Employer Resources

How to recognize and address skill gaps in the workplace 

As technology transforms almost every aspect of the economy, dramatic changes are happening in the workplace. Artificial intelligence, cloud infrastructure and automation are disrupting the nature of work in nearly every industry. These rapid advancements can create new opportunities for productivity and profit, but can also leave companies struggling to keep up with the pace of change. 

If employees or employers fail to adapt fast enough, then a gap begins to form between job skills learned and the skills required. As a result, performance suffers. Employees may look for work elsewhere and employers might have to search hard to find new talent. When skills gaps become widespread, the entire economy feels the effects. That’s why companies should take steps to enhance employee learning, ensuring their talent pool remains adequately prepared for current demands and future trends. 

What is a skills gap? 

A skills gap is essentially a mismatch between the skills that a job requires and the skills that workers actually possess. These gaps can manifest in one of two major forms: The first is a skills gap in the workforce, which means a large-scale shortage of qualified candidates for the jobs available. The second is a skills gap in the workplace, which occurs within one company when employees do not have the right skills to perform their jobs well. 

Some experts note a workforce skills gap as a major problem for the American economy. The U.S. Chamber of Commerce reports that 74% of hiring managers perceive a skills gap in the labor market, which means there is a shortage of qualified candidates for available jobs. 

Risks of skills gaps in the workplace 

With an economy-wide skills gap so evident, there are certainly many firm-level gaps at play as well. In one recent survey of executives and managers, a combined 87% said they either see skills gaps in their organizations currently, or they expect to see them within a few years. Most of these same respondents said that addressing the gaps is a priority, because there is risk in allowing such mismatches to grow. If workers do not have the right skills for the job, a business can suffer losses due to several factors, including: 

  • Underperformance on the job. 
  • Errors in planning, production, financials or other costly mistakes. 
  • Mismanagement of safety hazards. 
  • Increased employee turnover. 
  • Failure to meet customer demands or expectations. 

In the same survey of executives, only about one-third felt that their organization was prepared to address the gaps they faced. If the majority of business leaders feel concerned but unprepared, then any company can certainly benefit from identifying its own shortcomings and making a plan to fix them. 

Examples of workplace skills gaps 

A gap can occur with either hard skills, like technical know-how, or soft skills like teamwork and communication. The most common factor in formation of skills gaps is the adoption of new technology, but there are many situations in which people may have trouble matching their skills to the tasks at hand. Here are some areas in which job skills are particularly prone to gaps. 

  • Operation and maintenance of equipment. 
  • Proficiency with digitized or automated work. 
  • Virtual and remote collaboration. 
  • Understanding of new and emerging markets. 
  • Social media literacy. 
  • Navigating cultural or generational differences. 
  • Commitment to diversity, equity and inclusion. 

What causes workplace skills gaps? 

Skills gaps are generally caused by technological or cultural trends that evolve faster than the workforce can adapt. The reasons behind this lag time and resulting skills gaps, however, may vary widely across industries and specialties. Here are some examples of underlying causes. 

  • New technology can emerge faster than workers are able to master it. 
  • Culture and/or politics outside a company may shift faster than the viewpoints within a company. 
  • Staff with seniority may have trouble communicating with younger generations and vice versa. 
  • Lack of access to proper training and experience — due to limited availability, high cost or other factors — may leave qualified candidates in short supply. 
  • Educational institutions do not always prepare students adequately for the modern economy

How to identify skill gaps in the workplace 

Workplace skills gaps can be common, but might not always be identified or handled properly. One study has predicted that lost productivity due to skill shortages will cost a total of $8.5 trillion in the U.S. economy by 2030. To keep from being a part of this trend, every business should try to identify and address skills gaps as proactively as possible. 

Human resources (HR) can lead the way in identifying and even quantifying any mismatch in the company’s talent by conducting a skills gap analysis. This process may be simple or complicated depending on the size of the company and diversity of skills involved. But these are the basic steps: 

  • Survey employees at all levels to determine what skills are most important for the job and what’s expected to be important in the future.
  • Conduct research to learn about experts’ predictions for future trends. 
  • Perform assessments to gauge employees’ current competence in relevant skills. 

This analysis will reveal and prioritize a company’s talent needs. Based on that information, HR can design workplace learning programs or plan for hiring to address any gaps. 

How to foresee skill gaps 

With the rapid pace of change in today’s economy, companies can benefit by assuming that skills gaps will emerge, if they haven’t already. That’s why proactively addressing skills gaps and planning for solutions can save effort and money in the long run. Companies can be proactive by building elements of the skills gap analysis into routine HR operations. Periodic research on trends and assessments in performance will equip evaluators with the information needed to get ahead of the skills gap. 

Trends in workplace skill gaps 

Research suggests that skills gaps in the workforce are growing, and the trend is likely to continue. One recent survey found that nearly one-third of recruiters agree that the skills gap has grown compared to just a year ago. In a separate survey of hiring managers regarding the future of workforce development, the majority of respondents suggested that technology will continue to reshape skill-set demand in the labor market. 

Strategies to address skill gaps in the workplace 

In light of these trends, every business needs to know how to address skills gaps in their own workforce. There are two main strategies for closing the gaps. One is by hiring and the other is by learning and development. In both of these approaches, many managers are finding that refocusing procedures can lead to success in securing the right talent amid today’s shifting economic landscape. 

When it comes to hiring, recruiters should consider the following methods for attracting and selecting ideal candidates: 

While hiring can be an effective means of addressing skills gaps, organizations can often achieve better return on investment through employee development. Targeted training can close the gaps while also improving job satisfaction and company culture. Here are some tips for successful upskilling and reskilling to future-proof a company’s workforce. 

  • Reconsider workplace design and business practices, looking for opportunities to improve creativity, collaboration and community
  • Invest in updated workplace learning programs that keep employees engaged and maximize their capabilities. 
  • Sponsor employees to pursue continuing education or professional development programs on their own time. 
  • Prioritize transparency, communication and feedback to bring out the best in employees and make them feel valued. 

In a landscape of broad technological and societal changes, there is no easy solution to closing skills gaps in the economy. However, every organization can take steps to self-evaluate and address its shortcomings proactively. Through a combination of forward-thinking recruitment, professional development and strategic reskilling, companies can helpclose the workplace skills gap and improve their readiness for the future.