Skills Gap

What Is the Skills Gap?

Skills gap refers to the disparity between the skills an employer expects
their employees to have and the actual skills employees possess. This
mismatch makes it challenging for employers to fill open positions.

The United States is in the middle of a significant skills gap—a few years
ago, as many as 68 percent of employers currently had open positions that
they couldn’t find skilled employees to fill, but the gap has widened even
further since.

What Causes a Skills Gap?

A few variables, ranging from poor education to an evolving workforce,
contribute to the national skills gap. Three major factors in the current skills
gap are a lack of tech training, retiring baby boomers, and a lack of soft-
skills development.

Lack of Tech Training

Automated machines create more job opportunities for mechanical,
electrical, and software engineers. However, educational opportunities fail
to keep up—while 67 percent of new jobs in STEM are in computing,
computer science degrees only account for 11 percent of STEM bachelor’s
degrees.
Additionally, many companies fail to offer adequate training for these new
machines. A survey from the MIT Technology Review found only half of
U.S. plants provide formal training for their workers.

Retiring Baby Boomers

About 10,000 baby boomers reach retirement age every day. That means
droves of highly skilled workers will soon bow out of the workforce, leaving
employers to scramble to find new workers who can fill senior-level roles.

Lack of Soft-Skills Development

Fewer high school students get summer jobs than previous generations.
This means students don’t develop soft skills like teamwork, punctuality,
and a service-oriented mindset, which puts them at a disadvantage for
finding a job later on. 

How Does a Skills Gap Impact

Employers?
According to one study, the skills gap may cost companies up to one million
dollars a year. When employers can’t find candidates who are skilled
enough to fill open positions, those positions can remain open indefinitely. 

Too many open positions can directly affect your company’s bottom line, as
your workforce won’t be fully staffed and, therefore, not work as
productively as it could with a full staff.

How Do You Identify Skills Gaps In the

Workplace?
You can find out what skills your workforce is missing by taking the
following five steps:

1. Identify your company’s goals and objectives.

2. Consider what skills are required to complete those objectives.
3. Decide which jobs are directly responsible for achieving each
goal (for example, sales reps need customer service skills more
than the IT department).
4. Identify what skills your employees already possess.
5. See how your employees’ current skills match the skills they
need to complete your company’s goals and objectives.

What Is an Internal Skills Gap

Analysis?
An internal skills gap analysis helps employers identify skills gaps in their
workplace. The analysis compares the skills an employee needs to the
skills they currently have. 

HR departments can use this information to discover which skills are

lacking within certain departments and organize trainings to compensate for
those shortcomings. 

Regular internal skills gap analyses will help your workforce evolve with
today’s ever-changing needs.

How Can Employers Address the Skills

Gap?
If you can’t find qualified employees, then you need to address the skills
gaps within your organization.

Job Trainings
Once your company has identified the skills gap, address it with employer-
led training and development. New hires will complete these trainings to fill
the gaps in their skill sets.

Hiring and Promoting from Within

Consider looking at your current workforce when filling senior-level
positions. While most of your employees won’t meet the skill set
requirements, some will at least have an understanding of its
responsibilities. By making more on-the-job training available, you can
adequately prepare your employees for their new jobs.

What Industries Are Most Affected by

the Skills Gap?
Virtually every industry will feel some effect from the skills gap, but the
following may feel the biggest impact:

 Finance and business

 Manufacturing
 Technology
 Telecommunications
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What is Skill Gap?

Skill Gap is the difference in the skills required on the job and the actual skills
possessed by the employees. Skill gap presents an opportunity for the company and
the employee to identify the missing skills and try to gain them.
Employees are recruited by companies to work on fulfilling company objectives.
Hence, people with the correct skill sets are recruited by companies. However, often
it happens that employees lack certain knowledge & training which creates a skill
gap. Because of this the employee is unable to perform the complete job. 

Importance of Skill Gap

Skill Gap is very important when it comes realizing the need for improvement or
training. Skill gap can be based on the job fit or actual gap in technical or functional
skills to complete a job. Once we analyze the skill gap, we can work on the
improvement plan to fill this gap.
If this gap is allowed to persist, this would be mean the employee would keep doing
the job unequipped with right skills required and would lead to loss in productivity. If
this problem is evident for a large number of employees or department, it can
become an issue for the organization.
Skill gap is expected in any employee or organization. It is more of an opportunity
analysis to improve and assess the existing workforce and further improve them
through coordinated trainings and grooming during through the job tenure.

