How To Understand and Address Your Company’s Workforce Skills Gap

As business models and technologies are rapidly evolving, organizations need to carefully assess and evaluate their workforce skills gap. Even though the key drivers of productivity, profitability and growth in an industrial or manufacturing organization are efficient machinery and other equipment, employees need to be skilled enough to manage and operate them.

Per McKinsey Global Survey on future work trends and needs, 9 out of 10 managers and executive leaders say that their organizations are already facing a workforce skills gap or will face skills gaps in the next five years. A research study by PwC shows that by 2030, the talent shortage and skills gap in the U.S. alone is expected to total a loss of $8.5 trillion. Per the State of the Skill 2021: Endangered Survey by Degreed, organizations and even employees themselves are anxious about the broadening skills gap, with 46% of those surveyed believing their current skill set will become irrelevant by 2024.

Therefore, your organization should also begin focusing on your workforce skills gap and equip your people with the tools and skills they need to enhance their productivity and help your business grow.

How a Skilled Workforce Can Benefit Your Organization

In today’s rapidly changing industrial landscape, organizations rely heavily on the expertise and skills of their workforce to become commercially successful. It’s time organizations should realize that the future of work is changing.

A skilled workforce can help organizations gain an advantage over their competitors and create a dynamic work environment when employees constantly innovate and showcase the eagerness to upskill and grow.

Therefore, identifying and fixing your workforce skills gap should be one of your top priorities. Addressing workforce skills can help your organization deliver on its overall growth strategy. Moreover, investing in skill enhancement can also help in boosting employee productivity and satisfaction.

Why You Must Understand and Identify the Skills and Gaps of Your Workforce

For years, organizations have believed in filling skill gaps of the existing workforce by hiring new employees. However, due to the uncertainties caused by the COVID-19 pandemic in the hiring space, everybody is hiring but nobody is getting hired. As a result, it has become challenging to find candidates with the right skills and experience.

By the time organizations identify and begin working on filling the skills gaps of their workforce, it’s too late. They end up with hampered business productivity and losses.

This is why you must continuously assess your workforce skills gap.

Build a Comprehensive Skill Gap Analysis Strategy

First things first: identify business areas in your organization where you need to conduct the skill gap analysis. Consider the following business areas:

  • Customer service
  • Data and analytics
  • HR and talent management
  • Executive management
  • IT
  • Operational management
  • Sales and marketing operations
  • Research and development
  • Product management
  • Sourcing, procurement and supply chain management
  • Finances and risks management

Second, use a skills gap analysis template to evaluate the skills of your workforce. Begin by defining the most valuable workforce skills for your organization currently and for the future. Avoid getting too precise and look at an overall picture. Your organization can assess the employee skills on the following parameters (a few examples):

  • Leadership
  • Teamwork
  • Innovation
  • Communication
  • Analytic thinking
  • Solution-oriented mindset
  • Technology expertise

According to the World Economic Forum, more than 50% of employees around the world need to reskill or upskill by 2025 to leverage the latest technological advancements, such as automation. But the question remains, how do organizations close the identified skill gaps?

How Organizations Can Tackle Their Workforce Skills Gap

Organizations can manage their workforce skills gap by providing employees with different types of training and building a work environment where employees are constantly encouraged and motivated to develop and grow.

Coaching and mentoring are powerful tools organizations can use to help employees fix their skills gaps. Per McKinsey research, 46% of organizations believe that expert coaching is an efficient way to train employees.

Providing employees with relevant training in phases can help them hone their skills over time.