It’s hard enough to put together an engineering team to tackle the upcoming sprint. But rapidly evolving technology, developments in generative AI, changing organizational objectives, and a shifting skills landscape, means engineering leaders must constantly ask themselves if they have the right set of capabilities on hand, not just for now, but looking into an uncertain future.

It doesn’t help that demand for tech talent is set to outstrip supply until at least 2026, according to research firm Gartner, with the IT skills shortage reaching “critical” levels, particularly in key areas such as data science, software engineering, and cybersecurity. The recent wave of tech layoffs is unlikely to make life easier for engineering managers.

This is why staying ahead of the problem by constantly identifying and filling capability gaps is essential.

How to identify capability gaps in your team

A capability should be thought of as more than just an individual or team skill. It also implies the ability to execute and achieve an outcome, both collectively and individually.

There are multiple free templates and tools available to help leaders carry out a capability gap analysis for their organization. These hinge on establishing an organization’s current capabilities, identifying where it is they want to get to, and the capabilities this will require. 

Leaders must then devise a plan to close the gaps. This can include dropping redundant or irrelevant capabilities. A good capability gap analysis should be evaluated over time, to ensure it stays up to date. 

A more informal take on the process could be described as a “reverse Conway’s law”, whereby an engineering leader establishes the skills or capabilities needed to deliver a future product or achieve an outcome and works backward toward their current organization.

Where to start

The first step towards identifying capability gaps is to be clear about your organization’s overall strategy and vision. Ultimately, that long-term vision is the responsibility of the senior management team, while short-term vision can lie with individual product teams or product managers.

Alexis Cheshire, IT director at the private Hurlingham Club in London says, “My eyes are open looking for gaps the moment I walk into an organization for an interview. Because I want to know if the problems are at least ones I can fix, or if it’s something a bit more fundamental.”

Cheshire’s starting point is often a cyber risk assessment. “That gives me a view of process, structure, and quality of work. Then you start asking questions to the business about valuation. ‘Well, if your sales go down for an hour, how much is that going to cost?’ The recovery point objective needs to be less than that.”

A tech leader also needs to have a grasp on where technology, in general, is going, says John Harris, CTO at GT, which provides off-shore product teams to high-growth companies. Tech leaders should be constantly tracking currents in the industry by learning from others, attending networking events, joining advisory boards, or simply reading around the topic.

Randy Russell, director of certifications at Red Hat, says negotiating skills shortages and gaps is more difficult than ever as technology changes in leaps, not increments. “Things like AI, ML, and data science require an entirely different way of thinking about the problems an organization is trying to solve.”

Harris says a shift towards product disciplines has helped change the way many organizations think about developing their capabilities. “You have a business product roadmap with the releases, you work back from those releases, etched in stone, make sure that everyone around the room is contributing to them. Then you build your skills base accordingly.”

Cockroach Labs’ vice president of engineering, Isaac Wong, outlines a more formal enterprise-wide approach. His organization has a bi-annual planning process aimed at identifying which skills the team is missing.

Product teams identify and prioritize the most pressing problems to solve, and then work with the engineering teams to build out high-level execution plans to solve them. “Those plans identify work, dependencies, and other capabilities that are required. This is placed in a document and any required resources, people, or capabilities are reviewed and a plan is made to resolve those gaps.”

For example, if an organization is shifting applications to the cloud, how do they rethink their developer and operations skills, especially around the major cloud platform vendors and popular tools like Kubernetes?

Filling gaps from within or externally?

Once you’ve identified your capability gaps, you then need to establish the best way to fill them. Does it make sense to promote or upskill internally, or recruit externally? A particular skills gap might not automatically equate to a permanent role if the need is short term.

A big data project might need short-term help around database tuning, for example, so it might make more sense to turn to a contractor. Likewise, developing a quality control system could require a computer vision expert, but it might not be needed once the system is operational.

As Cheshire asks, “Is that a tactical short-term contract gap? Or is it a permanent role I want to bring in and maybe develop to fill the gap over the next 12 months? It's almost like an investment portfolio with different time horizons.” 

For Wong, it makes sense to develop internal talent as far as possible. “Existing employees have the culture, collaboration, and social skills we are looking for,” he says.

Network effects

When it comes to recruiting or finding contractors, informal networks can play a huge role. “The network is your way of learning and helping one another. Pay it forward, wherever you can,” says Harris.

At the same time, managers should be mindful of the potential pitfalls of informal networks. Wong says they can be great for areas that are already a core competency for you, but new competencies might require a broader outlook. “There is a risk that an over-reliance on informal networks and personal recommendations reduces diversity,” he says.

Should you use recruiters?

That need to take a broader look is where good recruiters can be invaluable in helping manage capability gaps. 

For the toughest-to-fill roles, recruiters and reputable head-hunters can be worth every penny, both in terms of broadening your talent pool and saving you a lot of time. “They have incredible networks. They all have the skills and techniques to find the right people quicker than you will yourself,” Harris says.

HashiCorp’s manager for recruiting in EMEA, James Footman, sees recruiters as the “windows to the market, they’re speaking to hundreds of professionals every week”.

What HR can do for you

It can be all too easy to forget the role of human resources (HR). The HR department can play a valuable role not just in identifying skilled internal and external candidates, but in ensuring they are a good fit with the organization as a whole and that they stay with you for the long term.

“The focus on HR for us is making sure that our top talents that are working with our client teams are happy and have what they need,” says Harris.

HR can also play a critical role in controlling unconscious biases, whether in terms of experience, or diversity characteristics like gender or ethnicity. “Database engineers may be really good at hiring database engineers, but not so good at hiring front-end engineers,” Wong says.

Smaller organizations are less likely to have access to in-house HR resources. However, Harris points out, a good recruiter or partner agency can help plug the gap, and depending on the depth of the relationship, should have a good understanding of your company culture.

Standalone HR consultancies can also relieve tech leaders of legal and compliance headaches, which will free them up to focus on culture and other softer issues.

Cards on the table

HR can play an important role when it comes to negotiating and communicating an offer when you’ve found the right person, whether that’s an internal or external hire. Where an organization doesn’t have an internal HR team, a trusted recruiter should have an in-depth understanding of what makes a good offer for a given role, and be able to communicate it effectively. It’s in their interest to ensure negotiations reach a successful conclusion.

Offers should be in line with the team a candidate is potentially joining. “Always offer what the role is worth, irrespective of gender, ethnicity, or current salary,” says Footman. “If the individual has passed the interview stages, offer fairly based on the original job requirements.”

Any offer should balance compensation with other benefits, and neither should be overlooked.  This includes considering individuals’ motivation for moving, as well as benefits such as flexible working, and career progression. This should help you fill a capability gap for the long term. 

If the discussion becomes just about money, “you may well not have the right fit,” Harris says.

What next?

Whether we’re talking about established organizations with hundreds of engineers, or a startup with a handful of developers, capability gap analysis is an essential part of the tech leader’s toolkit. 

The process, along with the templates and plans available online, might appear relatively straightforward, but the real skill comes with an engineering leader’s ability to identify the objective, recognize the current state of their team, and work out a strategy to plug the gap between them. This involves a balance of technical knowledge, skillful people management, and the ability to work with trusted partners.