what is a skills gap?
A skills gap refers to the mismatch between the skills an employer requires and the actual skills an employee has.
This can have devastating consequences for an organisation. If employees don’t have the necessary skills to complete projects, it reduces work quality and performance.
Below, we'll cover the causes of skills gaps, how it impacts your organisation, and how you can close the gap in just three easy steps.
what causes skills gaps in the workforce?
Let’s take a look at the most common causes behind skills gaps within the workforce.
lack of training
The workforce is evolving way faster than academic curriculums. For example, new tools and software systems automate various processes and organisations need talent with the skills to operate and manage these systems.
The problem is that universities and colleges don’t teach students this cutting-edge technology. If a student graduates and doesn't have these necessary skills, it creates a skills gap.
You can fix this issue by using a digital e-learning platform to train new employees on systems you’ll need them to manage and develop. However, setting these up can be tedious and expensive, making it impractical for some smaller businesses.
retired baby boomers
Research shows that nearly 1.2 million baby boomers left the UK workforce during the pandemic. These experienced employees know how to operate industry-standard systems. But when so many of them are retiring and the new generation doesn’t learn about the latest systems in school, it creates a serious skills gap.
So organisations try to fill these senior roles, but the lack of talent is evident.
Hiring from within is an excellent way to solve this problem. Current employees understand your work processes and values. With some training, it'll be easier for them to fill senior positions than new hires.
lack of soft skills development
Fewer and fewer secondary students are getting summer jobs. This means they don’t learn essential soft skills like communication, teamwork, and punctuality, which works against them when entering the workforce.
how does the skills gap impact your organisation?
Multiple studies show that a skills gap costs the UK economy £12.8 billion per year. This accounts for lost customers, lower productivity, and reduced work quality.
A skills gap also forces your organisation to spend more on hiring. Another study showed that filling a position can cost six to nine months of an employee's salary. So if someone earns £50,000, it’ll cost between £25,000 and £37,500 to replace them.
And the longer a position stays open, the more money you lose.
the importance of analysing the skills gap
These are the primary reasons why you should focus on analysing and closing the skills gap within your organisation:
it boosts work quality
Organisations must focus on analysing and closing the skills gap because it boosts work quality.
When the workforce doesn't have the skills required to complete projects, you'll have to hire an under-qualified candidate. This lowers work quality and limits your organisation's potential.
it saves money
You also save thousands when you have qualified talent ready to join your team at any moment. Instead of putting a job ad out for several months and hoping for a qualified candidate, you can have full confidence knowing that if someone resigns, you'll be able to fill their position quickly.
it improves client relations
By employing qualified talent and producing quality work, you improve your relationships with clients.
This effect is even more pronounced if your employees interact with clients directly. You can assign specific employees to clients with complete confidence, knowing they have the skills to deliver results.
how can you reduce the skills gap?
A few decades ago, companies simply hired new employees to fill skills gaps. But this is becoming harder as entire workforces become unqualified. So if you're struggling to find suitable candidates, follow this three-step guide.
step 1: optimise your hiring process
Most businesses jump straight into the learning part, but you need to optimise the hiring process first. You never really know how big a skills gap is. You may be making some errors in the hiring process, like not implementing an employee value proposition, causing top talent to walk away.
So use an applicant tracking system like hireful to streamline hiring and attract the best applicants. If you still can’t find the perfect candidate, there's definitely a talent shortage, so move on to step two.
step 2: identify priority areas
Next, identify areas where you need talent immediately. You can do this by comparing candidates' qualifications and experience within each position to what you're looking for.
The most common area with large skills gaps is tech, but this is spreading to marketing, manufacturing, and management.
step 3: offer e-learning
The last step is offering e-learning to new employees as it'll get them used to the processes you use at your company and the projects they'll be completing.
reduce the skills gap with hireful.
Analysing and reducing the skills gap is necessary for overall success as it impacts everything from customer experiences to ad campaigns and even employee management.
Fortunately, with the technology available today, closing the skills gap is easier than ever.
This is where an applicant tracking system like hireful can help. It allows you to streamline the hiring process, which sets your organisation apart and increases your chances of onboarding and retaining the best of the best.
So if you’re looking to save money and attract top talent, book a 15-minute intro call.