Exploring the Skills Gap for 2020

November 7, 2019 at 7:49 pm
Person creating steps with wood blocks.

Companies are looking for the missing pieces that will help them fill the skills gap.

The American education system is not perfect in many of the ways it imparts skills and information to students. Companies have long been frustrated with students who have gone through public or private schooling and college, but still don’t have the right skills to take a job in their chosen field–or sometimes in any field that’s hiring significant amounts of employees, depending on their major.

There has long been a skills gap that the economy seeks to fill in various ways, but the recent record-low unemployment numbers have intensified the existing skills gap until it has reached a critical level. In the United States alone, an estimated 6.5 million jobs cannot be filled because workers don’t have the right skills.

Skills Needed for Millions of Jobs

Around the world, the numbers are exponentially bigger. In advanced economies around the world, 95 million workers don’t have the skills they need to fill needed jobs, and in developing countries, another 45 million need skills development to close the gap.

At least 40 percent of employers say they are having trouble filling positions, and the number has increased since 2015. While the number of employers who say they are providing training and development for existing employees has nearly doubled from one in five to almost half, it’s still not enough on its own to close the skills gap.

Why a Widening Skills Gap?

Any time demand exceeds supply, as is the case in today’s U.S. job market and in many other places around the world, there will be some jobs that just don’t get filled due to a mismatch in skills. Let’s face it: the U.S. government isn’t doing much to encourage people to gain the specialized skills that would help fill more jobs.

Limited resources are available to give scholarships and aid to students who enter fields with shortages. Furthermore, schools and colleges are not making it clear enough to students that it will be more difficult for them to get good-paying jobs when they pursue liberal arts or women’s studies degrees rather than ones that require more specific skill sets.

With a little encouragement and knowledge, more college students would probably choose majors that would help with skills shortages rather than exacerbating the problem. Globally, however, there are different problems at issue.

Global Conditions Impacting the Skills Gap

Rapidly developing countries in Asia and Africa would seem like a good thing for the global skills gap. However, as workers become more educated and their incomes rise, they demand more goods and services, which need to be manufactured, sold, and delivered by other workers.

Rapid development and automation should help to close the skills gap over time, but in the meanwhile, it will persist even as poverty levels drop and more people around the world begin to enjoy a middle-class lifestyle.

Industries With the Biggest Skills Gaps

While many different industries have skills gaps and labor shortages, the biggest skills gaps are in skilled trades like plumbers, electricians, welders, etc. In the U.S., these shortages have been exacerbated in many areas because of the push for students with good grades to go to four-year colleges rather than trade and technical programs.

It is ironic that in American society, many skilled tradespeople make far higher salaries than most professions that require four-year degrees. A highly skilled plumber with a two-year trade school degree could demand upwards of $90,000 a year in many medium or large cities, while a public school teacher, for example, might only make $50,000-60,000 a year to start.

Other industries with large skills gaps include information technology, sales, engineering, and executives/management. Many of these jobs require specialized skills that usually aren’t taught in college programs.

Closing the Gap

Some HR experts have suggested that the skills gap will be closed by the advancement of artificial intelligence (AI) technology. In other words, machines will do a lot of the mundane work people are now doing, and maybe some that is very complex as well. Some AI technologies that can replace workers are already available, but adoption will take time and financial investment that not all companies are currently equipped to make.

AI will certainly play a part in filling some positions where employers currently struggle, but AI alone will not be able to close the skills gap. While machine learning is developing well, the likelihood of AI being able to engage in complex thinking required for collaboration, problem-solving, and other higher order processing is not high. For many positions, people will still be needed.

Colleges and universities should be encouraged to and rewarded for aligning their programs with skills companies identify as being in need. The government can take steps to funnel support dollars into fields with shortages, and even tie aid in some cases to pursuing a major that teaches needed skills.

Apprenticeship programs for trades are making a comeback to address shortages in key areas, and attempts to destigmatize these fields are also helping to funnel students there.

Employment Training: Addressing Gaps

It isn’t that employers don’t want to provide training so that their employees have the right skills to do the jobs that are needed–they do. However, the realities of corporate budgets are such that most companies cannot provide unlimited training to employees, as much as they might want to equip them with all the skills needed.

In addition, each employee needs different amounts of training to gain needed skills. It doesn’t make sense to give all employees the same training because their skill levels are all different. Employee assessments are a money-saving tool that can help to determine what training is needed.

Assessments can also be used after training to see what has been learned and which employees might need a little more help than others. Customized training solutions can be far more costly than a one-size-fits-all method. Assessments can help bridge this gap and save money without paying a much higher custom price.

Woman walking a tightrope with a briefcase.

Assessments can be one tool that helps companies know how to train employees.

Assessments Help Form Better Teams

Even when training isn’t part of the equation, assessments can be used in other ways to optimize and make the most of teams. A cognitive or behavioral assessment given to all employees could provide information about how to best combine them into effective groups that can build on their strengths and overcome weaknesses.

More well-rounded and effective teams can be a starting point to bridging the skills gap. Optimized teams can also begin to overcome skills shortfalls and accomplish more with less when new top talent isn’t readily available.

Getting Rid of Silos

Silos are stand-alone programs or departments that don’t integrate with a system so that they can function together. Training programs or departments in companies can be isolated from each other so that one doesn’t know what the other is doing. If the IT department teaches a few skills to its employees and the accounting department teaches different ones to different employees, it could be that much harder for them to gain all the skills needed to fill a forensic accounting position that requires all of those skills.

Programs with too many silos can also cause duplication of efforts and can be ineffective in passing on skills workers need to fill jobs with particular skill sets. Combining duplicated programs and sharing information about what works best for skills development is the way to get rid of silos and work toward closing the skills gap at the same time. Each time silos are integrated, it will be easier to discover what skills are needed and provide them to employees.

How the Skills Gap Hampers Progress

When it comes to the skills gap, time is of the essence. There are millions of unfilled jobs around the world right now. Duplicated or partial skill-building efforts will delay jobs being filled and impact businesses’ ability to grow and adapt. If nothing is done to bridge the skills gap, it will continue to widen as technology advances and workers will fall further behind in their skills.

Businesses with growth that is hamstrung by a lack of talent with the needed skills will hold back the global economy and prevent progress from happening. Workers need the right skills to unleash innovation and develop new ideas. Unfortunately, innovation and creativity suffer when employees are overworked or forced to focus more on keeping the company going without the workers it truly needs.

Companies need to discover ways to help workers get needed skills. Besides in-house training, companies can take advantage of outside learning opportunities, offer tuition reimbursement as part of hiring employees that show remarkable potential, and invest in flexible training opportunities that can happen outside of a typical workday so that employees can still be productive while learning.

Let Narish International help your company build higher-performing teams.