What Does A Skills Gap Mean?

Today we’re going to discuss a common expression heard in so many industries, a “skills gap,” discover how much it’s costing both employees and companies and provide solutions on how can a skill gap be closed. 

What Is A Skills Gap?

A skills gap refers to the difference between the skills that employees currently possess and the skills that employers need to meet the job demands.

The term has become increasingly prevalent in recent years, as advancements in technology and shifting economic conditions have led to a widening gap between the skills that workers have and the skills that employers require.

The expression “skill gap” first emerged in the late 1990s and early 2000s, as the rise of automation and globalization created a need for workers with more specialized skills.

However, it has become even more relevant in recent years, as the pace of technological change has accelerated and the job market has become increasingly competitive.

How Does a Skills Gap Affect Everyone?

One of the places with the most pronounced skill gaps is in the United States.

According to a report by the National Skills Coalition, nearly 7 million American workers are unemployed or underemployed due to a lack of skills.

Additionally, the report estimates that by 2020, there will be a shortage of 5 million workers with the skills needed to fill in-demand jobs.

But the United States is not alone in facing a skills gap.

Countries like the Philippines, Germany, and Japan also need help with skills shortages, particularly in specific sectors such as manufacturing and technology.

The United Kingdom also faces a skills gap, particularly in industries such as healthcare and education.

A study by the ManpowerGroup found that 32% of employers worldwide need more suitable candidates with the skills to fill job vacancies.

This can result in increased recruitment and training costs for companies and lost productivity and revenue.

The financial impact of the skills gap is not limited to companies.

It also affects individuals needing the skills to compete in the job market.

According to a report by the Economic Policy Institute, workers without a college degree are more likely to be underemployed or unemployed and to earn wages lower than their more educated counterparts.

The report estimates that workers without a college degree earn, on average, 20% less than those with a college degree.

Skills gaps are costing U.S. companies an estimated $1.2 trillion per year in lost productivity and revenue. Imagine the economic impact of a skill gap worldwide.

Additionally, it can make it difficult for companies to fill key roles and meet job demands, resulting in increased recruitment and training costs.

The skills gap also affects individuals financially, with those needing more skills facing lower wages and difficulty finding employment.

How Are Companies Helping To Close A Skills Gap?

To close the skills gap, corporations have taken a more proactive approach.

One proven effective solution is investing in employee training and development programs.

For example, IBM has created an internal “Talent Development Program” to address the skills gap within the company.

The program focuses on investing in employees’ skills and knowledge across all company levels and has led to a more skilled and engaged workforce.

Another example is the McDonald’s Corporation. The fast-food giant has invested in an “Archways to Opportunity” education program, which provides its employees with the opportunity to earn a high school diploma, college credit, and even a college degree.

This program aims to provide employees with the skills they need to advance their careers within the company and help close the skills gap within the organization.

Investing in employee training and development is beneficial not only for the employees but also for the company.

A more skilled workforce can lead to increased productivity, higher retention rates, and a stronger competitive position in the marketplace.

Corporations can also close the skills gap by partnering with educational institutions and organizations.

For instance, General Electric (GE) has partnered with the nonprofit organization, Skills for America’s Future to provide training and support to community college students to prepare them for jobs in the advanced manufacturing industry.

GE believes that the partnership helps to prepare the next generation of workers and provides them with the skills they need to succeed in the company.

In addition, GE also partners with the online education provider, Coursera, to offer a series of online courses that help to prepare workers for jobs in the manufacturing industry.

GE believes this partnership will help to meet the company’s workforce needs and help to close the skills gap.

Finally, it is essential to note that closing the skills gap is not just the responsibility of corporations but also the government, educational institutions and organizations, and the individuals themselves.

The government can invest in education and training programs, educational institutions can offer programs that provide students with the skills for in-demand jobs, and individuals can acquire new skills through training and education.

Innovative Schools Closing The Skills Gap

Another example of an innovative approach to closing a skills gap in schools is the “Apprenticeship” model, which is being implemented in several countries such as Germany, Switzerland, and the United Kingdom.

Apprenticeships provide students with on-the-job training and mentoring in a particular field, such as manufacturing, construction, or healthcare. This allows students to gain practical experience and skills while also earning a salary.

Apprenticeships often lead to full-time employment after the program is completed.

Additionally, many apprenticeship programs include formal classroom instruction, allowing students to earn a recognized qualification in their chosen field.

Another example is the “Triple Helix” model, which is being implemented in schools in the Netherlands.

This model involves collaboration between schools, businesses, and the government to create more opportunities for students to gain relevant skills and experience in the local job market.

The goal is to create a more seamless transition from education to employment for students.

A third example is the “Tech-Voc” track in high schools in the Philippines, which aims to provide students with technical and vocational education and training (TVET) in fields such as information technology, electronics, and engineering.

The program includes both classroom instruction and hands-on training and aligns with the needs of local employers.

It’s also important to note that schools at all levels must prioritize reskilling if they want to keep up with industry standards.

Where To Start If You Are Unsure Where To Begin

A skills gap is something everyone has regardless of age, experience, and the industry you work in at your job.

To figure out where to begin can become daunting and seemingly impossible.

That’s why this article will help you get started.

First, conduct a skill gap analysis to gain a comprehensive understanding of all of your strengths and weaknesses. (I discuss this on the dashboard page).

After completing the analysis, I suggest accessing Illuminate to ensure that you didn’t miss any skills and update your analysis.

From there, identify which ones will be the easiest to acquire and scale out from there.

Build in time for reviews and, eventually, look for additional certifications to add to your newly found knowledge.

The skills gap refers to the difference between the skills that employees currently possess and the skills that employers need to meet the job demands.

Countries around them meet the demands of the job.

It is a growing problem that affects not only the United States but many other countries worldwide.

To close the skills gap, corporations have begun to take a more proactive approach by investing in employee training and development programs, partnering with educational institutions and organizations, and providing opportunities for employees to acquire new skills.

These efforts benefit the employees and the company as a whole by increasing productivity and competitiveness.

However, closing the skills gap is not just the responsibility of corporations but also the government, educational institutions and organizations, and individuals.

Working together can bridge the skills gap and ensure that workers have the skills they need to succeed in today’s rapidly changing job market.

We’d love to hear your thoughts on what is needed to close a skills gap, and are there any resources to share?  Comment below, as this topic should be important to everyone.