Closing The Skills Gap

Today’s post comes to us courtesy of board member Dan Schawbel, Research Director at Future Workplace and author of Back to Human: How Great Leaders Create Connection in the Age of Isolation.

The skills gap continues to persist in America and on the last business day of February of this year, there were 6.1 million job openings, with little changed from the previous month. Companies, and employees, both suffer when job openings go unfilled, especially over a long period of time. The average cost HR managers say they incur for having extended job vacancies is more than $800,000 annually. In a new survey by Future Workplace and The Learning House of 600 U.S. HR leaders, with half representing small businesses of fewer than 1,000 employees, we found that almost half of companies are blaming colleges for not preparing students for jobs. A third of those surveyed agree that colleges are most responsible for getting an employee ‘work ready’ yet more than 40 percent of companies have not collaborated with colleges to make curriculum more responsive to workplace needs.

With the intense pressure to fill critical job roles, some companies are bypassing colleges altogether. The failure to close the skills gap has resulted in stalled growth, a stressed workforce and a lack of innovation. The study found that companies are turning to other channels and technologies to solve this problem. An entire 90 percent are dropping the four-year college degree requirement and are now more open to hiring candidates with a recognized certification (66%), online degree from a MOOC (47%) or even a digital badge (24%). Both EY and PwC have already dropped the traditional college degree requirement and are hiring non-traditional candidates to broaden their talent pools. The smaller companies surveyed that have less of a brand presence, and fewer resources, were more open to hiring untraditional candidates because they have to be more agile and less selective.

In addition, 40 percent of employers believe artificial intelligence (AI) will help fill the skills gap by making hiring more efficient, eliminating unconscious bias and taking over routine tasks. The study found that employers are only investing $500 in the training and development of each employee and 40 percent are outsourcing to vendors to handle it instead. The smaller companies surveyed have less money to invest per employee, which skewed the results, while companies like AT&T, who announced they are investing more than $1 billion to retrain over 100,000 workers.

Companies are under pressure to fill their skills gap in new ways out of desperation and a realization that colleges simply can’t keep up with the ever-changing demands of the marketplace.

Photo by Adrian Williams on Unsplash

3 thoughts on “Closing The Skills Gap

  1. Well written and thought provoking… As someone who is deeply involved in the public higher education sector, I wonder if public universities will consider retiring the nearly century old paradigm of “publish or perish”, which is intended to be an individual level paradigm with both individual and organizational implications, and replace it with a broader paradigm, such as “evolve or perish” which could include the publishing aspect but not be keenly focused on just in that key individual outcome. While I have witnessed first hand how challenging organizational change can be in a public higher education environment, external factors tend to be highly motivating toward responding to the needs of the community. Your article really makes this point evident, albeit subtly, and the next decade or so regarding how universities either adapt, and rather quickly, or begin to experience a reduction in enrollment (an outcome many universities have not experienced in recent history), will be truly interesting to witness. Ultimately, the skills gaps will be filled – we just don’t know yet “when” and “by whom”.

  2. Great article and perspective. In the tech sector I’d suggest that the skills gap / lack of depth in the talent pool challenges that we’re all facing… especially from a diversity point of view… starts very early… at the K-12 level. The vast majority of public school systems have demonstrated that they are not equipped, from either a curriculum or an expertise perspective, to put more students on a path towards a career in our industry. Not surprisingly, using the same K-12 approach that has been employed for years is yielding the same sub-optimal results… students are not pursuing technology-related majors. Colleges therefore have a limited ability to impact the depth of the technology talent pool, despite the clear need to do so. On the positive side, we are beginning to see more and more organizations start to make meaningful investments to change this long-standing trend. Your prediction that traditional college level (and possibly earlier) education may be replaced with more targeted, end-user funded development appears to be both real and accelerating from where I sit. On a smaller scale we’re also seeing some of the more agile colleges start to work more closely with companies in this area by developing company specific degree programs. Lots of energy that, when it becomes more focused, has the potential to add large numbers of qualified candidates to the talent pool.

  3. Recent Graduates needs experience to manage the skills they lack. However the market nowadays has become to competitive for entry level graduates as the companies expect more that what they are able to do as a freshers.
    In my opinion has mentioned in the article. AI should work has an bridge to overcome this skill gap.

    Sofia Taylor
    Business Analyst

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