Skill Gap Analysis

Identifying skill gaps is essential for the companies to ensure that the workforce is
well trained, knowledgeable & better equipped to perform the job. This analysis helps
achieve the following objectives:
1. Helps one refine and define skills the agency needs, now and in the future
2. 2. Make employees aware about the critical skills they’ll need to grow
3. 3. Helps in recruiting efforts when current employees don’t have the skills or
the interest
4. In terms of banking, an example of a skill gap could be if an employee lacked
the ability to cash government bonds.
5.
6. Skill Gap Solutions
There are several ways in which employee skill gaps can be reduced thereby
benefiting the organization. Some solutions are:
7. 1. Better training of employees so that they acquire the required skills to
complete a particular task
8. 2. It can be reduced by exposing employees to better resources & help them
improve their knowledge
9. 3. Hire a third party which has got the required skill to execute the job
10. 4. Recruitment and selection of better skilled employees can remove the skill
gap as a long term perspective
11.
12. Example of Skill Gap
13. If a job role requires an employee in technology company to know a
programming language and a database and the employee knows only one
language. This means there is a gap in skills. The employee can improve this
by learning the missing skill.
14.While your current teams have the skills they need to do their jobs, are you
sure your teams are ready for the future?

15.Big technology changes are constantly happening. If you aren’t teaching

your employees new skills, your company can develop a growing skills
gap.

16.But what is a skills gap, and how do you know if there’s one at your
company?

17.Here’s everything you need to know about identifying skill gaps and
helping your employees develop the right skills.

18. What is a skills gap: a skills

gap definition
19.The future of work is changing.

20.As many jobs become automated or obsolete, there are just as many roles
opening up that call for new skills. To continue growing, employers need to
address the skills gap in their organizations. Otherwise, they may risk
losing their teams.

21.A skills gap is when your current workforce’s skill set doesn't align
with the skills they need to do their jobs.
 22.

Many companies assume that hard technology skills are their primary skills gap. But, employees may
also be lacking in soft skills that they need to do their jobs well.

COVID-19 made leaders even more aware  of how important it is to build capacity in their
employees. Now, 78% of leaders say that skill-building is crucial to long-term growth . Only 59%
of leaders said the same thing before the pandemic.

Now more than ever, leaders see a widening skill gap in their organizations. 43% of industry leaders
see that their company needs to address a skills gap immediately  to keep up.

Recognizing the gaps in your employees’ skill sets can help you prepare for the future. Building those
skills in your workforce positions your company for innovation and agility .

Many companies see even more benefits to building current employee skills.

Addressing your skills gap makes your company more likely to deliver on its strategy. Plus, investing in
skill development increases employee performance and satisfaction .

23. The importance of analyzing

skills gaps in your company
24.For years, employers have preferred to hire new people to close their skills
gaps. But, it’s becoming difficult to find new employees with the skills
companies need.

25.By the time many companies realize they have a skills gap, they could be
in dire need of support. Assessing your skills gap helps you recognize the
capabilities your teams need to thrive.
26.

27.A skills gap analysis template lets you see where you need to expand your
team’s skills right away.

28.Often, it can be more affordable and profitable to train people in-

house than it is to hire new people. Your employees will appreciate you
investing in their capabilities and empowering their growth.

29.Even if you don’t see glaring skill gaps, a skills gap analysis can reveal
new growth opportunities. Soft skills like good communication can play a
major role in team performance.

30.A gap analysis template can make it easier to assess soft skills.

31.Even though 93% of HR professionals say soft skills are as or more

important than hard skills , we often overlook them when analyzing skill
gaps.

32.Improving your teams’ soft skills primes them for leadership . Then, you
don’t have to hire managers who don’t know your business to manage
employees who do.

33. How employers reduce the

skills gap
34.If you aren’t looking at your skills gap already, there’s a good chance you
aren’t fully using your talent.
35.

36.Over 50% of employees say their employer doesn’t understand their

current capabilities . This leads employers to offer the wrong kinds of
training. When that happens, employees may disengage at work and feel
undervalued.

