What Is a Gap Analysis in HR? Here’s How to Conduct One

A high-performing human resources team or function is critical. HR departments must attract, develop, and retain top talent, create a positive work environment, and align HR strategies with organizational goals. However, many organizations fall short. 

That’s where a gap analysis comes in. It’s a tool that allows HR professionals to identify discrepancies between current capabilities and desired outcomes. 

Since people are vital to your organization’s growth, their development must be prioritized in your business plan. 

In this article, we will explore the concept of a gap analysis in HR, its importance, and the key areas to focus on when conducting one. We’ll also show you how to effectively conduct a gap analysis in your company HR, and the tools and techniques needed.

What is a gap analysis in HR?

A gap analysis measures the current state of your workforce and its skills against the desired outcome needed to meet business goals. 

It highlights discrepancies in personnel and skills. Accordingly, it’s been referred to as an HR gap analysis, skills gap analysis, or workforce gap analysis. 

Conducting a gap analysis helps position your organization for long-term success. It helps you plan for growth, identify future hiring needs, understand current workforce skills, and develop strategies to address these gaps.

To illustrate this, consider a company's employee engagement score is currently low at 55%, leading to high employee turnover. In addition, employee feedback indicates poor career development and communication. 

The goal is to increase the engagement score to 75% and reduce turnover by 15% through a more supportive environment. To address the 20% engagement gap and turnover issues, you need an HR gap analysis to identify causes and develop targeted solutions.
 

Why is an HR gap analysis important?

Now that we have clarified what an HR gap analysis is and what it looks like, let’s look at its key benefits. 

• Begins your HR strategy: Since it’s heavily focused on HR operations, the gap analysis is considered the first step in creating a company’s HR strategy.
• Identifies areas for improvement: It pinpoints discrepancies in HR, revealing weaknesses like inefficient recruitment or inadequate training.
• Aligns HR with business goals: By understanding strategic objectives, it ensures HR efforts support these goals, such as developing skills for new markets or optimizing staffing.
• Optimizes HR processes: Gap analyses uncover inefficiencies in processes like employee orientation and onboarding, allowing for improvements that enhance efficiency and reduce costs.
• Enhances employee performance and satisfaction: By identifying gaps in training and compensation, HR can implement initiatives that boost employee engagement and retention.

Key areas for a human resources gap analysis

To improve your HR effectiveness, make sure you begin with a gap analysis that carefully evaluates key areas of operation. 

This process will help you identify opportunities for improvement and allow you to fully realize the potential of your HR strategies. 

By exploring these gaps, we can transform challenges into meaningful opportunities for growth.

• Workforce planning

This area examines whether your employees' skills align with your company's future needs. It helps identify if you will have the right people with the appropriate abilities as your business evolves.  

• Talent management

This involves assessing how effectively you attract, develop, and retain quality employees. A critical part of this evaluation is analyzing your current performance appraisals and reviews to ensure they are fair and constructive.

• Recruitment and onboarding

This focuses on your methods for finding and integrating new employees. Assessing these strategies can help improve your hiring processes and ensure new employees feel welcomed and become productive faster. 

• Training and development

This analyzes your existing learning programs for employees to determine if your employees are acquiring the necessary skills to perform their jobs effectively and advance within the company.

• Employee engagement and satisfaction

This area measures how happy and motivated your employees are. Understanding these levels can highlight areas that need improvement in the employee experience.
 

How to conduct a HR gap analysis in your organization?

As mentioned, an HR gap analysis offers an opportunity for significant improvement in your HR function. Here’s a concise roadmap to guide you through the essential stages:

Step 1: Define the desired future state

Clearly articulate your vision for the HR function by aligning it with organizational goals and setting specific objectives, like improving HR and recruitment metrics and KPIs. These can include reducing turnover or improving time-to-hire, among others. 

Step 2: Assess the current state

Evaluate existing HR practices and performance by reviewing HR policies, analyzing data (such as turnover rates), and gathering feedback from employees and managers. 

Step 3: Identify the gaps: 

Compare the current state with your vision to pinpoint areas needing improvement, such as talent acquisition, development, or technology. 

Step 4: Analyze the causes of the gaps

Investigate the root causes of the gaps through further data analysis and interviews to inform your solutions. 

Step 5: Develop action plans

For each gap, create Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART) action plans outlining necessary steps, responsibilities, and deadlines. 

Step 6: Implement the action plans

Execute your plans by introducing training programs, refining recruitment, or enhancing salary and compensation structures. 

Step 7: Monitor and evaluate progress

Track the effectiveness of your initiatives by reviewing key HR metrics and collecting feedback for continuous improvement.

Tools and techniques for conducting a gap analysis

Effectively identifying and addressing gaps in HR positions your organization for continuous organizational growth and success.  

This section will delve into several constructive methodologies you can use to assess the current state of HR, envision a desired future, and pinpoint areas of improvement.

The following tools offer valuable insights: 

HR metrics and analytics

By analyzing existing HR data such as turnover rates, time-to-hire, training participation, performance scores, and cost per hire, organizations can identify measurable gaps between current performance and their desired goals. 

Tracking trends and recognizing outliers can lead to actionable insights, guiding targeted improvements.

Employee surveys

Gathering direct feedback from employees through surveys is a powerful way to uncover gaps in areas like engagement, satisfaction, communication, and the effectiveness of HR programs and policies. 

Make sure your employee surveys are anonymous as this fosters an environment of honesty, yielding valuable insights for improvement. 

Interviews and focus groups

Engaging in one-on-one interviews with key stakeholders, including managers, employees, and HR staff, as well as facilitating focus groups, allows for a deeper exploration of the reasons behind identified gaps. 

These methods foster open dialogue and the examination of underlying issues and perspectives that quantitative data alone may not capture, ultimately driving positive change within the organization.

Conclusion

The pursuit of HR excellence is an ongoing journey of transformation, where gap analyses act as a guiding tool. 

By consistently evaluating and bridging the gaps between existing HR practices and desired outcomes, organizations can gain a wealth of advantages. From significantly enhanced employee performance to more efficient processes to alignment with strategic objectives to building future capabilities easily.

Embracing gap analysis as a core commitment empowers HR to remain agile and responsive, positioning it as a powerful driver of positive change within the organization. This proactive approach not only elevates HR's impact but also fuels overall organizational success.

Need help creating a gap analysis for your HR team? We’ve got you covered. Tawzef’s team of experts will help you create an HR or business gap analysis for your organization. Get in touch today!