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The canyon between a company's current situation and its projected goals can span miles. Effective gap analysis can identify problems and successfully bridge that canyon.
Gap analysis has become a central player in human resources. In fact, seminars sponsored by the world's leading HR organizations have rated gap analysis as a leading HR issue.
As part of the strategic planning process, gap analysis consists of defining a desired state, identifying the current situation and comparing the two to identify gaps. By focusing on the big picture, defining gap analysis and the reasons behind it, the process and scope involved, the various uses of the output and evaluating results, gap analysis will be explained.
Big Picture
To succeed today, employers need to focus constantly on reinventing their businesses and themselves. In Value Migration, published by the Harvard Business School Press, Adrian J. Slywotzky stated that in the 1980s, "The historical leaders in business computing lost $55 billion in market value while four newcomers gained $80 billion. While many traditional department stores were struggling, the value of five new retailing business designs grew by more than $100 billion." In The Profit Zone, published by Times Business in 1997, Slywotzky said, "Creating sustained value growth requires re-inventing the business design as frequently as every five years."
The following questions help focus on the people issues while re-inventing businesses: * What is the ideal work force to support the business strategy?
* How does the current work force fit in?
* Do HR programs support the ideal work force?
* What is the financial impact of HR programs on compensation and benefit costs? On the business? On productivity? * What changes will improve productivity? A generalized model is offered to help us in focusing on these issues. (See Figure 1.)
What Gap Analysis Is and How to Do It
Gap analysis is a key part of strategic planning. It is necessary to focus on the ideal state by comparing it to the existing state to identify gaps. Information about the existing state should focus on both internal and external data. The internal data should include information about the operation and costs of current programs, and about the demographics of the employee population. External information offers warning about...