37.In some cases, employees have skills they don’t use because they don't
need them for their current job. Other times, employees can fail to see their
skill gaps. Looking at your teams’ gap in skills helps you offer development
opportunities employees value .

38.Often, employers assume that it’s an employee’s job to expand their skills.
In reality, it pays for employers to invest in their employees’ development.
Upgrading employees' skills and keeping them interested and growing
should be seen as a collaborative effort, every day, not just in one-off
training programs. 

39.Reskilling programs and training are great ways to expand your teams’
capabilities. These programs let employees repurpose their skills and
apply their expertise in new ways.

40.According to McKinsey, nearly 70% of businesses see direct ROI from

investing in reskilling problems. Often, companies also see benefits
beyond bottom-line growth.

41.Top performers often seek out organizations with development

opportunities. Plus, skill-building can have a strong impact on company
culture .
42. How to address the skills gap
43.Training and development are essential to fill the ever-increasing skill gap.
But how do you know if your organization has a skills gap?

44.A skills gap analysis template helps you see which skills your team needs
to master. Reviewing their current skills helps you find the best training to
close the gap.

45.

46.Evaluating both hard and soft skills  can show the best ways to address
your teams’ need for growth.

47.Start by defining the skills that are most valuable to your organization now
and in the near term.

48.Next, consider what skills your company may need in the next 5-10 years.
This can be incredibly hard to predict. Don't try to be too precise but look
for general areas or categories of skills, such as data literacy or geriatric
needs, that are relevant to the company's long-term strategy and align with
broader external trends. Talk to managers and talent professionals to see
what skills they look for in a new hire and what trends they are seeing.

49.Use these skills to fill your gap analysis template. Then, work with HR
to create 360-degree assessments  that measure the abilities of your
employees.

50.Once you've evaluated your teams, you can find support or development
opportunities that benefit the most people.
51.Managing the skill gap is about more than creating one online course and
requiring employees to take it. Using a variety of different types of training
is more effective than solely focusing on one. Even more important is
designing work and the work environment to enable employees to grow
and develop themselves every day. Consider alternative forms of
development and support. According to Deloitte, valuable soft skills
or capabilities may be best cultivated  through a culture of coaching at the
team level.  

52.For example, McKinsey found that 46% of businesses say expert coaching
is an impactful way to train their teams. Coaching is a powerful tool  to
strengthen soft skills and encourage self-improvement. Plus, a coach can
provide daily accountability and support  while employees learn hard skills.

53.

54.Bite-sized online training sessions are another way to address your

company’s skills gap.

55.Delivering relevant training in small increments can help employees

gradually learn new skills. Plus, modular micro-training delivers almost
twice the ROI  of longer sessions, with a 30% lower price tag.

56.Once an employee learns a new skill, let them practice their skills with a
new project. Pairing them up with someone who has the skill already can
help them learn and develop faster.

57.Keep in mind that this is a new skill for them, and remember to review their
performance fairly to encourage development.
58. 3 examples of employers
addressing the skills gap
59.Companies successfully fill their skills gaps in many different ways. But,
they all focus on offering strong training support and opportunities for
workers to learn the skills the business needs.

60.Different skills require different types of learning. Finding the best way to
teach new skills can increase the success of your learning and
development programs.

61.Here are 3 examples of companies that developed innovative ways to train

their workforce.

62. Tesco
63.When COVID-19 hit the UK, supermarket chain Tesco needed new staff to
manage the uptick in online orders. So, they developed a great way to train
new employees and put more people to work.

64.From March to April 2020, Tesco reskilled 45,000 furloughed workers  to

process online orders. They ultimately hired 16,000 of those trained
workers full-time.

65.By offering a training program, Tesco expanded its hiring pool while
helping workers develop new skills.

66. Abbott
67.Many companies search for candidates with experience in a specific role.
Abbott aims to create well-rounded employees, so they train new hires in
every central area of their business instead.

68. Abbott designed a development program  for recent graduates that shows
them how the business operates. Abbott employees work in six different
departments over 2 to 3 years.

69.These short-term assignments give new employees a more informed view

of what happens across the business. This program improves collaboration
skills and shows employees skills they may want to develop.

70. Milwaukee Tool

71. Milwaukee Tool developed programs  that help employees move into new
positions. These upskilling opportunities help build employee capabilities.
 Meanwhile, Milwaukee Tools can engage high-performing employees in
new ways.

