Introduction

Every finance team has a skills gap. It’s not whether they have them, but whether they are aware enough of them to anticipate and manage them. Most often, we find them in the team when a line-of-business head complains about the quality of the financial analysis, a new financial regulation comes into effect, or a staff member leaves the team, taking their expertise with them. The best way for a finance manager to prepare for finance team skill gaps is to anticipate and identify them before they become a problem. 

The challenge of identifying finance team skill gaps is that it requires both analytical rigour and delicacy. People don’t always have a clear awareness of their own skill gaps, and may be defensive if they perceive that skill gap identification is being used to judge their performance. The best approaches to identifying skill gaps are those that are explicitly framed as learning opportunities, involve consultation, and include a follow-up action plan. 

This article provides a step-by-step guide on how to identify finance skill gaps, undertake a finance training needs analysis and respond to skill gaps once they are identified. It’s for finance managers and their learning and development partners, as well as finance practitioners who want to take a lead role in developing their teams. 

Why Skill Gaps Persist — and Why They Matter

The informal feedback loop that misses the gaps

Usually, skill gaps in finance teams are identified through the informal performance management cycle: the finance manager notices that an analyst’s reports are not commercially oriented, brings it up at their performance review, and the analyst attends a workshop. This feedback loop is driven by reaction, not proaction; it is slow and patchy, and it misses gaps that don’t show up in the day-to-day work: gaps in professional and commercial skills that become apparent when the team is asked to do something new. 

•  Technical gaps are typically easiest to spot because they are visible in documents: a model that doesn’t balance, a report that mishandles classification, a cash flow forecast that fails to account for seasonality. 

•  Professional and commercial gaps can be the most difficult to identify informally because they are not visible in deliverables: the failure to challenge assumptions in a business case, the unwillingness to tell an unpalatable financial story, the lack of effort to link financial analysis to a business decision. 

The business cost of unaddressed gaps in how to improve finance team performance

When asked how to build a better-performing finance team, most finance leaders think of processes, technology or staffing levels. The “capability” dimension – the skills of individual team members – is frequently the easiest and most effective lever. A team of analysts who are unable to communicate financial analysis in a way that will influence business decisions is a team that, on average, underuses its analytical capability, no matter how technically superior it is. 

• A workforce skills gap analysis that links skill gaps to business performance demonstrates the business risk and return of investing in workforce development in a way that resonates with the CFO and CEO. 

•  Failure to address gaps in key capabilities (such as sustainability reporting, data analytics or business partnering) creates compliance and performance risks that increase with time. 

Five Steps to Identify and Close Finance Team Skill Gaps

Finance competency assessment is a systematic process that links assessment to the role, draws on multiple sources, and results in an employee development planning finance action plan. The following five steps are based on how L&D and finance leaders go about this. 

Step	What It Involves	Output	Common Mistake
1. Define the competency framework for each role	Map the technical, professional, and leadership competencies required at each level of the finance team; distinguish between entry-level, mid-level, and senior role requirements; define what “proficient” looks like for each competency	Competency framework by role level; basis for all subsequent assessment activity	No competency framework exists; gaps assessed against a manager’s intuitive sense of “good’ rather than a documented standard
2. Conduct a multi-source finance training needs assessment	Combine self-assessment by team members, manager assessment, and 360 feedback from business unit stakeholders; supplement with performance data (deliverable quality, stakeholder feedback, error rates) and results from any technical assessments	Gap map by individual and role level; priority skill areas for the team as a whole	Assessment relies solely on manager observation; self-assessment is not collected; stakeholder feedback is not sought; no data layer to supplement qualitative inputs
3. Prioritise gaps by business impact	Not all gaps are equal: prioritise those that affect the team’s ability to deliver its most important outputs or that create compliance or reputational risk; distinguish between gaps that are wide and critical, wide and manageable, narrow and critical, and narrow and manageable	Prioritised gap list connected to business outcomes; basis for development investment decisions	All identified gaps are treated as equally important; investment is spread too thinly to make a material difference in any single area
4. Design targeted team capability improvement strategies	For each prioritised gap, design a specific, time-bound development intervention: structured training for technical gaps, coaching for professional skill gaps, mentoring and stretch assignments for leadership gaps; connect each intervention to a measurable outcome	Development plan for each team member and for the team as a whole; scheduled interventions with named owners	Development plan designed as a list of courses to attend rather than a capability improvement programme with defined outcomes and application components
5. Measure whether the gaps have closed	Reassess capability against the competency framework six and twelve months after the development intervention; measure whether the identified business impact has improved; iterate the programme based on findings	Post-intervention assessment; updated gap map; evidence that capability has improved; updated employee development planning, finance for the next cycle	Measurement limited to training completion certificates; no follow-up capability assessment; programme repeated unchanged regardless of whether it produced improvement

