One thing is for sure: you need competent people to do a good job. 

If you want to do a better job in a certain area, you need to hire talent with competencies you miss at the moment.

To address the areas where you have a shortage, it is important to understand the difference between skills and competencies, and how conducting a competency gap analysis could make all the difference to your future success.

Before you hire an expensive business analyst to write you a 10-page gap analysis report, it is well worth taking the time and seeing what all the fuss is about. 

Listen to the Virtual Frontier Podcast to find out more:

Competency Gap Analysis Definition

In the language of a 4-year-old, a gap analysis is making sense of what you need to do to get from the present to the future. 

Understanding the difference between the present and future state of business goals and the employee competencies you need to get there is part of the competency gap analysis. 

The benefit of doing a competency gap analysis is you get a clear, structured, and strategic action plan about the next steps in:

  • Recruitment
  • Reskilling/upskilling 
  • Goal setting
  • Resource management
  • Strategic planning
  • Innovation
  • Customer acquisition 

Competency and skills gap analysis is a tool you must have for bridging any discrepancies where you are and where you want to go next with your business.

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Competency vs. Talent Gap Analysis 

As a general rule, organizations can have a gap in:

  • Money
  • Skills
  • Competencies
  • Labor 

Lacking one or more of the above (skills, competencies, and labor) is called talent gap analysis. This complex talent shortage is where most companies find themselves when speaking of a lack. 

Time Shortage Analysis 

If you lack time, that is something else: there is little you can do to add more of it. But you can restructure how you use time and cover the gap with smart timeboxing.

Find more about timeboxing and other virtual team performance hacks in the video below:

Skills vs. Competencies

Skills and competencies are part of any job description. Usually, job searches are a mixed bag of skills and competencies. Traditional performance appraisals are based on evaluating skills and competencies. But there is a difference between the two that can help you understand why sometimes skilled people don’t deliver and what you can do to change that.  

1. Skills

Skills are abilities.

They describe what an employee is capable of doing.

Skills theoretically demonstrate knowledge, aptitude, experience, and mastery about a certain expert area in which an employee stands out. 

Example of a job skill: Knowledge of Xero accounting software. 

2. Competencies

Competencies are behaviors. Simply put, competencies are applied skills or skills put into context.

They describe how an employee should do a job. 

Viewed holistically, competencies are precise markers of how successful is someone at their job by performing tasks with all the prowess they have accumulated over the years in hard skills, soft skills, and life lessons. 

Competencies are visible, measurable, and closely related to business goals. 

Example of a job competency: Perform quarterly financial analysis reports with Xero on major x,y, and z client accounts.

As you can see, distinguishing between skills and competencies can be tricky. Context makes all the difference and is a factor many managers forget about when planning jobs and writing job descriptions. This is especially true for the jobs of the future that surpass basic skills, require more autonomy, and people skill artistry.

You now better understand all the struggles project managers go through when doing competency gap analysis under pressure!   

If you are not using your capital, technology, and people to their best potential, you need a competency gap analysis report to instigate a change that will take you to your future target goals. 

How to Write a Competency Gap Analysis Report in 5 Steps

Analyzing competencies requires consideration of the individual and team skills and competencies, and organizational and strategic alignment of the findings.  

  • Specify your organization’s future goals. Make them SMART (specific, measurable, achievable, realistic, and timely). Identify market gaps. Analyze the competition. What area lacks relevant skills and knowledge? Can you do process improvements? Can you add value to the current state by developing new products or services?
  • Analyze the future of work. Reach out to the future before it reaches you — inspect job market trends, check disruptive industries and innovation hubs, find out where your niche is going, and how to use the competencies you have in the future that is to come.    
  • Determine competencies needed to achieve future goals. Do some competencies need to be recalibrated? Are any obsolete? Can you reshape competencies by automating certain skills?  
  • Evaluate current competencies. Can you add value to the current state by developing new competencies? Do you need to upskill staff, hire new freelance talent, or fully employ a new person? Repetitively engaging in competency gap analysis will prevent you pull out all the stops when a shortage occurs. Instead, you are better prepared to respond to changing circumstances. 
  • Define the gaps in competencies. Competencies tend to evolve in context. Therefore, review the applicable and practical value of the competencies you have by assigning them metrics. You can link competencies with OKRs and KPIs and align individual and strategic business goals by writing the competency gap analysis report.    

Let’s put your findings into action! 

Create a powerful solution to talent gaps by working with high-performing virtual teams.

Click below to learn how to reinvent skills and competencies in the current business context: 

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Self-Managing Teams: The Secret to Productizing Your Services

Ever wondered how to balance the demands of steering your company while actively leading and empowering your team?

Self-managed teams are inherently adaptable. Their ability to self-organize allows them to respond swiftly to changes in the market.

Given their autonomy and collective responsibility, self-managed teams are often more attuned to customer needs.

This heightened customer focus can result in better products or services and improved customer satisfaction.

3 minutes read time

Sales Funnel Optimization: How to Make More People Buy Your Stuff

Sales funnel optimization means making more people buy your products by understanding what they want and what problems they have. You can do this by testing simple things to see what works best. This guide will show you step-by-step how to make your customers like and trust you, and eventually buy what you're selling.

3 minutes read time

How to Reduce the Project Life Cycle Stress

The stress of juggling multiple projects without a clear roadmap can feel overwhelming.

Costs seem to skyrocket as inefficiencies and unexpected hurdles arise along the way, eating into your profit margins.

Scaling your operations becomes a daunting task, as your existing processes struggle to accommodate growth, leading to missed opportunities and potential setbacks.

The lack of real-time insights and effective communication within your team can further exacerbate these issues, leaving you feeling lost in a maze of complexities.

It's time to break free from this cycle of frustration and uncertainty, regain control, and chart a course toward sustainable success. 

4 minutes read time