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An HR Glossary for HR Terms

Glossary of Human Resources Management and Employee Benefit Terms

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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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