Jason Leverant serves as the President and Chief Operating Officer of the AtWork Group, an award-winning national staffing firm.
Businesses are experiencing a whirlwind of changes in the labor market as they grapple with new technology and labor shortages. One of the most pressing challenges on their radar is the widening skills gap, a disparity between the skills employers need and the skills available in the workforce.
As our country’s economy boomed after World War II and we turned our focus from manufacturing to globalization and white-collar jobs, a skills gap slowly emerged that continues to grow today.
As Baby Boomers reach retirement age, we’ve seen a huge segment of the population exit the workforce, and there has not been a corresponding focus on training to replace these older workers. The shortage is particularly acute in sectors like technology, healthcare and manufacturing, where specialized skills are essential. Experts predict around 3 million trade jobs will be left unfilled by 2028.
Technology advances, including offshoring, the incorporation of artificial intelligence and other automation strategies, are further exacerbating the skills gap. At least 69% of human resources professionals said their organization has a skills gap, up from 55% in a similar survey in 2021, and many roles remain open, according to a study conducted by Wiley.
The consequences of the skills gap are far-reaching, affecting not just individual businesses but also the broader economy. The skills gap can impact a business’ productivity, growth and competitiveness. Companies face increased costs due to longer recruitment cycles and the need for additional training for underqualified hires. The average cost to hire a new employee hit $4,700 in 2022, and many employers believe the cost is much higher, SHRM reported.
As a staffing professional, I have nearly 20 years of experience helping businesses find qualified candidates. I’ve noticed that despite already being impacted by the gap, most businesses haven’t taken steps to solve it. Only 14% have conducted a skills audit, and just 24% established a skills and competency framework to support their efforts, according to a survey conducted by Salary.com.
To cope with the one-two punch of the skills gap and a tight labor market, businesses need to be proactive. Here are some strategic ways to respond to the skills gap and solve staffing shortages.
1. Invest in upskilling.
Despite technological advances, many companies expect hiring to outpace job disruption. One of the most effective ways to weather the skills gap is to invest in training and development for your existing workforce. Six out of 10 workers will need to update their skills by 2027.
In my experience, on-the-job training and education programs work, and the number of workers taking advantage of tuition assistance is increasing. Wiley reported that the proportion of respondents who said more than 5% of their workforce used tuition assistance rose from 61% in 2021 to 69% in 2022.
2. Leverage emerging talent.
Offering internships and apprenticeships can help build your future workforce and fill existing labor gaps. Around 50% to 60% of interns accept full-time jobs with a company where they hold an internship. It’s also a great way to see potential employees in real-world situations to determine if they’re a good fit. Former apprentices and interns require less training, resulting in a smoother transition than an employee starting from scratch.
3. Embrace a global workforce.
Embracing a remote workforce without borders allows you to broaden your talent pool. You’re not limited to finding a new hire close to the office or dealing with the hassle and expense of relocating talent.
Implement employee-centric remote work policies, such as focusing on work-life balance and allowing remote employees to have flexible schedules.
4. Rely on industry expertise.
Staffing agencies have the experience and knowledge to source employees with the right skills. They have relationships with educational institutions to find new talent as well as the resources to focus on overlooked talent pools, such as older workers or people with disabilities. Tap diverse talent pools to give your business a competitive advantage. Hiring contract workers can also fill labor gaps and specialized jobs on a project-by-project basis.
Staffing agencies can be invaluable resources for businesses facing a skills gap, but make sure to weigh the pros and cons. Sharing sensitive information with an outside firm elevates the risk associated with data security and confidentiality. Contract workers offer short-term relief to fill the gaps, but they still require training to get up to speed on company policies and procedures, which may be a burden on hiring managers. While staffing firms lower risk and provide qualified candidates, there’s a cost associated with their services.
Turn to a staffing firm with a solid reputation in your industry. Make sure to get recommendations from other businesses and focus on agencies with high retention rates.
5. Identify transferable skills.
Companies with a skills gap need to focus on the quality of their job descriptions. Many potential candidates may possess transferable skills that make them a good fit. Develop a list of soft skills that apply to the role, such as teamwork, flexibility and communication. After all, a significant part of job success is due to positive soft and people skills.
Businesses that are flexible and take a proactive approach to bridging the skills gap can succeed in creating an adaptable workforce for the future.
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