Remote Work Glossary

What is an HR gap analysis

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    An HR gap analysis is a process used to identify gaps in an organization's human resources strategy and capabilities. 

    The analysis evaluates a business’s current HR practices, policies, and processes. It also helps to identify areas where improvements can support an organization's needs and help them meet their goals and objectives. 

    Is gap analysis a critical part of HR strategy?

    Gap analysis is a critical part of HR strategy, helping HR leaders identify areas where the organization's HR practices and policies misalign with industry best practices or the organization's overall business goals and future needs. 

    The information is used to develop strategies and initiatives to address gaps. It ensures the organization's HR practices are effective in attracting and retaining top talent, as well as supporting the organization's overall strategic objectives. 

    As a result, gap analysis is important in helping HR professionals develop and implement effective HR strategies that support the organization's short-term and long-term success.

    Importance of gap analysis for HR leaders

    Gap analysis is an important tool for HR leaders as it allows them to identify areas for improvement, plan growth, analyze resources, and more.

    Growth planning

    An HR gap analysis can be a valuable tool for growth planning as it helps identify where the organization's HR policies and processes may be inadequate or outdated. The HR leader can develop a plan to update or improve those policies and processes as needed. 

    Resource analysis

    By evaluating the organization's current HR practices, policies, and processes, the human resources team can make more informed decisions about allocating HR resources, such as redistributing HR staff to different areas of the organization. An HR gap analysis provides valuable insights that help conduct a more effective resource analysis and make more informed decisions about allocating HR resources.

    Strategic planning 

    An HR gap analysis typically involves comparing the organization's current HR practices and policies to industry best practices and identifying areas where the organization could improve. Information gathered is used to inform strategic planning and ensure that the organization's HR practices are aligned with its overall business goals.

    Succession plan 

    An HR gap analysis reveals areas of weakness, such as a lack of clear career development paths, inadequate training and development programs, or a lack of diversity in leadership positions. 

    By identifying these gaps, leaders can develop strategies to address them and improve the organization's ability to identify and groom future leaders. It also considers general employees, focusing on retention, employee engagement, and mentoring as part of the strategy.

    How can HR leaders execute a successful gap analysis?

    To execute a successful HR gap analysis, HR leaders must first identify the organization's current HR practices and policies and compare them to industry best practices. Consider the following steps as a starting point.

    • Identify the organization's current HR practices and policies
    • Compare them to industry best practices
    • Identify areas where the organization could improve
    • Develop strategies to address identified gaps
    • Align HR practices with overall business goals
    • Continuously monitor and evaluate the effectiveness of gap-closing strategies

    How to conduct an HR gap analysis

    The above steps can be summarized in four distinctive phases, namely, define your goals, identify key skills, assess current skills, and create a plan.

    1. Define Your Goals

    Defining goals when conducting an HR gap analysis ensures that the analysis is focused and meaningful. By defining specific goals, HR leaders can identify the key areas they want to assess and ensure they collect the right information to inform their analysis. 

    Additionally, defining goals helps HR leaders prioritize strategies to address identified gaps and align their practices with the organization's overall business goals.

    2. Identify Key Skills

    Identifying key skills when conducting an HR gap analysis ensures that the organization has the right talent to support its business goals. By conducting a skills gap analysis, HR leaders can assess whether the organization's current workforce has the necessary skill set. 

    If not, they can develop strategies to acquire or develop them, such as taking on new hires to fill the skills gap or upskilling existing team members. 

    3. Assess Current Skills

    Assessing the skills of current employees provides a baseline for understanding the organization's current state, capabilities, and areas for improvement. 

    By conducting a skills assessment through performance reviews, HR leaders can identify the skills and competencies that the organization's workforce currently possesses and compare that information to the key skills and competencies necessary for the organization to succeed. The assessment also helps HR leaders identify employees who may be ready for promotions or additional responsibilities. 

    4. Create a Plan

    Creating a plan ensures that the analysis is comprehensive and well-structured. A well-designed plan can help HR leaders identify the key areas they want to assess, the information and data they need to collect, and the necessary steps to conduct the analysis. 

    The plan will typically lead to one or more of the following strategies:

    • Adjusting headcount by creating positions for new employees or tweaking job descriptions
    • Professional development, such as meeting training needs and offering internal internships
    • Restructuring the team through workforce planning by establishing a new team or promoting an employee