The Skills Gap Is Growing. Upskilling and Reskilling Can Help Close It
No matter how much you spend on raw materials, equipment, and technology, you still need employees to make decisions, troubleshoot problems, and ensure your company meets its goals, so it’s no exaggeration to say that employees are your organization’s greatest resource. And in some cases — especially with the right education and retraining — they can be a renewable resource.
Unfortunately, many employers are struggling to address major skill gaps or discrepancies between the skills they need and the skills employees already have. The Society for Human Resources Management estimates nearly half of all workers will need retraining within this decade, making this a pivotal moment for businesses.
What Is Causing the Current Workforce Skills Gap?
Societal changes are the biggest contributor to the current skills gap in American workplaces. The rapid development of artificial intelligence has eliminated some jobs, leaving displaced workers without the skills they need to find comparable employment opportunities. As baby boomers retire, they’re also taking decades of knowledge and skills with them, leaving behind younger workers who haven’t had as many learning opportunities.
Writing for the Harvard Business Review, Michael Hansen notes that there’s also a mismatch between the workforce and the public education system. Even high-quality schools aren’t necessarily graduating students with the skills employers need in today’s competitive marketplace. Employers also shoulder some of the blame, as they tend to value formal degrees over career training and life experience.
The skills gap can also be attributed to these factors:
- Lack of on-the-job training opportunities
- Lack of skilled workers available where employers need them
- Enhanced automation
- Early retirements during the COVID-19 pandemic
- Increased demand for remote or hybrid work opportunities
No matter why the skills gap is happening in your area, it has the potential to become a big problem. By 2030, approximately 85 million jobs across the globe could go unfilled due to a lack of needed skills, resulting in trillions of dollars in lost revenue.
How Does the Skills Gap Affect Businesses?
On the business side, a workforce skills gap can have serious consequences. If employees don’t have the skills you need, you have to invest in additional training, increasing your labor costs. Employees without the right skills may not be able to complete tasks as quickly as expected, leading to reduced productivity. Over time, a lack of skills may cause your company’s reputation to suffer, especially if the skills gap results in poor customer service or reduced product quality.
A workforce skills gap also puts you at a major disadvantage when it comes to capitalizing on new opportunities. When employees lack the skills you need, it’s difficult to launch products quickly or penetrate new markets. If you don’t address the gap right away, your competitors will have plenty of time to outperform you.
How Can Companies Close the Skills Gap?
Upskilling and reskilling are two of the best ways to close the workforce skills gap. Upskilling refers to adding on to the skills an employee already has. For example, if you have an employee who knows how to perform basic functions in Microsoft PowerPoint, you might want them to develop intermediate or advanced skills. They already have some experience with PowerPoint; you just need them to dig a little deeper.
Reskilling involves learning a completely different set of skills. This is usually the best option if automation has made an employee’s skills obsolete. For example, an employee who performed a manual task on an assembly line might not have the skills they need to pivot to another industry, making reskilling critical.
Closing the Skills Gap in Your Company
Closing the skills gap starts with identifying roles that are likely to become obsolete due to automation. Once you do that, assess each employee carefully to determine if they’re adaptable enough to participate in upskilling or reskilling. This makes it easier to address the current workforce skills gap and promotes loyalty.
Another option is to revamp your company’s learning and development initiatives. If your current training program consists of one session per year, start offering on-the-job training, certification classes, and other development opportunities. Encourage employees to enroll in college classes or pursue professional certifications on their own. These new opportunities will give employees a strong foundation for developing new skills.
Instead of focusing on formal education, you can also address the skills gap by shifting to skills-based hiring. This approach emphasizes skills, not degrees and certifications, so you may be able to find highly motivated employees who already have the skills you need. For example, someone who’s been working as a plumber for 20 years may have a broader range of skills than someone who just graduated from trade school.
Finally, make sure your organization promotes continuous learning. Employees need to know that learning isn’t something to check off a list. It’s an activity that can lead to career stability, job promotions and increased compensation.
As an owner of the Dale Carnegie Mid-Atlantic franchise, McKonly & Asbury is able to offer an extension of services to our clients and friends of the firm, expanding our expertise in the areas of leadership, team building, and people development as Dale Carnegie offers programs in leadership, management development, customer engagement, service, sales, communication, and more.
About the Author
McKonly & Asbury is a Certified Public Accounting Firm serving companies across Pennsylvania including Camp Hill, Lancaster, Bloomsburg, and Philadelphia. We serve the needs of affordable housing, construction, family-owned businesses, healthcare, manufacturing and distribution, and nonprofit industries. We also assist service organizations with the full suite of SOC services (including SOC 2 reports), ERTC claims, internal audits, SOX compliance, and employee benefit plan audits.
