Assessing Workforce Training and Development Needs

A guide for SME business owners

Small- to medium-sized enterprise (SME) business owners are in a difficult position when it comes to learning and development. Big companies often have dedicated human resources teams, with specialist learning and development leads. SMEs often have an owner who, by default, is responsible for ensuring their workforce has the skills to deliver the business they are trying to grow. With so many competing roles and responsibilities, we can end up reacting to training and development rather than planning it.

Training is meaningless if we give it only superficial attention just to tick a box. Our business strategy should guide our capability needs. To drive impact and successfully achieve desired outcomes, we must understand what training and development we need, who on our team needs it, and why. A well-organised learning needs analysis can clearly identify capability needs, enabling us to coordinate and deliver training that aligns with current operational needs and future strategic goals.

Understanding the initial steps and their implications is essential to conducting a meaningful, purposeful analysis. This article guides us through the process and encourages us to ask thoughtful questions, so we stay focused on our goals and can make informed decisions about growth, employee performance, and the future of our business. If you’ve been delaying this or uncertain about how your efforts measure up, keep reading. By the end, you’ll have clarity and be prepared to take action.

Find direction

Before we design or commission training, we will need to revisit our business strategy. Training and development should always be based on real needs, not a wish list driven by assumptions about what we, or our staff, believe is a priority and required.

To establish genuine training and development needs, we must adopt a systematic approach that gives us direction, helps us ask better questions, and enables us to gather evidence to validate, challenge, and refine our ideas and assumptions.

Getting started is relatively easy, and comes down to two simple questions: What is the business trying to achieve?  What must people be able to do better or differently to make that possible?

When answering these questions, it is essential to look beyond the current situation and focus on future opportunities and the potential for our enterprise to grow. The business world moves fast; we constantly need to adapt to emerging markets, industry changes or new opportunities. Training focused on immediate issues addresses only short-term problems. It might be a quick fix, but it won’t ensure staff are adequately prepared for our future business needs.

Whatever our strategic goals are—whether that’s revenue growth, market expansion, digital transformation, innovation, stronger leadership, or operational efficiency—clarity enables us to determine the skills, knowledge, and behaviours needed to deliver those outcomes. This critical initial phase lets us evaluate existing skill sets, identify gaps, and determine how training can address them.

If we were to name this process, it would be called a learning needs analysis, or an LNA for short. Its purpose is to help us move from broad strategic aims to specific capability requirements.

When we talk about capabilities, we are not just referring to skills, but to knowledge, professional behaviours, mindsets, and proficiency in using tools and systems. Many capabilities will be tied to our strategic goals, so we need to see the bigger picture and look beyond technical skills and the competencies needed to meet regulations and ensure compliance. To future-proof our business, we also need to consider the capabilities required to lead and manage business operations, make decisions, analyse and manage data, safeguard well-being, drive quality improvements and sustainability, and deliver excellent service.

Define anticipated outcomes

Having defined our strategic objectives, the next step is to clearly identify the critical tasks that must be performed effectively to achieve the desired outcome.

To do this, we need to ask ourselves: What specific behaviours, outputs and results must consistently occur for success to be inevitable? In other words: What must team members do, demonstrate, or deliver day-to-day, individually and collectively, to turn our strategy into a reality?

In essence, we are identifying behaviours that will drive performance. We can’t expose capability gaps unless we know what we are looking for, nor can we identify the expected levels of competence in each role, or the key performance indicators and metrics that reflect progress or success.

This brings us to the next question: What level of competence is most likely to make a meaningful difference to day-to-day practices, future business growth, and what will differentiate us competitively?

Because whatever our strategic goals and aspirations, training and development will only make a difference when they change what people do and build capabilities our competitors don’t have.

Understanding these questions matters because, without answers, it’s hard to identify skill gaps or decide what to prioritise based on industry needs and what benefits the business most. Therefore, we need to review job descriptions and established industry competency frameworks, compare them with our own vision, and assess the desired performance standards and evaluation criteria. In due course, competence and performance become our benchmarks and a practical reference point for decision-making, assessing progress, and driving business transformation.

