What Is a Needs Assessment?

What Is a Needs Assessment?

What Is a Needs Assessment?

A needs assessment is a tool used by businesses to understand steps that a company may need to take to work more efficiently.

Typically, a needs assessment is used when a company wants to identify gaps or issues within the workplace and find out how to resolve them.

A needs assessment doesn’t have to consider the company as a whole. Depending on the needs of the business, the assessment can be designed to assess a specific department or area which needs to improve.

The information gathered during a needs assessment would then be evaluated to create an action plan.

This plan would aim to close any gaps and resolve issues to improve a business’s performance or better compete with other companies who work within the same markets.

When Might a Needs Assessment Be Required?

There are many reasons why a company may choose to perform a needs assessment.

Some of these will relate to the company as a whole, some may be concerned with specific departments and some may be done on a project-by-project basis.

Examples of when a company may choose to perform a needs assessment:

  • Reduced performance – It could be that performance has dropped in an area of the business. Managers will want to understand why this has happened and how to avoid it.

  • High staff turnover – When a company has a higher-than-expected rate of staff turnover, it usually indicates an issue needs to be resolved. A needs assessment can look at what might be causing the problem and what needs to change to resolve it.

  • Competitors performing better – If a business has competitors operating within the same market as themselves, they may find their business is impacted. A needs assessment can identify areas in which a company needs to improve so that it can compete with others in its industry.

  • Issues between departments in large companies – These can be related to communication, performance, staff relationships or any other area of business. When issues occur, it is important to resolve them so that the company can run more efficiently and effectively.

  • To achieve goals – When a company wants to implement new targets or goals for their staff, they may consider a needs assessment. This may help them to identify anything which would need to change for goals to be achievable.

Questions Which May Be Asked During a Needs Assessment

A needs assessment can be used across all types of business and for a wide variety of purposes. Some examples of questions which might be addressed during a needs assessment are:

  • Does our company have a vision? If so, what is it and how well is it being adhered to?
  • Are our employees happy? What can be done to improve employee morale?
  • Is work consistently of the expected quality? How is this measured and do any changes need to be made?
  • How can we increase the capacity for orders? What would need to be done to enable this to happen?
  • Where is our target audience located? Are we in a position to appeal to them directly or would a change of location be useful?
  • There is a higher than average level of staff sickness. Is there something which can be done to resolve this?

How Does a Needs Assessment Work?

A needs assessment will vary depending on the requirements of the situation or policy of the company.

Three Main Stages of a Needs Assessment

Amongst other stages, a needs assessment will always contain three main steps:

  • Information gathering
  • Analysis
  • Results and implementation

Information Gathering

The first step of any needs assessment is to gather information. This will help you to identify needs within the business and also provide insight into how things are at the time of beginning the assessment process.

Depending on the needs which your company wants to resolve, you may have to gather information from outside of the company as well as within specific departments.


If you are wanting to improve your company’s performance to compete with another company, it would be a good idea to gather information relating to that company such as their performance figures and market research data.


Once you have gathered all the information, the next step is to analyze it. By analyzing all the data as one group, it will help you to see the big picture and mean that you are better able to put plans in place which will succeed.


If you know that your competitor is performing particularly well in customer satisfaction surveys, your research should show how you compare statistically.

The market research information may give insight into what they are doing differently and how this impacts customers' decisions to spend money. Identifying the differences is the first step in bridging the gap and implementing improvements.

Needs Assessment: Definition, Overview and Examples
Needs Assessment: Definition, Overview and Examples


When the information has been gathered and analyzed, it is possible to draw conclusions and decide on the steps which need to be taken. The next stage is to implement those steps so that they can start to take effect.


If your research shows that customer satisfaction is key to competing with other companies within the same industry, then required steps would be geared towards improving customer satisfaction. This could involve employing additional staff who are responsible for satisfaction, increasing staff training or implementing a change to customer-related policies.


The final step is to evaluate the changes which have been made. Because the aim is to see whether or not the implemented steps have been successful, an evaluation should be carried out after sufficient time has passed.


A company that has implemented new policies related to customer satisfaction will want to check whether the policies are having the desired effect. This will mean assessing data and research after a certain period has elapsed following implementation. If the results of an evaluation are not as positive as hoped, then it is possible to make further changes.

Other Needs Assessment Factors

Other factors which may be included during a needs assessment are:

Investigation Framing/Limitation Acknowledgment

All businesses have limitations that they cannot overcome. These could be related to location, size, funding or a range of other variables. Understanding these limitations will help you to better understand what is and isn’t possible in terms of improvements.


If your needs assessment is looking for ways to compete with other companies within your market, it is important to understand who your competitors are.

If you have a small business, it is not necessarily possible to compete effectively with a large, multinational company, although there may still be improvements that can be made.

Future Planning Based on Results

One of the most useful outcomes of a needs assessment is the ability to make plans based on the results of the assessment.

If you know that specific changes are needed to achieve the desired results, you can plan for what comes after your targets are met.

Integration of SMART Goals

SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant and Time-Bound. The SMART system creates goals that are achievable within a designated time frame. This format also gives structure to your goals and ensures that they are realistic.

When creating SMART goals, you need to make sure that all areas have been covered. This will give you a structured approach to your goals and a method to follow.

  • Specific – Be specific in what you aim to achieve. Make sure that it is clear, with no room for misinterpretation.
  • Measurable – Having a measurable goal makes it much easier to see whether or not you have been successful in reaching it. How will you measure progress and success?
  • Achievable – Sometimes it is better to make smaller, more achievable goals which are stepping stones towards larger targets.
  • Realistic – Goals should be realistic and relevant to your business.
  • Time-Bound – Setting a time limit on your goals and targets will help to motivate teams and will often lead to results.

Final Thoughts

A needs assessment is a useful way for business owners and managers to identify needs and issues within their company. By completing a thorough assessment before implementing any changes, it is possible to highlight the areas which are most in need of attention and the changes which are likely to be the most effective.

When a needs assessment is executed properly, it not only confirms that changes are necessary but also highlights issues that managers and business owners may not be aware of. The process of post-assessment evaluation is also useful as it enables individuals to see the impact of the changes and decide whether or not further changes are required.

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