72.The Engineering Leadership Development Program helps employees learn

hard and soft skills for a new job role. It also pairs them with a mentor to
help them expand their capabilities.

73.The Sales and Marketing Leadership Program prepares team members for
leadership positions. This program teaches key management skills and
empowers employees to step into new opportunities.

74. Decrease your skills gap with

coaching from BetterUp
75.More and more companies will experience a widening skills gap in the next
five years. While reading this article, you may have discovered that your
company is one of them.

76.But, there’s no need to worry. Once you discover where your skill gaps are,
there are many ways to upskill your current employees.

77.With the right training and support, your business and employees can
thrive.

78.BetterUp coaching can help your employees develop a growth mindset and
expand their skills. Request a demo  today to see how coaching can take
your employees’ skills to new heights.

We’re living through an interesting part of history. Advancements in

technology are rapidly changing our lives and the way we work.
We’re also more connected than ever before, allowing us to stay in
touch and perform our duties from just about anywhere in the world.
Yet this rate of change and development means that employers
need new and evolving skill sets. As such, some fear a ‘skills gap’ is
opening.

There is some debate on the severity and scope of this skills gap,
yet it has the potential to cause some real issues. We explore what
exactly it is, which industries are lacking certain skills, and how you
can keep on top of your personal development for your career.

What is the skills gap?

Let’s start by exploring what we mean when we use the term skills
gap. In reality short, it’s the difference between the skills needed to
do a particular job and those that are available. However, as we’ll
see, it can impact different levels of the job industry:

For individuals
The skills mismatch means that some people don’t have the
right skills for the jobs available. For example, some figures show
that in the UK, around 40% of UK workers don’t have the right
qualifications for their current jobs. This means that some people
are underqualified, and some are overqualified. 

Estimates suggest that by 2030, nearly 20% of the workforce will

be significantly under-skilled for their jobs. As a result, many
could find themselves being less productive in their work, less
satisfied with it, or even out of work completely. Right now, it
can mean that finding an appropriate job in a relevant industry is
more difficult.

For businesses
For businesses, the skill gap is also problematic. They’re finding that
talent pools are limited in certain areas/professions, meaning that
roles are taking longer to fill. This lack of qualified personnel also
has several impacts on businesses. It can cause: 

 A loss of productivity 
 A higher rate of staff turnover 
 Lower levels of morale 
 Lower-quality work 
 An inability to expand the business 
 A loss of revenue 

Clearly, these are all potentially damaging effects that arise from a
mismatch of skills. It can ultimately mean that companies aren’t able
to fulfil the demands of their customers, whether it’s in delivering
products or services.
For industries
When these problems are extrapolated out across entire industries,
the issues become even more evident. Talent shortages could be
widespread, and as well as a lack of role-specific personnel, there
may also be a lack of skilled managers to train those who are
coming through. On the other hand, we may even end up in a
situation where some industries have a high number of low-skilled
people applying for a small number of low-skilled jobs. 

Such instances could see the rate of progress in certain industries

slow, as many positions remain unfilled. What’s more, such
widespread gaps could have a significant impact on the economy.

Does it really exist?

Of course, not everyone agrees that there is such a thing as this
skills gap. A quick internet search will highlight a number of high-
profile articles with claims like ‘the skills gap was a lie’. Many of
these refer specifically to the US jobs market in the wake of the
2009 financial crisis. 

According to some data, as unemployment rose, employers were

looking for candidates with more skills, education, and experience.
As the rate of unemployment started to fall, so did the expectations
of employers. However, there are many other angles to this issue. 

As we’ll explore, in the UK at least, there are clear signs that there
are industries where there is a shortage of qualified professionals.
What’s more, some data suggests that although levels of education
are higher, basic skills like numeracy and literacy may be lagging
behind.

Why does the skills gap exist?

There are several theories on why a skills gap might exist. Often,
these depend on the industry and type of role. However, there are
some suggestions that apply across just about every area of work:
Technology
With the rise in disruptive new technologies such as artificial
intelligence, machine learning, and automation, the world of work is
changing. There is the potential for many roles to be made obsolete
in the coming years, with new positions opening to support these
new innovations. Additionally, things like the gig economy are
meaning a fundamental shift in the way people find work. 