At this stage, our thinking is provisional and should be viewed as a working hypothesis. Our business strategy provides direction and helps us formulate better questions, giving us a solid starting point. Completing a learning needs analysis is iterative, and we will inevitably revisit these ideas to add detail and insight as we progress and gather more information.

Throughout this process, it is advisable to consult our leadership team about our strategy and intentions, not least because training is unlikely to succeed if they do not understand the rationale for the capabilities that need to be developed. As we will soon appreciate, team leaders play a critical role in embedding learning in practice and driving cultural adoption of best practice by reinforcing professionalism and day-to-day practices, building confidence, and coaching others to develop new knowledge and skills.

Leadership involvement enables us to engage with diverse ideas and builds support for our vision. Without early support from team leaders for our strategic plans and intended training and development, we will lose impact, and outcomes will be severely affected. However, we must not overlook the need to evaluate leadership capabilities, because training is never effective if team leaders don’t have the capabilities we intend to reinforce across the rest of our workforce.

Although we may know our teams well and have some ideas about their capabilities, competence, and where gaps exist, we cannot rely on assumptions or individual team members’ perceived levels of confidence. These perceptions have their place, but we need to test them against evidence.  Evidence gives us a fuller picture, reduces bias, and helps ensure we don’t overlook anything. Documenting our ideas clearly from the outset makes it easier to test our assumptions rather than treating them as facts.

Establish the evidence

Systematically gathering and scrutinising evidence from multiple sources of existing data is essential if our training intentions are to be valid. If we are clear on what we are looking for, we can recognise it when we see it. We probably have more evidence at our disposal than we realise. Performance metrics, appraisals, client feedback, process audits, operational logs, and meeting minutes are examples of data sources we can use. We should also gather additional insights through conversations, surveys, observations, and focus groups with staff, clients, and other stakeholders, because these often capture human factors like engagement, team dynamics, communication challenges and environmental constraints that can affect performance and delivery of strategic outcomes.  

At this stage, we need to ask: Which relevant data sources are available, and what additional information might we need to inform our decisions and identify capability gaps?

This is important because it helps us plan this stage effectively and collect relevant information. Only with a comprehensive data set can we map the capability landscape and assess whether our strategic ambitions align with workforce readiness.

As separate artefacts, each data set may not tell us much, but together they tell a coherent story that helps us see the bigger picture. We get spot trends about behaviours, capabilities, quality of service, friction points, strengths, operational reality, productivity, consistency, confidence levels, motivations, engagement, and culture. By pulling together intelligence sources, we can identify existing capabilities and uncover high-value strengths, untapped potential, inconsistencies, hidden gaps, and opportunities.

When we scrutinise the data, we may feel we clearly understand the individual and collective capabilities that need developing. However, before we label these as a capability gap, we need to be sure the evidence reflects that accurately.

This brings the need to pause and ask: How can we prove this is a genuine capability gap, or that a process gap is getting in the way?

We can only justify these as required capabilities when we’re sure individuals aren’t constrained by ineffective processes and systems, operational bottlenecks, unclear expectations, poor communication, limited tools, or a lack of support.  This is where data from surveys, audits, observations, logs, and focus groups is valuable.

How our work is designed, how processes flow, and how often they create inefficiency will affect performance and outcomes. Individuals may struggle to perform because of broken processes, which no amount of training can fix. We can’t overlook process gaps; we need to address these first, then assess capabilities. This way, we can be sure we develop the right capabilities, give everyone a fair chance to succeed, and stay aligned with our strategic goals. 

Crystalise priorities

After aligning future needs with current capabilities and recognising gaps, we may feel prepared to consider training needed to address those gaps. However, we’ll likely generate a lengthy list, with some capabilities standing out more than others; some may need to be developed sooner than others, and not everyone will require development across all areas. Consequently, prioritising the most critical capabilities with the greatest impact is the most sensible approach.

This helps us avoid treating everything as equally important, prevents guesswork and emotional or subjective prioritisation. It gives us direction, clarifies significance, and helps us build capabilities within the context and constraints of our business, including budget, technological and physical readiness, dependencies and internal and external risks. We also don’t want to overwhelm ourselves. From a leadership perspective, we want to avoid spreading our energy too thinly; other aspects of the business will demand our attention. We also want to avoid overwhelming staff; excessive training can cause cognitive overload, decrease retention, and lower productivity and engagement, as people lack time to apply what they’ve learned before new training begins.

