Why The Skills Gap Is Still Growing
As industries continue to move towards a new, digital era of work, the skills gap continues to grow across the workforce. To give you an idea of the extent of the gap, take a look at some of these staggering statistics:
60% of U.S. employers have job openings that stay vacant for 12 weeks or longer (Careerbuilder)
Nearly 80% of Americans agree there is a skills gap, and more than 35% say it affects them personally (Udemy)
The skills gap could leave a damaging $2.5 trillion impact on the U.S. economy over the next decade (Deloitte)
To put that last statistic into perspective, that around $250 billion a year. The skills gap is real and impacting businesses like yours every day. It’s time for business leaders to take action to address gaps in their workforce.
Why Is It Important for Companies To Address The Growing Skills Gap?
Cost. Yes, the skills gap is predicted to take a big chunk of change from the U.S. economy, but how does that impact individual companies? According to a recent study, 60% of U.S. employers have job openings that stay vacant for 12 weeks or longer. On average these vacancies are costing employers up to $800,000 annually.
Productivity. 55% of employers say they have seen a negative impact on their business due to extended job vacancies. One of the most significant adverse effects is productivity loss, which directly affects performance outcomes. Growing costs and lower productivity is a recipe for bad business.
Why Is The Gap Still Growing?
Technology Advancements. Digital transformation is sweeping the economy and the trend isn’t limited to technical industries. Today, nearly 80% of companies are in the process of digital transformation. Finance, retail, manufacturing, and even law are all experiencing a new demand for technical skills. However, the workforce hasn’t caught up to the growing demand.
While technology rapidly changes, people are slow to change. 1 in 5 workers says their professional skills are not up to date. It takes time for people to learn the skills necessary to fulfill new roles in fields like computer science.
According to a White House fact sheet, “Computer science is not only important for the tech sector, but also for a growing number of industries, including transportation, healthcare, education, and financial services, that are using software to transform their products and services. In fact, more than two-thirds of all tech jobs are outside the tech sector.”
Education Is Struggling to Keep Up. Employees aren’t the only ones lagging behind the technology curve. Education programs, the foundation for the future of the workforce, are struggling to provide the proper training in necessary STEM skills.
According to a recent survey, Nine in 10 parents want their child to study computer science, but only one in four schools teach computer programming. This disconnect reflects a lack of coordination between the supply and demand sides of the job market. Employers and educators need a better way to communicate the needs of businesses.
Lack of Training. In a survey conducted by MIT Technology Review, “manufacturing survey data indicate that only half of U.S. plants provide formal training to their production workers. By contrast, in the 1990s—the last period for which nationally representative survey data on training are available—70 to 80 percent did so.”
Companies are trying to fill positions through hiring instead of offering training to their existing workforce to strengthen areas of weakness. Technical skill sets are scare in the job market. This outward strategy is leaving employers with long-standing vacancies that are damaging their workforce’s performance and their bottomline.
Related Post: 4 Key Reasons To Grow Your Workforce Internally
No Defined Strategy. Many business leaders have not implemented a strategy that defines how they will address the skills gap in their own companies. Many continue to rely on informal techniques, like internal networking, to identify gaps in skill sets instead of leveraging data to understand the current skills and capabilities of their workforce.
Without a well-defined strategy, companies cannot effectively address their workforce needs. They cannot successfully communicate their skill needs with educators. They cannot implement effective training programs. They cannot align their recruitment needs to fill the gaps in their workforce.
Bottom-line: Your company must have a strategy to address the skills gap hindering your workforce’s potential.
Related Post: 4 Myths About Tracking and Identifying Skills Gaps
What Can Your Company Start Doing Today To Address The Skills Gap?
Invest in Skills Planning. Skills planning is a tool that allows you to identify the current skills and capabilities of your workforce. It helps you recognize skill gaps and provides a clear vision for how your workforce needs to change or grow.
Skills planning starts by tracking data on your current skills and capabilities. Instead of estimating or guessing employee skill sets, data provides you a reliable, concrete path for how your workforce needs to change. You will know your employees’ exact strengths and weaknesses for both hard and soft skills, allowing you to develop a data-driven foundation for your action plan. After you collect the data, use visualizations to show clear, actionable insights quickly so that you can make effective business decisions efficiently.
Related Post: The Power of Data Visualization
Now that you understand the current skills and capabilities of your workforce, you can use this information to identify the gaps and growth opportunities. What does your ideal workforce look like? Do you need more skills in a particular area? How will you reach that ideal state?
Use your insights to develop training programs, align recruiting needs, collaborate with educators, or outsource skills. Whatever path you choose to take to address the gap, your investment in skills planning will ensure your skills align with the needs of your workforce.
As the skills gap continues to impact our economy, business leaders must take action to address gaps in their own workforce. The result could mean hundreds of thousands of dollars saved, high-performance outcomes, and an advantage over your competition. Take the necessary steps and invest in skills planning to ensure your company continues to succeed and grow.
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