Step 3 – prioritising gaps by business impact – is the step that makes the difference between an audit of all skill gaps in finance teams and a programme to close them. A finance gap analysis of 30 gaps for a team of 12 people is an audit; a programme to close six gaps that impact the team’s ability to create business value is a capability-building strategy. Prioritisation is the key to efficient development investment. 

Tools, Real Cases, and the Assessment Process in Practice

Practical tools for finance team skills assessment

For most organisations, the most pragmatic set of finance team skills assessment tools includes: a self-assessment survey, directed at the profile of the competency framework; a manager assessment, directed at the same profile; and a discussion with the manager and individual to compare their views and agree on the priority areas for development. The discussion is the key to converting the assessment from an evaluation to a development activity. 

•  Self-assessments are best when the rating scale is based on observable skills rather than general proficiency; “I can build a three-statement model on my own” is better than “I am proficient in financial modelling”. 

•  Manager and stakeholder assessments of the finance team’s business unit partners provide the most externally-validated evidence of commercial and professional skill shortages that can’t be seen from within the finance team. 

Phase 1	Phase 2	Phase 3	Phase 4
Competency Framework Design	Multi-Source Assessment	Development Planning	Measurement & Review
Define technical, professional, and leadership competencies for each role level; anchor ratings to observable behaviours; validate with senior finance leaders; document as the assessment standard	Individual self-assessment; manager assessment; optional 360 from business unit stakeholders; compile results into a gap map by individual and by role level	Prioritise gaps by business impact; design targeted interventions for each priority gap; build the Finance Training Needs Assessment into individual development plans; schedule with named facilitators and owners	Reassess against framework at 6 and 12 months; measure business impact of improved capability; report outcomes to leadership; update development plans for the next cycle

Real cases: lessons from improving technical finance skills

On its first finance competency assessment, a financial services business identified that all its mid-level analysts rated themselves as proficient in financial modelling, but managerial and stakeholder assessments indicated they were not using the required level of scenario analysis and sensitivity testing capability for the business strategy planning cycle. This was not evident in day-to-day task performance – the models balanced and the numbers checked out – but the commercial use of the modelling skill was well below par. A scenario-analysis-only improving technical finance skills course, plus a coaching project to apply the skills to next-business-cycle planning, brought the skills to the required level in 10 months. The lesson: self-assessment data would not have identified this gap; the stakeholder feedback signalled the need for action. 

The second case was a professional services firm that had completed a finance training needs assessment but had not prioritised the 28 gaps identified. The training budget was divided among several training activities, none of which were large enough to make a dent. The firm’s L&D partner made the change: the next year, the budget was focused on two of the most important gaps – business partnering communication and data visualisation – with structured activities, coaching and stretch assignments. Both gaps were improved within 12 months. Finance team skill gaps: focus, not scatter. 

Conclusion

Finance team skills gap analysis is not a point-in-time diagnostic process; it is the start of an ongoing employee development planning finance cycle, linking capability to business performance, development to usage, and investment to return. The finance teams that develop real capability improvement over time are those that have progressed from anecdote to structured finance team skills assessment, prioritisation and investment in development. 

•  High-impact gaps are nearly always invisible: technical gaps are evident in the work and addressed as they occur; professional and commercial gaps are not dealt with because they require multi-source assessment to become evident. 

•  Team capability improvement strategies that prioritise development investment on the two or three most impactful gaps show superior results to those that aim to address all identified gaps; improvement comes through concentration. 

•  For individuals: a finance competency assessment is a process for you as well as your team; realising the gap between where you are and where you need to be, and taking the development investment to close that gap, is one of the best ways to progress your career in finance.