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How to Conduct a Skills Audit in Manufacturing Part 2: Identifying and Filling Skill Gaps

Skills Lab,

In our previous post, we outlined the various methods you could use to identify the non-negotiable and desired skills your organisation needs to achieve its short-term and long-term objectives.

How to identify the skills gaps in manufacturing

In this post, we’ll be discussing how to identify and fill the skills gaps in your workforce.

A skills audit of the current workforce helps you know, and be able to clearly articulate, your team’s capacity to respond to business demands. It ensures you know what training needs to be done and what skills you might need to recruit.

There is also no finite skills analysis that will last the organisation or team for the next 5 years. As people move as individuals and teams develop skills, this skills audit needs to flex and move with them.

The amount of work required to conduct a skills audit will depend on how well organised your current systems are. In any case, use tools you’re comfortable with: there’s nothing wrong with Word or Excel. Just get something down that will provide you with a baseline to work from. 


We’ve outlined just one of the many possible approaches to take.




Using the above picture as an example, complete the following in a spreadsheet:

  1. Fill in current, desired and non-negotiable future skills under your chosen categories in Row A. Example: Managerial, Functional, Technical, Supportive, Administration, Operation, Implementation, Research & Development, and Core Competencies. Use the position description/s for your team AND your pre-prepared list of future skills derived from the strategic skills meeting.

  2. You might want to separate skills into key business timeframes i.e. skills for “now”, “five years” and “10+ years”.

  3. Enter the desired competency ranking that the organisation should have for each skill. Again, this will be based on predetermined outcomes from your future skills session.

  4. Now give each employee a competency rank: i.e  0-4, where:
    0 = None – lack of competence in a specific topic.
    1 = Basic – understanding of concepts and fundamentals with some initial practical application.
    2 = Intermediate – solid conceptual understanding with some practical application.
    3 = Advanced – significant conceptual knowledge with practical experience in performing a defined activity/task at a consistently high standard.
    4 = Expert – extensive knowledge, perfected skill and prolonged experience in performing a defined activity/task at the highest standard.
  5. Average the competency ranking for all employees for each skill.

  6. Find the difference between the average ranking and the desired ranking. List this as a percentage.

  7. Encourage other departments to use the same system to gain a business-wide snapshot of current skills level and gaps.

  8. Collaboratively plan how to fill the skills gaps.

  9. Re-evaluate every 6 months to 1 year.


For a more well-rounded assessment, get each employee to self-assess their own skills competency level in addition to the manager. Work towards including this in regular performance reviews so you have the data on hand.


It’s also important to keep tabs on external trends. Read industry blogs, magazines and reports. Become a member of LinkedIn groups such as ‘Australian Manufacturing’ and ‘Manufacturing Professionals – Australia’. Look at what your competitors are doing well and what they’ve failed at. If employees are moving across to another company, find out why.

How to fill the skills gaps.

Growing a talented workforce helps ensure manufacturing will continue to be the bedrock of our economy and competitiveness.” Jay Timmons, President and CEO, The National Association of Manufacturers

By now you should know what skills you have and what skills will be required going forward. But how do you go about filling the gaps? Especially when long-term business goals are not as tangible as day-to-day demands?

Filling skills gaps requires a multi-layered approach; considering what can be done in-house and what needs to be outsourced.

Work to develop your team internally

Being prepared and filling the need before it arises will mean you can react quickly to market changes. To achieve this ‘readiness’, the business needs to coach and mentor employees to encourage a ‘growth environment’. Companies with this culture are the strongest and market-leading.

Internal development can take various forms:

  • Asking employees if they’ve got interest in certain areas that align with the desired skills and encouraging work around this.
  • Harnessing your performance reviews process: add new skills and competencies to individual performance measures in consultation with your employees.
  • Get more competent team members to train less competent team members. 
  • Give specific tasks or projects to less competent team members to embed new learning.
  • Follow up on competency levels in 3 month check-ins.

Invest in outsourced training programs

Occasionally skills gaps aren’t able to be filled internally due to a lack of resources, time, or experience. In this case, you might need to invest in external training programs.

External development might include:

  • Strengthening ‘weak skills’ across the team:  a skills audit might show that some employees are more capable than others.
  • Ensure the team is strong in core areas as a whole; for example, instead of ‘strong fault-finding’ skills existing in only 10 per cent of the team, ensure a moderate level of the skill exists across 100 per cent of the team with ‘off-the-shelf’ automation training courses, or peer-to-peer training
  • Developing skills through customised training programs designed according to the actual site set-up and focusing on highly relevant skill generation

Getting the most out of your employees

Make it clear that skills development is a shared responsibility. If employees know that you expect them to learn and grow, they will go above and beyond.

Show them their development path, give them a clear idea of what they've got to do to get to the next step, then provide the training and mentoring to facilitate. BUT understand that people have different motivators. For some, a clear career progression pathway is motivating, but for others, more freedom and the ability to develop skills and see where it leads is more motivating. Some highly technical people thrive on continuing to hone their skills as specialists as opposed to stepping into a leadership/management role.

Market-leading companies will be those with the best skills. Companies with the best skills have an environment where people can grow, experiment, and be autonomous with the way they work.   

Skills auditing cautions

‘Soft Skills’ vs. ‘Technical Skills’

Understanding your employee’s interpersonal skills is equally as important as knowing their technical skills. You might have a highly competent technical engineer, but they may not be good at communicating their work. In this case, you might offer them opportunities to practise this skill internally at team meetings and hold off from getting them present to clients or customers until they’ve developed this skill properly.

Understanding where your team’s collective strengths and weaknesses lie is important; it will make you more prepared for any change programs that will come your way.


Diversity is important

Don’t be too rigid in skills measurement. Ranking people on the same ‘skills scale’ can lead to predictable hiring patterns and a workforce with no diversity.

For example, innovation is a vital part of ensuring that manufacturers stay viable. But you can't define what makes a good innovator – they don’t all have one skillset. So know the skills you need, but be open to different skills and capabilities too. Not everything is quantifiable.  


Change is a requirement of success

In the broader market, first adopters gain the competitive advantage. That is why your business needs to be a market leader. In a skills context, this could look like making a large investment in ClearSCADA training for key team members when the rest of the market hasn’t adopted it yet.

In 18 months’ time, when everyone else is doing it, you’ll have had that head start and can win new clients based on this capability and experience. 

To do this, you need to stay on top of industry trends and keep communicating with clients and industry groups. Be aware of what others are doing poorly and what they’re doing well, so you know when to make a change.


Skills development is a continuous cycle

The most effective way to ensure your team can respond to future business demand is through constant skills evaluation and development. This includes getting the whole team to think about what is possible and what skills align with current and future organisational objectives.


Continue to develop your employees’ skills on-the-job, invest in training courses, and create an environment that promotes learning and growth.

Read the first blog in this series: How to conduct a skills audit in manufacturing Part 1: Mapping the skills your team needs


Find out how our flexible approach to instrumentation training helped build skills for staff in the Mount Isa Mines.

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