Businesses around the world are experiencing something utterly unique.

Perhaps for the first time ever, they face an uncertain economic landscape coupled with record low unemployment and record high vacancy rates.

PwC has termed it a “labor market paradox,” and it’s giving HR and business leaders an unfamiliar set of challenges as they prepare plans for multiple possible scenarios.

One of the key functions of effective HR is to identify your company’s needs and make sure your workforce aligns with those needs. With 83 percent of businesses surveyed by PwC focusing their strategy on growth, it’s important to retain the ability to respond with agility as new needs arise.

Whatever lies ahead, finding people with the right skills for your business remains a top priority. Likewise, planning ahead for a sudden change in priorities is crucial, enabling you to pivot promptly and effectively.

So how can you make sure your workforce closely matches what your company needs? And what can today’s companies do to close skills gaps?

Knowledge is key. Companies that conduct a skills gap analysis to identify what resources they have within their teams puts them at an advantage when dealing with change. Skills gap analyses can also help you predict various possible scenarios and close skills gaps swiftly–before they affect your productivity and achievement of strategic goals.

How do you identify and close skills gaps?

Step one: Identify your needs

The first stage in skills-focused workforce planning is assessing the programs, strategies, and projects you currently have at your business. That way, you can identify the high-level and day-to-day requirements of each department and team and further understand how these align with your overarching strategy and goals.

This skills gap analysis will reveal what each team needs to achieve their goals and set you on the right path for finding and supplying those needs.

Step two: Conduct a thorough skills assessment

On the whole, skills assessments are under-utilized by HR teams. While it’s relatively common practice to assess the skills of incoming talent—SHRM found that 56 percent of employers now perform such assessments—it’s far less usual to do so for current team members.

Identifying skills gaps in the workplace will help you detect peoples’ abilities and knowledge that you’re not currently taking advantage of or can make better use of. Tapping into those skills can effectively boost efficiency and accelerate your efforts without needing to pursue a costly new hire.

Step three: Rethink your hiring strategy

Traditional approaches to hiring are fast falling out of date. In today’s rapidly evolving world of work against a competitive recruitment backdrop, conventional practices focusing on a college education may no longer be the right approach to reaching the best talent.

Consider rethinking your job descriptions: Rather than identifying a required checklist of skills and experiences, many employers are now thinking in terms of a “spectrum of competencies” that covers core, cross-functional and functional skills. This approach reflects the transition of working practices towards “liquid teams” and project-based work. It also means focusing on recruits’ key traits rather than a specific skill set they can learn.

Fundamentally, today’s recruitment climate requires HR leaders to analyze traditional hiring practices to identify biases and think outside the box when it comes to attracting talent. What’s worked in the past may no longer be effective, and refreshing your approach can help attract professionals you may otherwise have overlooked.

Step four: Enhance your professional development

On-the-job training can enhance your people’s skills and represent a highly affordable way of building a more positive work culture that supports career progression.

An in-depth learning and development program should ideally be integrated directly into your business strategy. Regular sessions can reveal potential internal hires who may match your needs, such as those with transferable skills or the potential to be upskilled (or reskilled) to improve your business outcomes.

Collecting information via surveys and one-to-one meetings can help you identify people interested in changing roles or progressing through your business. This can also help boost satisfaction, strengthen your workforce, and cut your recruitment and onboarding costs.

Step five: Keep track

Creating a knowledge management team is the final step to effective skill analysis, as it gives you everything you need to keep track of your changing capacity and needs on a regular basis. Consider designating people across your organization to help gather skills data from their teams so that you have a reliable supply of accurate information to turn to when gaps appear.

Mind the gap

Skills gaps significantly reduce the effectiveness and productivity of any organization, and as businesses evolve to cope with a changing landscape, implementing a process for addressing skills gaps has never been more important.

HR leaders need to be agile and prepared for anything. When you understand the resources you have in your teams—and to what extent these remain untapped—you can be better prepared to pivot when the time comes. That will keep you on the right path toward achieving your strategic goals and building strong, happy, and productive teams.

Tali Sachs

From Tali Sachs

Tali is a content marketing manager at HiBob. She's been writing stories since before she knew what to do with a pen and paper. When she's not writing, she's reading sci-fi, snuggling with her cats, or singing at an open mic.