With these advances, the types of job roles and skills that
employers need are changing, and there aren’t always the people to
fill them. A 2018 Deloitte study suggested that in the US
manufacturing industry alone, the skills gap could see around 2.4
million roles unfilled between 2018 and 2028.

Education
One of the areas where there are problems emerging is in
education. The overall level of education in the UK is high – a recent
OECD report shows there are more graduates than non-graduates
in the job market. However, employers are seeing gaps in areas
such as basic literacy, numeracy, and IT skills. 

Despite this lack of relevant knowledge, there isn’t a lot being done
to promote further learning and upskilling. Some figures suggest
that just 24% of UK workers have spent time reskilling over the last
two years.

Training
Some schools of thought suggest that the skills gap isn’t just down
to individuals and the education system. In previous generations,
employers would hire graduates or untrained newcomers and train
them to do the job. Nowadays, with the gig economy and pressure
for instant results, many companies are seeking those who are job-
ready. Experience is valued more than potential, and expectations
and requirements often reflect this. 
There are additional challenges here too. For example, fewer
people are starting apprenticeships in the UK. This could be
because funding for them (and adult learning in general) has fallen
45% since 2009-10.

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Explained

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What industries have a skills gap?

Although people may lack skills in general areas such as literacy,
numeracy, and IT, what about when it comes to professions? It’s
safe to say that certain industries suffer more from a mismatch of
skills than others.

Where to find the information

In the UK, there are several indications of where these shortages
are. One place worth referencing is the government’s Shortage
Occupation List. This list outlines where there are shortages of
skilled jobs, giving immigrants the chance to apply. However, it also
highlights where there is a lack of skilled people to fill them from
within the country. 

Another useful resource is the Project Luminate report, which

identifies the industries and occupations where there are skills
shortages.  It also explores why some of these vacancies are so
hard to fill, and how the labour market looks on a regional level. 

One final paper on the subject is the UK Skills Mismatch in

2030 report, which explores the skills themselves. It highlights a
major problem with basic digital skills, as well as leadership and
management. It also looks at knowledge areas where there is
expected to be a high number of under-skilled workers.

Where are the skills gaps?

So, what can we tell from these sources? There are several
consistencies across the reports, highlighting areas where the skills
gap is more obvious. Some of the main areas include the STEM
industry (science, technology, engineering and mathematics),
healthcare, IT, the creative sector, and trade. 

Some of the roles with the most skill shortages highlighted by the
Project Luminate report include: 

 Nurses 
 Programmers and software developers 
 HR and industrial relations officers 
 IT user support technicians 
 Business sales executives 
 Engineers 
 Design and development engineers 
 Web designers 
 Chartered accountants 
 Teachers 

As you can see, even this short selection represents a varied range
of positions. What’s more, studies show that a similar set of
professions are experiencing a shortage in the US.

What skills are in high demand?

The roles experiencing a shortage of skilled professionals often
have a fairly unique knowledge base and set of qualifications.
However, there are some skills that are consistently in demand
across many of these industries. Employers of all kinds are seeking
candidates with both hard and soft skills. 
Some recent LinkedIn research explored over 20 million job
postings across the network to determine ‘the skills that are in the
highest demand relative to the supply of people who have those
skills’. They divided the list into hard and soft skills:

Hard skills
Hard skills are the taught skills that are required to do a particular
job. They’re the measurable abilities that employers can easily
define and find: 

 Blockchain. The technology behind cryptocurrencies like

Bitcoin has many fascinating applications. Employers are
looking for those who are experts in the emerging field. 
 Cloud computing. The cloud is another relatively new
technology with huge potential. Systems like Microsoft
Azure have an array of uses, making those who can
understand them invaluable. 
 Analytical reasoning. Whether it’s in fields such as data
analytics or strategic thinking, there is significant demand for
those who can process and interpret large sets of data. 
 Artificial intelligence. We’ve only just started to see the
potential for artificial intelligence (AI). As fields such as
machine learning continue to develop, demand for these
professionals is high.
 UX Design. Digital devices and products are at the heart of
our modern lives. Those who can design intuitive user
experiences will always find work in today’s job market.