Hence, we need a structure that helps us make decisions we can justify and communicate transparently. So, as we review our list of capabilities for enhancement, we need to ask: What is crucial right now (within the next 12 months), what is needed in the near future (within the next 24 months), or what is not essential but would be a nice-to-have bonus?

To confirm that the key capabilities are crucial and/or to refine our list if needed, we should ask: Does this capability align with our business goals? If not, it’s not a priority. If yes, we must consider: Does lacking it pose compliance risks, affect customer experience, hinder business growth, or diminish our competitiveness? If the answer is yes to any, then we should treat the capability as one of our top training and development priorities.

Now that we’ve outlined our priorities, it’s a good idea to take a fresh look at the training options we already have in place. We want to avoid duplicating effort or relying on training that no longer meets our needs. While our current training methods, providers, and content may still be useful and support our growth, they can become outdated as the business evolves. Some aspects might no longer address important capability gaps. By reviewing what we already have, we can decide what to keep or improve, and where to start afresh. This way, we make sure we’re always heading in the right direction.

One final thought: A good learning needs analysis should help us identify capabilities we thought were missing but aren’t, capabilities we didn’t realise were critical but are, individuals who are underutilised yet have growth potential, and determine roles that may need to be redefined and processes that need improvement.

If we are uncertain or unclear at this stage, we may need to review certain aspects. Remember, a lack of clarity at the end of the process can hinder our ability to design a tailored training and development plan. A clear plan is essential if we are to allocate resources effectively, build the right skills at the right levels, and achieve results that support our goals and deliver a return on investment.

Assess the timeline

The timeline for undertaking a learning needs analysis varies based on the size and nature of our business, and the variability of roles within our workforce. It also depends on data accessibility, whether we need to gather more, and the availability of individuals we can consult for support or delegate tasks to.

A realistic timeframe would be 4-6 weeks, long enough to gather meaningful insights yet short enough to maintain momentum. This would allow a week to clarify goals, gather evidence, analyse roles, map capabilities, prioritise them, and translate gaps into learning requirements.

This represents a significant demand on our time, so before we begin, we need to ask: What time do we realistically have available to conduct a meaningful analysis? Then, before proceeding further, we need to consider: Who can we involve or seek support from to ensure the process is thorough without disrupting operations, service, and business continuity?

Thoroughness is key because a learning needs analysis is not a one-off exercise. At the end, we will have produced a working document that will support immediate and future decisions not only on training but also on hiring, succession planning, and quality improvements. We can revisit, update, and use it as part of our annual business review. It’s worth the effort on many levels; clarity here will help us decide how best to allocate resources and determine what training and development opportunities we can deliver internally versus what we would need to outsource.

While this analysis runs in the background, it gives us the opportunity to read on, finish Part 1, and strengthen our understanding of adult learning principles. This way, when planning or designing training programmes, we can confidently integrate these principles to create more relevant, practical, and effective training aligned with our goals.

Get an early edge, build momentum

Getting started with these processes isn’t as daunting or intimidating as we might think, and we can do it right now. Here’s a simple exercise to begin with, designed to stimulate thinking and motivate action.

Identify 3 strategic objectives that has the potential to be enhanced through training and development. For each outcome, note why training and development matter, what current evidence suggests it’s a priority, and what further evidence would be needed to validate or refine thinking.

Hopefully, completing this will reduce some of the ambiguity around learning needs analysis. Now that we’re no longer staring at a blank page, working out what to do next should feel much easier. This should give us the confidence to take the next step and begin a more detailed analysis, as described here.  

Written by Dr Cheryl Whiting, EdD, © August 2026

Thank you for taking the time to read this article. As always, I welcome your thoughts and feedback. Whether it’s a question, a shared insight, a suggestion for improvement, or a request to cover a particular topic in my blog series, please do get in touch.

This article is part of a blog-to-book series. Train Better- Spend Less! is coming soon. An SME business owners guide toward effectively developing a professional workforce even when budgets are tight. Stay tuned!