A skills dashboard shows your organization's skills, highlights gaps, and helps you find in-house experts who can fill them.
• Assess proficiency: Compare employees' current skills to their role requirements and track progress over time.
• Close gaps with the right content: AI tags your courses with skills, reveals where content is missing, and lets your internal experts create the courses to fill those gaps through collaborative learning.

"The first time I used SkillsGPT, I couldn't believe what I saw. In about seven minutes, it really dawned on me the amount of blood, sweat, tears, and investment at my prior company needed to make this type of thing happen," says Brandon Caldwell, Director of People and Culture at 365 Retail Markets.

Want to try it yourself? SkillsGPT by 360Learning, built on the same technology as 360Learning Skills, is available in the ChatGPT GPT Store. Or book a demo to see how 360Learning Skills works with your own roles and teams.