While skills gaps have always existed, workforces are currently undergoing dramatic changes that have exposed the shortage of expertise required for the new digital economy.
Therefore, in order to build an effective workforce for the future, organizations need to understand their existing skills gaps.
A skills gap is the difference between an employee’s current abilities and the skillset best suited for their job.
Companies have a desired set of skills to perform a given role successfully. This list of skills is dynamic and changes depending on external market forces and internal organizational changes.
Finding employees to match the required skills for every position is challenging; therefore, skills gaps exist.
Many factors can contribute to skill gaps:
Skills gaps can lead to workplace inefficiency, with staff struggling to handle their responsibilities or perform assigned tasks. In addition, severe skill gaps may lead to employees being unable to perform their roles.
In addition to focusing on an individual’s skills gaps, the concept can also be applied at a company-wide level.
Management can use skill gap assessments when introducing new procedures, technologies or take them into consideration when looking at work culture.
Skills gap analysis is a critical tool for organizations to assess the effectiveness of their workforce.
Identifying any skills gaps present and understanding how they limit company performance is becoming essential thanks to new technologies transforming many business sectors.
With AI, automation, and other advances, many roles are becoming obsolete, and organizations need to source new skills to match growing technological needs. However, research by McKinsey in 2021 shows 87% of organizations expect to experience skills gaps in the coming years, with 43% saying they already have one.
A 2022 survey of CEOs by Deloitte found labor and skills shortages were the 2nd most cited external factor disrupting their business strategy. Also, with the rise of the digital economy, a Salesforce survey found that 76% of global workers don’t feel equipped to operate in new digitally-focused workplaces.
To respond to this gap, organizations must assess their existing workforce and develop active training programs and recruitment strategies to meet the moment.
Benefits of successfully overcoming skills gaps lead to a range of benefits, including:
Skills gaps can exist in various forms. However, generally speaking, they can be separated into three main types:
While many workforces clearly have a problem, addressing skills gaps is challenging. Research from McKinsey found only 33% of capability-building programs always or often achieve the desired results.
So why is it so hard to overcome workforce skill gaps?
There are various ways to fill skills gaps and develop a future-proof workforce. This includes training in the form of:
Or new hiring practices based on filling existing skills gaps and recruiting better-skilled staff.
Addressing workforce gaps requires extensive skill gap analysis, the process of determining the difference between what an organization needs from its staff and what it currently receives.
Skill gap analysis requires effective HR processes to accurately reflect the performance of employees and identify the skillsets and knowledge currently lacking or underdeveloped.