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Addressing the Skills Gap in the Workforce

Due to many changes over the past few years, the U.S. workforce is facing a widespread skills gap. In fact, 74% of hiring managers report difficulty hiring qualified employees due to the lack of skills in the current labor pool.

A better understanding of the causes and consequences associated with the lack of skills in the workforce will help better develop processes to complete a skills gap analysis and combat this growing issue.

Causes of Skill Gaps

There are numerous contributors to the skills gap crisis. These issues include:

  • Loss of skilled employees to the workforce
  • Ever-changing technological advances
  • Changing work dynamics and/or market needs
  • Outdated educational structures
  • Lack of competitive pay for desired skills

If you see a lack of skilled employees this can be due to a shortage of qualified candidates for your industry related to any of these issues. This lack of skill can also be caused by a need for better training options for your employees to keep up with changing needs.

With the growing popularity of remote employees, new digital tools are required to manage employees. Increased automation tools have also changed workforce needs, requiring new skills to keep up. 30% of daily work activities can be automated, meaning employees need to keep up with these tools and new skills to maintain relevance.

While automation and digital tools have contributed to skill gaps, many employers also see a lack of soft skills such as communication, critical thinking, and problem-solving. This lack of skills can halt your organization’s growth if not addressed.

Lack of Skills Means Lack of Growth

While new tools make work easier, they can reduce important, underrated skills. These soft skills include areas such as writing, creative thinking, managerial, and collaboration that help companies create new solutions that keep them relevant in their industry.

Lack of digital and other advanced technology skills can also reduce performance, planning, and production, reducing company growth. As the gap in skills needed continues to grow, this can lead to costly on-the-job mistakes and increased recruiting costs.

Lack of needed skills also increases employee turnover, meaning further costs to keeping your business running smoothly. Overcoming these costly issues starts with conducting a skills gap analysis for your current workforce.

Completing a Skills Gap Analysis

A successful skills gap analysis starts with conducting a review of needed skills versus the skills currently available. Reviewing performance and completing associated performance assessments with your employees is key to understanding the current available skills. Team managers should conduct regular performance assessments to ensure employees understand what is expected of them and to help them see where improvements or new skills are needed.

Performance assessments will help you find the gaps between what is available and what is needed. Reviewing these gaps with employees will help guide performance management initiatives and help your management work with their teams to address issues before they become too costly. Additionally, performance management can help leaders guide employees through gaining skills that will be needed in the future.

Employee surveys also help you see what skills are lacking. Employees can often better see what skills are needed to complete their jobs, and what skills are lacking. These surveys can also give you an idea of where they see upcoming changes to the skills required.

It’s also important to research new and upcoming trends for your industry. A survey conducted by IBM shows that the half-life of skills has reduced to four years on average and 2.5 years for technical skills. Research will help you see what new advances will require updated skills, which will help you better plan for future workforce needs.

To effectively review skill needs, you must listen to your management team when they share concerns for their departments. Have them work closely with their teams to determine areas for improvement.

Consider what needs you will have as your company continues to grow. Prepare now for future technological advances. Look at areas you can automate and consider what skills will be needed to replace those tasks.

Addressing Skill Needs

Once you have completed your skills gap analysis, you have a place to start when it comes to addressing your skill needs. This will help you determine the training needs of your current workforce.

Take a look at your onboarding and continued training. Make sure you have options that address areas of concern. If you don’t have internal training options in place, consider providing incentives for employees to pursue continued education such as paying for these outside training options.

Have management set SMART goals for employees to address skill gaps. SMART goals are Specific, Measurable, Attainable, Relevant, and Time-Based. These training goals will help employees prepare to address skill needs and make them feel valued.

When looking at hiring new employees to address skill needs, consider non-traditional recruitment and hiring methods. Look at the potential of new hires.

A good way to meet your needs is to look at the skills and experience of potential hires rather than formal education. Give applicants a chance to show how their experience can fit your needs, even if they come from a different background.

Consider looking at non-traditional talent pools, such as disabled, formerly incarcerated, remote, and multigeneration applicants. Take steps to ensure biases will not keep you from finding qualified applicants.

When advertising a job opening, make sure you are clear on your needs in the job description. Detailed job descriptions will ensure potential employees will know what will be expected from them.

Review resumes based on skills and potential for developing skills and pay attention to additional documentation from applicants that gives you a fuller picture of their experience. Set up tools to review skills potential based on past experience that may not directly align with your current opening.

You may also consider setting up apprenticeship or internship programs. This gives a chance for experienced employees to train new hires based on your specific needs. Build relationships with local educational institutions to help find applicants with the right skills.

Keep in mind that 58% of the current workforce will need to train in new skills to complete their jobs effectively. Cross-mentorship and cross-training programs are good options to address these changing needs.

Lastly, consider the supply and demand of skills sought. Similar to the cost of hard-to-find products, highly sought-after or hard-to-find skills may require a higher pay rate to acquire. Consider reviewing your pay offerings compared to those of similar companies.

Change Means Opportunity

While the skills gap is a problem, it is also an opportunity. It’s an opportunity to embrace new technologies while also embracing past experiences and industry knowledge.

You are not alone in adjusting your skill needs. There are many resources available to complete a skills analysis and fill gaps as your company changes and grows. HR Service, Inc. is one such resource available.

If you need help filling these gaps, learn how our HR experts can use their 20+ years of experience to help you make the changes needed.


Written by: Penny Clark, Content Specialist

Reviewed by: Liz Warren, PhD, Senior HR Business Partner

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