Competency gaps are a concern for every business in building and developing their workforce. However, without a foundation and tools, it is very difficult to identify competency deficiencies that prevent employees from achieving desired organizational goals. Therefore, many experts recommend that businesses implement regular assessments to promptly identify competency gaps and provide timely solutions to close them.
1. Warning about “Competency Gaps” for All Businesses
Employee competency is the foundation for the growth and success of any business. However, in reality, not all employees meet the necessary competencies to effectively perform their jobs. This is the competency gap that every business needs to pay close attention to.
1.1. What is a Competency Gap?
A competency gap is the difference between an employee’s current competency and the competency required to complete a job effectively. It includes both hard skills (knowledge and professional skills) and soft skills (communication skills, teamwork, critical thinking, etc.).
The mismatch between job requirements and actual employee competencies will undoubtedly significantly impact work results. Therefore, identifying competency gaps is becoming a major obstacle for businesses’ recruitment activities. According to a statistic in the United States, up to 68% of recruiters struggle to find candidates with sufficient skills for open positions, and this situation is increasing.
Causes of competency gaps can be due to several factors, such as:
- Businesses not keeping up with rapid labor market changes: Fluctuating market demands require businesses to update and adjust job requirements, leading to continuous changes in necessary skills and knowledge for each position. Meanwhile, businesses are unable to provide training programs for employees to meet job changes. For example, a survey from MIT Technology Review shows that only half of factories in the US provide formal training to workers on using new machinery. The lack of this leads to outdated skills and knowledge, contributing to the increasing competency gap between employees and job requirements.
- Increasing demand for technology skills: The 4.0 era and strong digital transformation make developing digital skills essential, but not all personnel are ready for digital transformation or can adapt at the pace of the organization’s digital transformation. Simultaneously, the development of modern tools, machinery, automation, etc., creates more job opportunities for mechanical, electrical, and software engineers. However, educational and training opportunities in this field are not keeping up with the market development pace. While 67% of new jobs in the STEM field are in computer science, computer science degrees account for only 11% of total STEM bachelor’s degrees.
- Lack of soft skill development opportunities: Besides necessary professional knowledge and skills, soft skills are also crucial for employees’ comprehensive competency development. However, in reality, many organizations and employees themselves do not truly focus on cultivating soft skills, or only focus on a few very basic ones.
1.2. Why Identify and Close Competency Gaps?
According to a study, competency gaps can cost companies up to a million dollars per year. When recruiters cannot find candidates with sufficient competency to fill open positions, those positions can remain vacant for extended periods. Too many vacant positions can directly impact company productivity and profitability.
Another study by SHRM shows that many businesses struggle to find employees with the necessary skills and competencies for critical positions. Competency gaps often appear in technical skills, management skills, and soft skills. SHRM’s survey results indicate that up to 75% of HR professionals report skill gaps are a major issue in recruitment.
In parallel, when addressing employee training and development, the most important question is always how to accurately identify competency gaps and subsequently provide suitable solutions to close these gaps.
2. How Does Competency Assessment Help Identify Competency Gaps?
Businesses cannot subjectively determine what employees are doing well or poorly, whether competency gaps exist, or to what extent they exist. At this point, competency assessment is an effective solution to help businesses accurately identify these “competency gaps” based on data, transparent tools, and methodology from a team of experts. From there, appropriate measures can be implemented to close the gaps and enhance employee work effectiveness.
Businesses should proceed with the following steps to effectively conduct competency assessment:
- Define objectives and job requirements: Clearly analyze overall business objectives and specific job requirements for each position, thereby identifying the necessary skills and knowledge for each position to perform well.
- Select appropriate assessment methods: Choose assessment methods suitable for the business’s specific objectives, target audience, and conditions. Some common assessment methods include: performance appraisal, 360-degree assessment, competency assessment through tests, surveys, interviews, etc.
- Design assessment tools: Design assessment tools suitable for the selected method to ensure the objectivity, accuracy, and ease of use of the assessment tools.
- Conduct competency assessment: Perform competency assessment objectively and comprehensively; businesses should collect information about employee work performance through various sources to ensure accuracy and multi-dimensionality.
- Analyze assessment results: Analyze competency assessment results to identify each employee’s strengths, weaknesses, and competency gaps.
According to recommendations from HR experts, upon identifying competency gaps, businesses need to find solutions and develop training plans tailored to employees’ needs and abilities to help close competency gaps and improve work effectiveness. Besides traditional training methods like internal training, businesses can also explore some solutions such as:
- As one of the leading reputable and experienced entities in Vietnam, SKALE Talent (formerly the organizational consulting and development department under L&A) can help businesses implement competency assessment and develop suitable training plans to effectively enhance and close competency gaps for the workforce. The SKALE competency management platform uses technology to assess and develop talent based on data, contributing to improving human resource quality for sustainable business growth.
- To ensure the effectiveness of training programs and systematic investment in human resources, businesses need to conduct employee competency assessments after training completion and periodically over time to monitor employee development and adjust training programs accordingly. With over 20 years of experience in human resource consulting and development, SKALE is proud to be a trusted partner for many businesses in competency assessment and managing individual employee development plans.
Conclusion
Identifying and closing competency gaps is extremely important for both businesses and employees. Businesses need to invest in regular employee competency assessment and build appropriate training plans to help employees develop competencies, thereby enhancing operational efficiency and sustainable development. Furthermore, competency assessment also helps businesses reduce subjectivity in the recruitment/appointment process.
>> Learn more about why businesses need competency assessment here.
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