In a report on the skills gap, IBM predicts that “more than 120 million workers in the world’s 12 largest economies may need to be retrained or reskilled in the next 3 years as a result of intelligent/AI-enabled automation.”

Skills gap analysis is more important than ever. Your current employees are hungry for new skills and are, post-COVID, more worried than ever about being left behind. Those fears have real merit. According to the 2018 Future of Jobs Report by the World Economic Forum, by 2022, more than half of all workers will need a competency overhaul.

You can’t afford to wait to start upgrading your employees’ skill sets. It’s time to run a proper skills gap analysis to determine which training needs are essential for your organization’s future and which you can let fall by the wayside.

We’ve developed a strategy to help you perform a more dynamic and timely skills gap analysis using a classic business framework. With an adapted growth-share matrix, you can benchmark each skill request against its return on investment for the company, then decide which programs to cut and which to expand.

What the growth-share matrix has to do with skills gap analysis

The growth-share matrix was originally a framework for categorizing portfolio assets based on market factors, but we’re repurposing it to help you prioritize your training needs. Instead of using it to rate products based on a company’s competitiveness and market attractiveness, we use the framework to categorize skill levels based on the potential return on investment.

The Growth-Share Matrix was created in 1968 by Boston Consulting Group founder Bruce Henderson. At the height of its popularity, it was used by over half of all Fortune 500 companies, and it’s still taught in business schools as an effective tool for managing strategic experimentation in a fast-changing market.

The original matrix helps large corporations decide how to prioritize their business needs by dividing them into four categories: dogs, cash cows, stars, and question marks:

We’ve kept this framework but tweaked the formula. By assessing each training need based on organizational impact and cost of implementation, you can prioritize which training needs should be addressed immediately, which to put on hold, and which to drop completely.

In the original framework, the bottom-left square was referred to as cash cows, but since we’re talking about critical skills and not money, we call them workhorses.

How to use the growth-share matrix for skills gap analysis

Let’s look at how the growth-share matrix can be used to prioritize reskilling and upskilling needs.

First, identify skill gaps

Before you start your skills gap analysis, you will need to know the current skills your workforce has in order to identify any necessary skills the company might want to train for. Assemble this information through independent research and in-house training needs analysis.

There are many different ways to assess training needs, but we recommend a bottom-up, collaborative approach. Instead of letting managers decide what their teams need to know, give individual employees a voice and a platform to tell you where their knowledge gaps are. Surveys and 360 performance reviews are both potential tools for this, but the most effective way to democratize your training needs analysis process is through a collaborative learning platform where employees can continually declare new learning needs.

Additionally, look at trends in your industry, new technologies, and competitor analysis to determine the right skills to give your company a competitive edge.

Related: The Right Way to Do a Training Needs Analysis

Assess training needs

Once you’ve collected a list of specific skills that suit your company's needs, assess each one based on two factors:

Organizational impact. How does this need contribute to the company’s short-term and long-term goals? While employees are great at identifying gaps in their knowledge, they may not be able to see the effect of those skill gaps on the company as a whole. It’s up to leadership — either team leaders, human resources, or a dedicated Learning & Development department — to look at the big picture and determine the effect each skill (or lack of it) will have on the department and the company.

Cost of training. How much will it cost the company to close this skill gap? Consider not just the price tag of the training but the time and company resources that will be needed as well.

The goal here is to roughly estimate the potential ROI of pursuing training. Plot each skills need inside the matrix based on whether it has high or low organizational impact and high or low cost of training.

Their position in the matrix will help you determine what actions to take next:

Deprioritize the dogs
Dogs, in the lower-right quadrant of the grid, are skills that have low organizational impact and a high cost to train for. In the original framework, they were called dogs because they were bedogging, or plaguing the company.

Dogs have the potential to tie up valuable training budgets while contributing very little to the company’s long-term goals or bottom line. Drop these needs completely, or try to reframe them in a way that decreases their liability.

Skills that require expensive or frequent training programs are likely dog suspects. For example, your organization traditionally sent new salespeople to an expensive, in-person training to learn to use the company’s CRM software. However, you are already planning to switch CRM services in the next two years, lessening the long-term impact of this costly training.

It would be prudent to either drop this training completely or find a way to mitigate costs. Perhaps new employees could receive in-house training from more senior employees instead.

Maintain a steady stream of workhorses
Workhorses exist in the lower-left quadrant. Training for these skills costs little to execute and isn’t as pivotal to your business goals.

Workhorses are not exciting, shiny, or new. They might become irrelevant a couple of years down the line. But they can add value to the organization right now, with very little manpower or cost, so they are worth maintaining.

Common workhorses are trainings that fulfill a temporary need, rely on already-created training materials, or require little effort to roll out—for example, soft skills like time management or communication skills.

If a member of our sales team frequently misses deadlines and meetings, we could sign them up for a pre-existing in-house time management course to bolster their performance with very little effort or expense. It doesn’t make a big impact on the organization as a whole, but it’s a low-cost way to boost a few employees' job performances.

Prioritize stars
Stars, in the upper-left quadrant, are initiatives that are high value and low cost. These training needs tie directly into your business objectives and require very little overhead in terms of time and money.

Stars are the holy grail of gap analysis and should be prioritized as first on your list of skills to pursue. In an ideal world, stars would make up the bulk of your employee training programs (and if you create a robust base of tribal knowledge, they just might).

A great example of a star training need is product familiarization training. Your best-selling product has just been updated with some shiny new bells and whistles, and the sales team should be trained on how to use the new features. Educating the sales team is extremely relevant to the company’s goals because it will directly lead to more sales. But it also costs very little to implement. You can leverage peer learning and have a product engineer or project manager lead a course dedicated to explaining the features for next to nothing. All signs point to full speed ahead.

Keep an eye on question marks
Finally, question marks sit in the upper-right quadrant of the grid. Training for these skills will contribute directly to the company’s goals, but it will also be expensive to implement.

Question marks are a sign to proceed with caution. Don’t write the training off, but investigate ways to mitigate costs. Are there any alternative ways to fulfill this need? Perhaps you can leverage internal knowledge or test-drive a less expensive training program?

Maybe your company plans to incorporate AI automation into their email marketing software. This is a high-impact change that will free up manpower and increase overall company efficiency. Key team members need to be trained on how to use the automation tool to create and send customized emails. The official training course, however, is very expensive.

Consider your options. You might decide the training is worth the money and build it into your budget, or you might decide to temper your costs by sending only one employee to the training, relying on them to upskill their colleagues.

Related: 3 Data-Backed Ways to Prove Training ROI

Reassess your skills gap assessments periodically

Since the introduction of the growth-share matrix, businesses have changed and adapted the way they use BCG's matrix.

Likewise, your analysis is based on current market factors as well as company goals and KPIs. Major disruptions to the industry or rapid shifts in company strategy mean that you’ll need to periodically reassess your skills gap assessments.

You can always return to your gap analysis to determine if employee development programs are living up to their forecasted ROI — every six months or possibly even more frequently if you’re in a particularly dynamic industry.

Technology is evolving fast. So fast, that it just might leave workers behind if organizations don’t hustle to overhaul their training programs to keep up. Stay on the cutting-edge by giving your workers the skills they need and not wasting time on the ones they don’t.