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Updated on April 12, 2024
A talent shortage occurs when there aren’t enough qualified candidates to fill certain positions at a company because they lack the required skill set, often leading to a situation where the demand for these skills exceeds the available supply.
Talent shortages are more common in some industries than others, with health care, education, information technology, consumer goods and services, transportation, and communication services frequently topping the list. This talent gap may continue to grow in the future.
According to a report by Korn Ferry, “more than 85 million jobs could go unfilled [globally] because there aren’t enough skilled people to take them.” If not addressed, this could result in unrealized annual revenues of $8.5 trillion by 2030. Notably, the United States may face a shortage of over six million workers by 2030.
The takeaway is that a lack of available talent can sometimes pose a significant challenge for employers that have open roles requiring highly skilled candidates. This may result in:
A talent shortage can occur in any industry. However, studies have found that the education and health services sector, along with the professional and business services sector, tend to consistently have the highest number of open positions.
There’s a number of reasons why some employers are facing challenges when filling certain roles.
Global pandemics
The talent shortage in the US has been rising for over a decade. One of the most notable culprits in recent years has been the COVID-19 pandemic, which caused massive disruptions in the US workforce, resulting in the Great Resignation, which began in 2021 and peaked in 2022. Although quit rates have decreased since then, they remain high, and hiring rates are struggling to keep up.
Skills gap
A skills gap refers to the difference between the skills needed to perform a job and the skills an employee actually possesses. This disparity creates a talent shortage for the employer because these staffers lack the necessary skills and expertise to carry out their responsibilities. In a 2024 survey by Springboard for Business, 70% of leaders said there is a skills gap at their company and that it’s negatively affecting business performance.
In addition:
Other factors that may cause talent shortages include:
In the Springboard survey, 63% of leaders ranked “helping employees build more skills for their current job (upskilling)” as their top priority for addressing the skills gap in the next year.
Employers can take these additional steps to overcome talent gaps (which can be a “win-win” for both parties):
Lastly, leaders should support continuous learning by allocating resources and granting employees time to engage in job-specific learning activities. Leaders themselves should set an example by participating in continuous learning to improve their leadership skills.
“Because the job market is always changing, we have implemented preventative measures to combat talent shortages, including blended workforce options.”
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