3 Ways to Diagnose Internal Capability Shortages

Border closures have led to a pronounced skills shortage in Australia. Without international students and workers from abroad, businesses are struggling to hire enough talent. Furthermore, the labour constriction is creating upwards pressure on asking wages and people demanding increased flexibility in their working arrangements.

To solve these significant challenges, businesses must focus on building from within. But where do you start? The first step is to diagnose your internal capability shortages. 

We’ve put together several strategies to help you overcome your personnel deficits. With a capable, competent team, you can carry on with your goals, despite these temporary setbacks.

1. Skills/Workforce Assessments

One method of diagnosing your internal capability shortages is to conduct a skills or workforce assessment. 

What is a skills assessment and why is it important?

Skills assessment tests are bespoke evaluations that are typically used as hiring tools. However, you can also use them to monitor and determine skills in your existing workforce. Information gleaned in the assessment can help you ensure that your people have the right competencies to succeed in their positions. Additionally, you can identify opportunities for training, development and better collaboration across departments. 

Assessing the capabilities in your existing workforce may also highlight skills shortages. You may be able to train current employees in areas where you lack competency, or invest in microtraining to boost internal learning and upskilling.

How to conduct a skills/workforce assessment

The best way to initiate a skills/workforce assessment is to hold a meeting with managers to explain the process. Hiring an outside evaluator can make the process more comfortable and objective, and it will free up your staff to continue their critical work.

Next, decide on the skills you value as a company, both for the present and future. As you brainstorm, consider your past job descriptions, business objectives and company values. Also, think about the skills you’ll require in the coming years. You might want to survey team members about what skills they feel are missing from the current workforce. Their insights could prove invaluable, and involving your staff helps them feel ownership in the company’s growth.

Decide how you’ll measure your results. You could use:

• Surveys
• Assessments
• Interviews
• Performance reviews.

How to implement the findings of your skills gap assessment

Once you gather information from your surveys, inspections, interviews and performance reviews, it’s time to fill the gaps. You can do this through hiring or training. And since you’re probably reading this because you’ve struggled to hire, it’s time to think about adding to your existing staff’s skills.

2. Operating Model Reviews

Another method of ascertaining your company’s capability shortages is operating model reviews. Let’s take a look.

What is an operating model review, and why is it important?

An operating model is a blueprint of a company’s business vision that aligns operating capacities and strategic goals. It also supplies an overview of the following:

• Key business capabilities
• Internal factors
• External drivers
• Operational levers
• Organisational structure
• Technology
• Information resources.

In today’s constantly-changing business environment, it’s critical to redefine what’s next and then construct a sound operating model that will help you land on your target.

How to conduct an operating model review

How is your current operating model performing? The following steps can help you conduct a review:

• Identify weak points in your recent delivery of capabilities 
• Devise design principles for changing the way you deliver your capabilities 
• Review your personnel structure
• Implement your recommended changes.

Our consultants can help you review and make changes to your operating model, providing valuable guidance and support.

How to work towards your target operating model (TOM)

A Target Operating Model (TOM) doesn’t materialise overnight. It’s a result of several weeks or months of data gathering from the bottom up. For a thorough understanding of your organisation, you may want to hold interviews, workshops and envisioning sessions before you embark on your analysis.

However, if you need to move faster, you could adopt a simplified strategy for designing the TOM. 

Your team could compile a straw model using existing information collected from envisioning sessions and other program-level artefacts. With the straw model as a springboard, hold discussions with essential program personnel who can either validate the model or provide critical feedback. At this point, you’ll have enough information to hold workshops to refine the straw model into the TOM.  

3. Capability Benchmarking and Uplifts

The third way to diagnose internal capability shortages is to use a capability benchmarking approach.

What is capability benchmarking, and why is it important?

With capability benchmarking, companies improve their performance by describing and applying best practices for your industry. By comparing your performance against the achievements of competitors and best-in-class organisations, you can better understand which processes will help you achieve your objectives.

The goal of benchmarking is to find models of excellent performance and then adopt the processes and practices that help you rise to that level. While it can be humbling to compare your operations with those of prominent companies, it’s helpful to think of benchmarking as an exercise of innovating, not imitating.

How to conduct capability benchmarking

Conducting capability benchmarking shares some similarities with the two methods previously mentioned. Here are the steps:

• Select a process or product to benchmark
• Identify the primary performance metrics
• Choose internal areas to benchmark
• Collect data on performance, processes and practices
• Analyse the data
• Identify targets for improvement
• Implement the best practices through setting reasonable goals
• Achieve company-wide acceptance.

How to use your findings to uplift capability

Through going through the process mentioned above, you will lift your company to a higher level of functioning. How do you know if you’ve implemented a review successfully? Try using MetaPM’s 3PM Maturity Optimisation Matrix template. 

Assistance Through Training and Microlearning

Australian businesses have dealt with many challenges in recent times, and diagnosing internal capability shortages can seem like a daunting task, however necessary it is.

Leveraging assistance through training and microlearning can help you determine your weak spots. If you determine that some of your employees need to improve their qualifications, provide micro-credential training for them. They’ll have digital proof of their new competencies, giving them confidence as they fulfil your capability shortages. 

In the long run, diagnosing and addressing your capability shortages will strengthen both your employees and your organisation as a whole. For assistance with the process, contact us at MetaPM. We’re here to support your success.