Facts About Gap Analysis - And Why It Matters to Companies

One of the most popular and effective techniques for identifying areas for improvement in an organization, learn all about gap analysis and its key features here.

gap analysis

What is Gap Analysis?

A gap analysis is an evaluation performed by companies on their employees to identify skills and experience gaps that may exist between what employees currently know or can do and what is needed for the company to achieve its strategic objectives.

It involves comparing the current abilities of employees with the required skills and experience to achieve organizational goals.

Gap analysis can be used to identify training needs, identify areas where employees need additional support or assistance, and determine measures that should be put in place to close any skill gaps that may exist.

The Purpose

So what’s the purpose of using gap analysis? It’s very essential for business planning and strategizing. It can help you identify where your company stands in terms of its capabilities and where it needs to improve to reach business goals.

Furthermore, gap analysis can also be used for evaluating the effectiveness of your current business processes and strategies hence allowing it to flourish and grow effectively.

SWOT vs Gap Analysis: What’s the Difference?

SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, and gap analysis may seem quite similar to each due to their focus on performance and assessment. However, several distinctions can be made between the two:

  1. SWOT analysis is a strategic planning tool used to identify and assess a company’s strengths, weaknesses, opportunities, and threats. Meanwhile, Gap Analysis is a performance management tool used to identify and assess the gaps between current and desired performance levels.
  2. SWOT analysis is typically qualitative, while Gap Analysis is typically quantitative.
  3. The output from a SWOT analysis will help identify areas where a company should capitalize on its strengths, improve on its weaknesses, exploit opportunities and defend against threats, while the output from a Gap Analysis will help identify specific areas where improvements are needed to achieve desired performance levels.

What are the Types of a Gap Analysis?

There are various types of gap analysis. It is essential to know each one to efficiently apply them in a business setting. These are the following:

Product Gap Analysis

A product gap analysis is a process that assesses the state of the market and the readiness of the target market to identify gaps in the product’s features, branding, launch plan, and promotional activities.

This analysis can help a company identify real opportunities in the market and leverage them to their fullest potential.

Financial Gap Analysis

A financial gap analysis is a great way to see where your company stands financially and where it wants to be. You don’t need a complex tool like a spreadsheet to do it – all you need is some basic knowledge of finances.

Financial gap analysis can look at any goal, such as sales targets, resource ROI, budget reduction, and more.

Performance Gap Analysis

A performance gap analysis can help you identify how well your business is doing compared to where you want it to be. It compares your current performance to the projected results if things stay the same.

This information can help you develop an action plan to shift performance so you reach your desired goals.

Human Resource Gap Analysis

HR managers use gap analysis to refine and improve their departmental processes. One example is a skills analysis.

Management can be used as skills analysis to help identify what are the missing skills and potentials that the current team needs to be able to attain the project goal. When this is identified, you will be able to create the proper decisions on how to fix the gap.

Needs Gap Analysis

Like a skills gap analysis, a needs gap analysis looks at what a company needs to reach a goal—not just staff skills.

This analysis includes everything required to fill the gap between the current state and the future goal, such as resources (equipment, knowledge, budget, compliance) so that nothing is overlooked.


Gap analysis is essential in any company hence why it is used in various applications. Below are the following gap analysis examples:

  • Product Launching – Companies need to conduct a gap analysis before launching a new product in the market. This will help them identify the areas that need improvement and also the areas where they are already excelling.
  • Strategic Planning – Conducting a gap analysis is an important part of strategic planning. It enables businesses to identify the areas where they need to make improvements to reach their goals.
  • Business Process Improvement – Gap analysis is also commonly used for business process improvement initiatives. By identifying the areas where there are gaps between the current state and the desired state, businesses can focus their efforts on closing those gaps.
  • Sales Performance – Gap analysis is used to identify the discrepancies between the target sales performance and the actual sales performance.
  • Resource Allocation – Gap analysis can be used to identify the discrepancies between the planned resources and actual resources.

Frameworks Used For Gap Analysis

To make gap analysis application easier, several frameworks can be used:

  • SWOT Analysis: SWOT analysis is a strategic planning tool used to assess the Strengths, Weaknesses, Opportunities, and Threats of an organization.
  • Fishbone Framework: The Fishbone diagram, also known as the Ishikawa diagram or cause and effect diagram, is a graphical tool used to organize thinking about how different factors might contribute to a particular problem.
  • McKinsey 7Ss Framework: The McKinsey 7Ss Framework is a strategic planning tool that helps assess an organization’s strengths and weaknesses. It consists of systems, strategy, structure, shared values, skills, style, and staff.
  • PESTEL Framework: The PESTEL Framework is a framework that stands for Political, Economic, Social, Technological, Environment, and Legal factors. It is used to assess the potential impact of these factors on an organization.

How is it Performed?

There are 8 important steps to remember when conducting gap analysis:

  1. Define the problem or opportunity that needs to be addressed
  2. Determine what data is needed to understand the current situation
  3. Collect and analyze the data
  4. Identify where there are gaps between the current situation and the desired goal
  5. Develop solutions to close the gaps
  6. Implement the solutions
  7. Evaluate the results
  8. Refine the process as needed

Gap Analysis with SafetyCulture (formerly iAuditor)

Gap Analysis helps identify and evaluate the gaps between an employee’s actual performance and the desired performance. It is also used by businesses for business planning to determine the areas where they need to improve to meet customer needs hence why SafetyCulture is the perfect tool for this!

Why? Because with SafetyCulture, users can quickly and easily identify the specific areas where they need to improve, as well as track their progress over time. Additionally, SafetyCulture provides users with a wealth of actionable data that can be used to make informed decisions about how to close the gaps in their performance.

This tool can be used to create gap analysis templates and other online checklists to ensure they are meeting customer demands,  quickly and efficiently.

SafetyCulture Content Team
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SafetyCulture Content Team
The SafetyCulture content team is dedicated to providing high-quality, easy-to-understand information to help readers understand complex topics and improve workplace safety and quality. Our team of writers have extensive experience at producing articles for different fields such as safety, quality, health, and compliance.