The current global skill shortage is real. HR recruiters and managers struggle to find qualified candidates to fill open positions, costing businesses thousands of dollars annually.
- Employers spend more than $800,000 annually looking for qualified talent.
- Science, technology, engineering, and mathematics (STEM) industries are the ones experiencing the most significant skills gap. The lack of learning and development opportunities in the technology space contributes to this widening gap.
- Employee upskilling and reskilling programs can be the skill gap solution companies need to transform their workers into project-ready, billable, efficient resources to take on evolving tech requirements.
The impact of the COVID-19 pandemic on the global economy has been devastating, making the already existing skills gap broader. While on the one hand, the worldwide IT spend is increasing, on the other hand, finding the right talent or retaining existing ones is turning out to be a challenge for more than 50% of the IT companies. As a result of the labor crunch, the adoption of cloud computing and other digital technologies is moving at a very slow pace taking a toll on business performance, employee confidence, revenue gains, project volatility, and overall productivity.
Top 10 Skill Gap Statistics that Every Organization Should Know
Here are key stats about the skills gap that organizations must know to understand the current scenario of the global skill gap and its possible impact on businesses.
- 87% of McKinsey Global Survey respondents agree that they are already experiencing gaps now or are expecting them within a few years.
- Lack of digital skills could cost 14 G20 countries a loss of $11.5 trillion in cumulative GDP growth.
- By 2030, an estimated 85 million jobs will go unfilled globally due to skills shortages, resulting in a loss of $8.5 trillion.
- For 64% of L&D professionals, filling the skills gap through reskilling the current workforce is a priority now.
- Over the last three quarters, 79% of organizations have taken initiatives to address these gaps amid the tightening market for IT labour.
- The shortage of IT talent is a leading corporate concern, with 86% of respondents believing it will continue to slow down the cloud and other tech projects.
- 75% of HR professionals say there is a shortage of skills in candidates for job openings.
- The skills gap isn’t fixing itself or coming to an end. In the last few years, over 50% of companies feel that the skills shortage has worsened within their organizations, with only 10% of them reporting any skills shortage improvements.
- 46% of employees are anxious about the widening skills gap and anticipate that their current skill set will become irrelevant by 2024.
- According to a recent report, hiring new talent is only the first step toward bridging the skill gap for organizations. While on the other hand, 82% of employees and 62% of HR directors believe that workers will need to reskill or upskill at least once a year to remain competitive and address the skills gap.
What is a Skill Gap in Your Company?
Let us understand through a skill gap example. For instance, you run a software company and need someone who knows multiple programming languages for the developer job role. However, the employee happens to know only one language. The skill gap stands for this shortage of required skills, which can be improved through learning the missing craft.
To break into simple terms, ‘skill gap’ refers to the mismatch between the skills a company needs and the skills an employee/job seeker possesses.
Advantages of Bridging the Skills Gap
Upskilling and reskilling are mutually beneficial for employers and employees since closing skills gaps benefits both parties.
- Increased Retention and Engagement Of Employees
- A Workforce That Is More Prepared to Satisfy The Needs Of The Business
- A Tradition of Learning and Development
- Savings In Comparison to Recruiting New Workers
- Enhanced Efficiency in Their Current Position or The Capacity to Take Up A New Position
- More Chances for Development and Advancement
- Increased Self-Assurance and Spirit
- Increased Adaptability in The Face of An Environment That Is Changing Quickly
Closing the Skill Gap Through Upskilling and Reskilling at the Workplace
Over 36% of businesses globally are unable to identify and recruit skilled tech workers for open job positions and are, therefore, unable to deliver projects on time and achieve business objectives. By 2025, more than 50% of the employees worldwide would need to reskill/upskill in emerging technologies such as cloud computing, AI/ML, DevOps, IoT, Big Data, and more.
Bridging the skills gap would require efforts from both employers and employees. A strategic L&D initiative should be taken to encourage workplace learning and expansion of knowledge and skills. Based on the job role, skill requirements, and project needs, invest in employee upskilling and reskilling to not only close the skill gaps but also prepare your organization for future possibilities.
Start today: Before you strategize your employee learning and development action plan, do analyze the existing skill gap within your organization for a comprehensive understanding of what needs to be done and how.
Check out this Step-by-step Skill Gap Analysis Guide and learn what leaders like you can do to address the skill shortage to build a competitive and cloud-ready workforce.