Needs Analysis: Definition, Importance & Implementation

Needs Analysis: Definition, Importance & Implementation
Imed Bouchrika, Phd by Imed Bouchrika, Phd
Chief Data Scientist & Head of Content

To see where the business predicament lies, managers must first conduct a thorough needs analysis. Needs analysis will make it clear whether employee skills or a thorough knowledge of tasks are at the heart of the question, not some specific hiring problems, understaffing, or inadequate equipment.

In the final analysis, a decision that calls for a training solution must come at the back of a properly run process of needs analysis that points to a lack of knowledge and skills as the definite reason for the performance gap. An evidence-based approach to training needs analysis is a highly recommended yet often missing first step in designing training programs.

What is a needs analysis, however?

In this article, we will try to provide the answer, as well as walk you through the steps to execute a winning needs analysis plan.

Needs Analysis Table of Contents

  1. What is needs analysis?
  2. Benefits of Needs Analysis
  3. When to conduct needs analysis?
  4. How to conduct needs analysis?

When business performance takes a nosedive, managers tend to implement a training program hastily. Training programs, however, are always predicated on employee performance and skills issues. What businesses must fear about hastily executed and unstructured training is that it may well prove to be an exercise in unnecessary education, further contributing to accumulating business woes (Carlisle et al., 2011 cited in Holloway et al. 2018).

One of the biggest obstacles learning professionals are facing right now is identifying the difference between training issues and performance issues. For example, issues in performance or productivity are almost always addressed by the training programs provided by the company or organization.

While standard training programs are designed to be helpful, they are not meant to resolve all productivity or performance problems regardless of how good a training program is. Training programs are not cookie-cutter solutions, that is why a thorough needs analysis is necessary not only to identify what the problem is but also the root cause of it and how to effectively address it.

What is needs analysis?

Needs analysis definition involves the process of identification and evaluation of needs. It is the first step that should be taken in order to successfully develop an effective training program (Bleich, 2018). It is a vital process that helps businesses determine the specific training and training period they need to provide their employees for them to become productive and efficient (Morrison, 2020).

Needs assessment vs. needs analysis vs. training needs analysis

Needs analysis and needs assessment are often used interchangeably, but instead of being synonymous terminologies, they play different but related roles in the process of identifying performance issues and/or opportunities and analyzing if training is necessary to address them or not (Christensen, 2018). Christensen further explains that needs assessment, needs analysis, and training needs analysis refer to key steps in the process of determining “value-added solution” to a performance problem. These steps, however, can be tricky when terms are “misunderstood and used incorrectly” as the process offers a systematic approach, which involves a proper transition between steps in order to achieve positive results.

Christensen (2016) also developed a concept map that reveals the roles of needs assessment and analysis in the process of identifying problems and/or opportunities begins by conducting a needs assessment, which employs needs analysis in the process to identify skills or knowledge gaps. By conducting a needs assessment, an organization will be able to figure out which performance problem or opportunity needs training intervention and which does not. If there are issues that are recommended for training intervention, the next step will be to conduct a training needs analysis to figure out what type of training should be provided.

Additionally, the term “training needs analysis” refers to the process of gathering and analyzing to determine the training needs an organization has to provide to its employees (Reed & Vakola, 2006). Carlisle et al. (2011, p. 688) define training needs analysis as a “methodological investigation and analysis into an organization’s current and desired performance levels, focusing heavily on the ability of its staff and their support networks.”

Benefits of Needs Analysis

Needs analysis offers an array of benefits to organizations such as the following (Morrison, 2020):

  • Identify knowledge and skills gaps. Needs analysis helps organizations become proactive in approaching potential issues before they become actual problems. Being able to figure out the gaps in employees’ knowledge and skills before these gaps start creating real issues that can affect the organization is just one of needs analysis’ important benefits.
  • Helps prepare training ahead of time. Planning the training programs for an entire organization is not an easy feat. But instead of simply assuming the types of training that should be included, training needs analysis helps an organization make informed decisions based on actual and accurate data.
  • Identify the areas that need to be prioritized. Despite knowing what types of training should be included in the training schedule, there is still the issue of which training is more urgent and which is not really needed at the moment.
  • Identify the individuals who need training and the type of training they need. A training program will not be effective regardless of how good it is if it is not directed to the right individuals. Training needs analysis help in this area by identifying the individuals who need further training and what training programs are appropriate to address their knowledge or skills gaps.