Soft skills
Soft skills are the productive personality traits that make for good
employees. They’re harder to teach, but no less sought-after by
employers. When it comes to a skills gap, some of the most in-
demand soft skills include: 

 Creativity. The ability to use imaginative ways to solve

problems and connect the dots is a valuable asset in just
about every industry. 
  Persuasion. When it comes to things like negotiation or
leadership, the ability to convince others to follow your ideas is
always useful. 
 Collaboration. Working effectively and efficiently with others
to deliver results is at the core of many
organisations. Collaboration takes many forms and is an
essential skill. 
 Adaptability. In a rapidly changing working environment,
those who can think on their feet and handle new situations
will always be valuable.
 Emotional intelligence. This soft skill is all
about understanding and responding to emotions, both your
own and those of the people you work with.

Challenges in addressing the skills gap

It’s clear that there is a mismatch between the demands of the
modern labour market and the number and level of people to meet
those demands. However, addressing these issues can be difficult
for both employers and individuals.

From a workplace perspective, it can be hard for organisations to

develop the infrastructure to recruit, hire, train, and upskill their
workforce. Many companies focus on hiring people who can fill an
immediate gap, rather than on finding people they can develop over
the course of a career. Couple this with a rapidly changing
workplace and further gaps soon appear. 

For individuals, the challenge of training or retraining can be a

daunting prospect. Not only does it mean dedicating time and effort
to learn new skills, but also deciding what the right progression path
is. 

Although these challenges seem difficult to overcome, the situation

is far from an impossible one. There are several ways that
industries, businesses, and individuals can address the skills gap.

 
 

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National Yang Ming Chiao Tung UniversityUsing Creative Problem Solving

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Skills

How are companies reacting?

Industry experts McKinsey found in a recent global survey that 87%
of organisations said they’re either experiencing a skills gap now or
expect to experience one in the next few years. But what can
companies do to address the problem? Thankfully, there are several
proven steps that companies can take:

A skills gap analysis

The first step of the process is to highlight where there are problem
areas or the potential for them to emerge. Companies need to
examine the essential skills they need or want and compare them to
what their workforce currently has. This type of analysis can provide
HR teams with valuable insight, allowing them to take further action.

Hiring
With a full analysis in place, companies can start to hire people with
the right kinds of skills. Rather than employing for roles with a
narrow scope, they can focus on the areas they currently have
weaknesses in, improving the overall skill pool.

Skill building
Perhaps the most effective way of bridging the skills gap is for
employers to offer reskilling and upskilling programs. These help
existing employees train in the skills where the organisation is
lacking. This type of knowledge building helps both the company
and the individual.

How can I close the skills gap?

Although the landscape may not seem the most encouraging, there
are plenty of positives to take from all of this data. The fact that
we’re able to identify potentially difficult areas means we can take
steps to avoid them. What’s more, we can also focus on building
skills and lifelong learning to benefit our careers. Here are some of
the steps you can take:

Skill assessment
The first thing that can help is to self-analyse your existing skills.
You need to work out what your personal strengths and
weaknesses are, and how these might impact your career. A good
place to start is to compare your current skills to those outlined in
job postings that you’re interested in. Here, you can see whether
there are any gaps in your knowledge.

Address the shortages

By knowing where your weaknesses are, you can start to take steps
to address them. Whether it’s undertaking training through your
current employer or striking out on your own, it can help to boost
your CV. There are plenty of learning opportunities available, such
as a short online course or a longer learning experience. We’ve
highlighted a range of courses throughout this article to help get you
started.

Gain experience
One of the best ways to work on and demonstrate your skills is to
find relevant experience. Although this may sometimes seem
difficult (experience requires a job, jobs require experience), there
are several methods you can try. Freelancing as a side gig can help
you build your expertise, as can things like internships and
apprenticeships. Even volunteering can help you work on a variety
of skills.

Know how to sell yourself

When it comes to finding work, you need to know how to appeal to
employers. Essentially, you need to demonstrate that you can help
them fill their skills gap. Knowing how to write a strong CV can help,
as can things like interview skills.

How can I close the skills gap?

As we’ve seen, the skills gap is a real issue and one that needs
addressing from top to bottom. As technology continues to change
the world of work, we need to make sure we can keep up.
Thankfully, there are more learning opportunities than ever before,
helping individuals and organisations address the skills gap.