What is an HR Gap Analysis and How Can Position Management Help?

Navigating the dynamic landscape of human resources (HR) requires a keen understanding of the organization’s needs, its workforce, and the intricate interplay between them.

In this pursuit, human resource professionals often find themselves tasked with ensuring that the right people are in the right positions and equipped with the necessary skills and resources to drive the company’s success.

This is where the concept of HR gap analysis comes into play – a strategic approach that illuminates the disparities between the existing workforce and the organization’s goals.

In this blog, we will delve into the depths of HR gap analysis, and specifically explore how the strategic tool of position management can serve as a guiding light in bridging those gaps effectively and efficiently.

Conducting an HR gap analysis is essential for several reasons. Firstly, it ensures that HR practices are aligned with the organization’s overall goals and strategies. Through organization-specific data, it helps in identifying areas that require attention and improvement, such as talent acquisition, employee development, performance management, or succession planning.

By understanding these gaps, organizations can improve data-driven decision-making, implement targeted interventions and drive initiatives to enhance HR performance and effectiveness.

Secondly, an HR gap analysis helps organizations stay compliant with changing legal and regulatory requirements. It ensures that HR processes and effective HR policies are in line with labor laws, regulations, and industry best practices.

Lastly, an HR gap analysis enables organizations to optimize their HR resources and investments.

It helps in identifying redundant or obsolete practices, processes, or systems and reallocating resources to more valuable initiatives. This analysis also determines where additional resources, training, or technology may be needed to bridge the identified gaps and improve overall HR performance.

An HR gap analysis is a critical exercise that gives you the human resources analytics you need to help your company grow and expand, make strategic decisions along the way, and foster positive business outcomes.

Without proper HR analysis, you can’t get a complete and transparent picture of your workforce and how it fits into larger strategies and initiatives.

As a result, you could over- or under-budget employee costs, inadvertently stunt productivity when you need to increase it and fail to respond effectively to internal or external disruptions. 

If the goal is growth, for example, gap analysis can show you if or when additional headcount may be needed so you can plan ahead.

It also identifies if current employees have useful skills that can be tapped or if they should be promoted into management roles. And you can determine how best to handle employee attrition and replacement, including retirement and turnover, without losing ground.

Gap analysis is also useful when going through an acquisition process. As your organization blends with another’s, you can know with greater certainty what the tactical and financial value of your workforce is, and whether you need to trim your team or reorganize it to justify employee expenses.

It’s also an excellent tool for developing or evolving a recruitment strategy. If change is on the horizon, such as entry into a new market or the creation of a new team, you know where to direct your efforts to find and hire people with the skills and experience needed to navigate the change, or if hiring internally makes more sense. And you can stay aligned with the budget by ensuring each new role or skill is absolutely necessary and not a wasted investment.

Instead of reacting at the moment to a sudden need, change, or crisis, you can proactively and responsibly make personnel decisions based on the analysis you’ve already done.

Performing an HR gap analysis can be tricky. That’s because it’s largely dependent on the amount and quality of workforce analytics available to you. But some organizations don’t have the in-house tools or resources to gather the data, let alone make sense of it, and this can create some hurdles.

One hurdle is lack of visibility. Many people management tools that still rely on person-based architecture don’t offer a way to store or update position information.

Every time an employee leaves the organization, any data around their position also leaves with them — including salary, reporting structure, and key skills and responsibilities — creating new visibility gaps that have to be backfilled manually.

When hiring to replace the employee, HR teams often have to start over and re-create information about the role or position from scratch. In doing so, they miss opportunities to rethink or update the position’s requirements to more closely align with new business demands.

Another hurdle involves training and professional development. Without clear position data, it’s impossible to know who needs what training and which professional development programs would be most beneficial. You can’t design appropriate training or development pathways if you can’t see or don’t understand your current workforce and their needs, making it that much harder to retain good employees.

To overcome these challenges, it’s imperative that your organization has the right mechanisms in place to collect and manage critical workforce information.

To effectively implement position management and address the gaps identified through an HR Gap Analysis, organizations should consider using HR software or human capital management (HCM) tools specifically designed for this purpose. These tools can help automate position management processes, track job descriptions and qualifications, and provide real-time data for analysis and decision-making.

Position management gives you the depth and breadth of insight into your current workforce — specifically, at the position level — to optimize gap analysis so leaders can make decisions that align with business goals and budgets.

Let’s say a person leaves your organization. With a position management tool, the data about their former role remains intact. Position by position, managers and executives get the accurate, real-time information they need to understand the current state of the organization.

Using the data in the form of a dynamic organizational chart, for example, users can plan for what-if scenarios and compare them to the current makeup of the organization, helping them map potential growth or retraction areas to see what kinds of roles may be needed, eliminated, or evolved down the road. The same data can also be used to adjust budgets to account for new hires.

Finally, with broad visibility into currently filled and open positions, users can determine where more training is required to close skills gaps and create a flourishing, competitive workforce. And they can uncover development opportunities for existing employees that not only support the career paths of individuals but also set up the organization as a whole to meet long-term goals.