Source: GP Strategies; Statista

When to conduct needs analysis?

Training needs assessment, which involves the process of needs analysis, can be conducted anytime but is often implemented during the onboarding period, performance reviews, promotion consideration, and when there are changes in the organization that require employees to change job roles. It is, however, important to conduct needs analysis periodically not only to determine the training needs of an organization or its employees but also to assess the effectiveness of training programs (SHRM, n.d.).

According to the study conducted by TalentLMS (2019), 39% of employees in the United States receive training during onboarding and this helps new hires feel better about how they would perform.

Source: Talent LMS

How to conduct needs analysis?

For human resource degree holders, conducting a needs assessment is made easier with the use of Strengths, Weaknesses, Opportunities, Threats—S.W.O.T.—analysis to help shed light on the issues and bring to focus the areas that need to be examined more closely. S.W.O.T. analysis is useful in performing a needs assessment in the areas of compensation and employment benefits (Universal Class). In order to conduct an effective training needs analysis, there are three important factors to consider (Bleich, 2018):

1. Identify the type of training needs analysis that should be used

There are three standard types of training needs analysis, which are following (Bleich, 2018):

  • Knowledge. This type of analysis is helpful in assessing employees who are new graduates to give you an idea of how broad their knowledge base is, especially in terms of company regulations, issues related to compliance, procedures, best practices, and more.
  • Skills. The skills covered in this analysis include both practical and soft skills. This targets both junior and senior employees.
  • Abilities. This analysis looks into the employees’ critical thinking and decision-making abilities and how they manage themselves to become more action-oriented.

2. Identify the appropriate needs analysis tools

The tools vary and not every one of them is appropriate for every organization’s use. The best way to choose which suits your organization best is by identifying your company’s goal or reason behind conducting a needs analysis. Below are some of the popular tools and/or methods (Bleich, 2018):

  • Questionnaires. Although not as reliable as other tools and methods, using questionnaires can provide a snapshot of how the employees feel about the company and what kind of training they expect.
  • Observation. This requires more than one observation session scheduled and unannounced in order for the observer to witness and assess the employees in action.
  • Interviews. This method mainly focuses on managers and supervisors to gain insight into the performance issues of the employees under them.
  • Work assessment. This involves examining the quality and quantity of output produced by particular employees.
  • Online assessment. This method consists of tests or a series of tests to assess an employee’s knowledge using online, multiple-choice questionnaires.
  • Competitive analysis. Knowing where your organization stands in comparison with your competition helps identify the areas your organization lacks and/or excels in.

3. Implement the necessary steps

According to Legault (2018), there are three steps involved in an effective needs analysis but we can divide them further into four:

  • Determining the desired outcome. This step looks into the desired performance of employees or desired business outcome. In order to get the necessary information, some of the most reliable sources are the managers and supervisors, documentation related to jobs and duties, and performance and training evaluations.
  • Determining the current outcome. Knowing the desired goal in terms of performance and business outcome leads to the next step, which is identifying the actual performance of employees to see if the goals are being met. This step can be conducted by using observation and interview methods, as well as by looking into performance metrics and reports.
  • Determining the cause of performance gap and the appropriate solution. Once the issue is identified, the process of digging into its root cause begins. This process involves investigating the factors that can affect the performance of employees, such as knowledge and skills, motivation, tools and equipment, etc. Knowing the problem and what causes it makes figuring out a viable and effective solution easier.

Does needs analysis provide resolution to every problem?

It is important to note that the main goal of needs analysis is to identify the underlying issues that affect performance and provide the appropriate training as a solution. Wilson (2020), however, states that training will not resolve a performance or productivity issue if the root cause is not the gap in the employees’ knowledge and skills.

An effective needs analysis also identifies the company’s role in the employees’ performance and productivity problems that are not training-related, such as ineffective standard operating procedures (S.O.Ps.), usability of applications and tools, outdated equipment, company policies, and others. While these issues may not involve training, needs analysis helps bring them to light in order to help upper management bridge and address the situation from their end.

For a more interesting read, you may also want to check out our guide on organizational leadership master’s degree programs.



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