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Terms and Definitions

What is a skills gap?

Updated: May 16, 2024

Skills gap definition and meaning

A skills gap is the difference between an employee’s current skill set and the expertise that’s required to perform their job duties effectively. When an organization has a skills gap, a number of staff members lack the qualifications required to complete specific projects or tasks.

The skills gap: An ongoing challenge for employers

The percentage of employers reporting talent shortages due to skills gaps has increased significantly over the years. According to Manpower’s 2024 Global Talent Shortage report, “Today, 75% of employers report difficulty in filling roles,” compared to just 36% in 2014. These talent shortages have an impact on employers of all sizes.

 

Other workforce management experts, including those from Fortune/Deloitte, recognize the impact these shortcomings can pose. Their 2023 survey indicated that labor and skills shortages are among the top challenges CEOs anticipate disrupting their business strategy in the next year.

 

Certain industries may be more susceptible to skills gaps. According to the Manpower report, the following industries experience the most challenges in finding qualified people:

 

  • Health care and life sciences
  • Consumer goods and services
  • Information technology
  • Transport, logistics, and automotive
  • Industrials and materials
  • Communication services
  • Financials and real estate
  • Energy and utilities

Which skill sets are hardest to find?

A 2022 Forbes Council article lists the skills gaps employers are most likely to come across, including:

  • Problem-solving and critical thinking
  • Managerial and supervisory skills
  • Communication and interpersonal skills
  • Teamwork
  • Negotiating skills
  • Digital and technology skills

 

The Manpower report further categorizes the most common soft and hard skills employers look for, but can be hard to come by, when recruiting job candidates.

 

Top five soft skills

  • Collaboration and teamwork
  • Accountability and reliability
  • Reasoning and problem-solving
  • Active learning and curiosity
  • Resilience and adaptability

Top five hard skills

  • IT and data
  • Engineering
  • Sales and marketing
  • Operations and logistics
  • Manufacturing and production

 

Keep in mind that skills gaps can vary by employee, role, and industry. While understanding the broader trends is useful, it’s important to assess your organization’s specific skills shortages.

Adverse effects of the skills gap on employers

When there’s a lack of qualified personnel working in an organization, it can lead to:

  • Decline in productivity, with fewer capable hands to do the job well. Some employees may have to spend less time on their own tasks so priorities don’t fall through the cracks
  • Decrease in profits, due to lower productivity and poor quality of work.
  • High turnover, as employees lacking essential skills leave (voluntarily or involuntarily).
  • Reduced competitiveness, as the company struggles to keep pace with competitors that have skilled workforces.

 

When skills gaps are not addressed, it can lead to long-term subpar employee performance, which can be detrimental to an organization.

 

Four tips for addressing skills gaps in the workplace

  • Conduct a skills gap analysis to identify shortages in your organization. This includes comparing the skills required for each role against those held by current employees.
  • Determine the skills your employees need to develop in order to bridge the skills gap. Obtaining the respective employee’s input is vital to this process.
  • Consider new learning and development strategies, such as digital apprenticeships, learning experience platforms, and more accessible tuition reimbursement programs.
  • Adopt a more detailed approach in your hiring process to ensure the selected candidate meets the necessary qualifications for the role.

Using skills gap in a sentence

“We are expanding our recruitment efforts to reduce the skills gap in our organization. This will help us find qualified candidates.”

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