Are skills readiness gaps hurting businesses?

AI is reshaping work — and exposing the limits of traditional learning and development. The challenge isn't always a matter of training. Plenty of organizations facilitate programs. Instead, the challenge can present as visibility: Are those efforts translating into real-world capability and readiness? Find out how skills gaps are changing and what learning and development professionals need to be ready.

Much has already been written about skills readiness gaps. The World Economic Forum’s (WEF) 2025 Future of Jobs Report called them nothing less than “the biggest barrier to business transformation.” And while 85% of employers surveyed by the WEF said they planned to prioritize upskilling “by hiring staff with emerging skills … and adopting technologies to augment the workforce,” it’s clear that the impact of poor skills readiness is already being felt by businesses.

What do skills gaps look like day to day? Missed deadlines, the need for rework, inconsistent deliverables, poor productivity, frustrated employees and managers, and difficulty filling open positions with qualified workers, for a start. Simply put, when employees’ abilities don’t match what they need to know and do, organizations can’t stay competitive, and the bottom line can suffer. Learning and development programs, as currently designed, are unlikely to be enough to close the capability gaps. 

Rapidly shifting workplaces can mean that too often there may be a mismatch between L&D and the needs of both staff and the business. It may be that traditional training is disconnected from the work actually being done, or that employees’ completion of an upskilling course just doesn’t align with the real-world application of that skill. The juggernaut that is AI (among other factors, such as inflation and a shrinking workforce) is changing work so quickly that it almost can’t help but expose the limits in our current approach to staff development. While some workers in this ever-shifting environment are more exposed than others to automation by AI and its related technologies, employees and managers alike may be experiencing new, sometimes overwhelming demands. For their part, leaders may be out of touch with workers’ skills and need for upskilling. Some industries and roles are particularly hard-hit by this changing landscape, including manufacturing, IT, banking and finance, and engineering, among others.

It’s not for lack of will or commitment that the skills readiness gap remains wide open. Many HR leaders continue to boost training budgets and build out L&D libraries to help bridge the chasm. But as new, often AI-powered training tools and options emerge, those libraries may grow obsolete. Teams may need faster, clearer ways to build job-relevant capabilities. 

It might seem ironic that AI can help improve workforce readiness when it is also reshaping work so quickly. But it’s most immediate value is not automation or content delivery, it’s clarity. As roles evolve, many organizations struggle to see which skills are forming, which are lagging and where gaps may introduce risk. Traditional learning metrics often reflect effort rather than readiness. AI-powered skills intelligence can help reveal patterns that are difficult to identify manually, such as emerging skill risks within specific roles or misalignment between development efforts and business priorities.

Rather than prescribing more training, skills intelligence supports better decisions by helping leaders understand where attention to development may be needed most and which roles are more sensitive to change.

And purpose matters. The University of Phoenix 2025 Career Optimism Index^Ⓡ study of thousands of U.S. workers found that many feel burned out, powerless over the direction of their career and without options to improve their workforce-skills readiness. But when an organization invests in its employees by helping to make roles more future-ready, workers feel more engaged and regain a sense of control and competency — all of which can encourage retention and happiness at work.

With recruitment a challenge for some businesses, retaining good workers is critical. Sixty-nine percent of organizations surveyed for the 2025 Talent Trends report by the Society for Human Resource Management said they’d had difficulty recruiting for full-time, regular positions in the previous year.

Another way to make learning more meaningful: Make it experiential, virtually speaking. (How many times have you heard someone say they learn best by doing, as opposed to watching, listening or reading?) Virtual reality (VR), augmented reality (AR) and mixed reality (MR) — in which the physical and digital worlds are combined — can give workers the chance to upskill in an interactive, hands-on virtual environment that delivers immediate feedback on how they’re performing. 

Those XR (or extended reality, the collective term for these technologies) tools are being applied to a wide range of industries. For example, one major airline trained its cabin crews on safety and emergency procedures using an “immersive virtual training platform” with highly realistic interiors of the aircraft. In Ontario, Canada, hundreds of workers are being trained in battery manufacturing using XR with the help of funding from Upskill Canada and the Canadian government. An American big-box store several years ago sent out 17,000 Oculus VR headsets (now known as Meta Quest) to more than a million employees, giving every associate the chance to get trained on new technology as well as improve soft skills and compliance.

Increasingly (and to no one’s surprise), AI is being integrated into these experiential approaches to support faster skill application. The technologies tend to be most effective when guided by clear insight into which skills matter most, where gaps are emerging and which roles require closer attention. Without that visibility, even innovative learning methods may struggle to translate into sustained capability.

Changes in the workplace appear to be moving quickly, and organizations simply can’t wait for lagging indicators to reveal whether skills gaps are becoming execution risks. When leaders lack timely visibility into readiness, workforce decisions often rely on assumptions rather than insights.

AI skills intelligence offers a way to reduce that uncertainty by providing earlier signals into where skills are forming, where gaps may be widening and which roles are most sensitive to change. This shift is less about adding new programs and more about improving the information used to guide them.  

L&D professionals can quickly create tailor-made, business-aligned education that also delivers analytics for HR teams, managers and employees, potentially saving money and time and improving decision-making. AI-led training adapts in real time to each worker’s pace and style of learning, helping to ensure content is better absorbed. And L&D professionals can gain further visibility into whether their programs are actually working and connecting to their organization’s bottom line. 

Organizations that close skills readiness gaps do more than improve learning outcomes. They strengthen execution, reduce workforce risk and create clearer pathways for employees to grow with the business. In an environment defined by constant change, readiness becomes a competitive advantage — not because organizations train more, but because they see more clearly.

To begin closing a skills readiness gap, organizations first need clearer visibility into current capabilities and emerging risks. Understanding where skills matter most can help leaders prioritize development, align stakeholders and support better workforce decisions.

Explore how UOPX supports skills visibility and capability-building to help organizations strengthen readiness and execution.