The skills gap is real – and it’s growing. Almost nine out of 10 executives and managers say their organization is facing a skills gap or expects there will be one in the next five years. And by 2030, talent shortages in the United States alone are expected to lead $162 billion in unrealized revenue.
Learning and development leaders are finding ways to help their organizations navigate this new normal – like upskilling and retraining, recruiter training, and more.
The Skills Gap: Explained
Training industry defines a skills gap as a gap between an employee’s skills and the skills they need to perform a job. When it comes to the workforce as a whole, a skills gap is created when organizations struggle to find talent to meet their needs.
Many people assume that the skills gaps organizations face today are primarily a lack of technical or hard skills such as coding, but there are also significant gaps in soft skills such as leadership. In reality, nearly three out of four employers say they struggle to find college graduates with the soft skills they need. This is an alarming statistic because 91% of talent acquisition professionals believe that soft skills will be very important in the future.
Some of the biggest anticipated skill gaps over the next few years are:
- Advanced skills in data analysis and mathematics
- Processing and interpreting complex information
- Advanced computer skills and programming
- Leadership and Managing Others
- Critical thinking and decision making
- Adaptability and continuous learning
A number of factors have contributed to the skills gaps organizations face today. One of the factors is the rapid technological evolution which has led to the support of skills easily automatable by machines or artificial intelligence. “Medium Skilled Jobs” that require training but little education – roles such as waiters and receptionists – are most likely to be replaced by computers.
At the same time, these technological advances are forcing workers to develop the skills they are best at – those unique human skills that code and circuitry can’t replace, like critical thinking and empathy.
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Another major driver of change has been the COVID-19 pandemic. Many companies have had to reinvent their entire business models to survive, and many workers are now reassessing their jobs after the pandemic.
Performing a skills gap analysis
Now that we know how we got here, what do we do? L&D leaders can play a key role in closing the skills gap. But in order to address them effectively, they must first understand exactly what gaps exist within their organization. Here are some steps to perform a skills gap analysis.
1. Identify key skills across the organization. This step will involve getting feedback from all levels of leadership. It is possible that skills gaps in an organization are due to a lack of alignment around the skills most needed or valued. To ensure your team is measuring the right skills, compare any entry to company values, job descriptions, and even planned future work as the company grows.
2. Measure current skills. Measurement of existing skills can include analysis of raw performance measures, data from performance reviews, or tools such as 360 degree reviews. L&D managers can help drive this process by ensuring data collection is consistent across the organization. Otherwise, the team could end up with inaccurate or incomplete data.
3. Create an action plan to close the gaps. Approaches to solving a skills gap may look different depending on the size of an organization and the resources available. We will discuss several specific solutions that can be included in an action plan below.
Recruit for the future
Once existing skill gaps are well understood, finding new talent is much more effective. While this responsibility ultimately rests with talent acquisition teams, L&D can work closely with recruiters to ensure that hiring processes like interviews and skills assessments do not limit them in any way. .
For example, recruiters may need to be trained to identify and manage their implicit biases. Some of the most prominent biases in recruitment processes are familiarity heuristics (favoring a candidate with a similar background), elitism (favoring a candidate from a well-known institution) and career archetypes (ignoring a candidate whose career path does not match conceptions of what it “should” look like).
Sometimes drive, passion and the desire to succeed are more important than the ideal list of qualifications.
Sometimes drive, passion and the desire to succeed are more important than the ideal list of qualifications. Talent acquisition teams can be trained to spot candidates with these characteristics, who are teachable and have a growth mindset.
If organizations are still struggling to obtain the type of candidates they seek, partnerships with local institutions that teach in-demand skills, such as technical schools, can help provide access to a larger pool of qualified candidates. Organizations can also offer internships to build their own talent pool for the future.
Convert right now
L&D teams can also look within the organization to fill a skills gap by reskilling existing talent for new roles. Such efforts have proven pay dividends – Organizations report positive impacts on employee retention, satisfaction and results growth through reskilling initiatives.
When reskilling employees for entirely different positions within the company, make sure the training is built around learning paths. Learning paths are sequences of goal-oriented instructional experiences that reduce wasted time by presenting the learner with a clear roadmap to success.
The report The Future of Work After COVID-19 by research firm McKinsey & Company highlights the increased need for retraining after the pandemic: different skills to stay employed.
As reskilling becomes a necessity in the world of work, L&D teams should consider providing more opportunities for employees to explore and practice new skills.
Closing skills gaps is not a one-size-fits-all exercise, but L&D teams can stay proactive by developing upskilling programs. Upskilling involves teaching an employee additional skills that build on existing ones, as opposed to requalification which prepares the employee for a new role. There’s a lot to learn from the following companies that offer strong, large-scale development programs.
- AT&T has developed multi-year, billion-dollar Future Ready initiative when it realized that only about half of its employees had the STEM skills the company would need in the future. It includes an online training platform with collaborative elements, personalized learning experiences, and a career portal that gives employees the opportunity to prepare for their next big career move.
- PricewaterhouseCoopers has invested $3 billion in its New world, new skills initiative. It includes an app where employees can earn micro-diplomas and certifications, and a digital lab where they can collaborate on solutions and learn from each other.
- Nationwide Future of Work Program was a $160 million investment in enhanced benefits, including a five-year program to help 28,000 associates learn the skills of the future, such as digital literacy.
- from Amazon Improvement 2025 is the company’s commitment to helping employees gain in-demand skills and move into higher-paying roles. It includes a variety of programs such as Amazon Web Services Training and Certification, the Mechatronics and Robotics Apprenticeship Program, and the A2Tech Program which offers fulfillment center associates the opportunity to move into technical roles.
Unsurprisingly, retraining and upskilling were the main areas of focus for learning and development programs in 2021a trend that is expected to continue in the years to come.
The modern workplace is constantly changing. As many employees now return to the office, for example, they may find that their interpersonal skills have diminished during the pandemic. L&D can accompany these workers with the support they need.
Whatever the skills gap, L&D teams can lead the charge in filling it using the above strategies while helping to ensure the long-term viability of an organization’s talent.