Here's How HR Leaders are Dealing With the Skills Gap [Research + Stats]


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Wednesday, May 31, 2023

How are HR leaders and businesses attempting to close the skills gap and enhance their L&D strategies? Here's what the research says.

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Here's How HR Leaders are Dealing With the Skills Gap [Research + Stats]
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The times are changing for businesses. The last 3 years have brought unprecedented changes on every department, and forced organizations to assess – and adapt – every aspect of their operations for the new world of work.

At the forefront of this shift are new innovations in technology. Digital transformation initiatives like cloud computing are helping businesses find better ways to serve customers, optimize processes and empower employees – but they’re also creating significant challenges for HR teams.

Dealing with the skills gap ‘crisis’ is high on the agenda for all departments, as businesses struggle to upskill their staff or recruit new talent at the pace of technological change. But it’s HR that bears the brunt of this burden.

So what exactly are the skills that organizations are most in need of? How are these deficiencies impacting business? And what are HR leaders doing to fill these gaps?

To find out, we surveyed 210 HR professionals, from managers all the way to the C-Suite, across the US and the UK. These respondents worked for businesses with at least 250 employees all the way up the largest enterprises with over 25,000. Here’s what the data tells us:

The skills gap is not a passing trend – it’s a significant priority for HR leaders

IFP HR Report Visual L&D Challenges

When asked to select their biggest L&D challenges, the skills gap was selected by over two-thirds of respondents (69%) – the fourth most voted option behind improving soft skills and emotional intelligence, developing a collaborative learning environment and ensuring learners are engaged.

Digital skills are lacking

When asked to break down further the skills their businesses are lacking, digital skills such as software usage were most frequently cited (61%) – expertise in more technical areas (e.g. programming) was only just behind at 59%. This illustrates that the depth of the digital skills gap in businesses extends from end users and entry-level positions all the way to dedicated IT teams and tech professionals, so it’s no surprise that dealing with the skills gap is such a priority.

Learn more: 5 Steps to Conduct a Skills Gap Analysis

IFP L&D Report Visual Skills Gaps

Soft skills are in high demand

Along with needing to recruit staff with experience in new software and technical requirements, there’s high demand for employees for soft skills such as communication, leadership and teamwork.

After a turbulent beginning to the decade and in the era of hybrid work, these skills are of utmost importance – particularly among managers. The ability to communicate and lead teams who are often spread over different locations (and even time zones) effectively is central to being able to respond to the unforeseen and engage and retain employees.

Skills gaps are having a significant impact on business

IFP L&D Visual Impact of Skills Gaps

The lack of soft skills and emotional intelligence could be the reason why a higher rate of staff turnover is the most significant impact of the skills gap, according to our respondents (68%).

With The Great Resignation raging on and the power dynamic between employers and employees shifting, it’s likely that the deficiency in these skills also explains the lower levels of morale cited by HR leaders.

Skills gaps are also impacting the quality and efficiency of work. Almost two-thirds (63%) claim they’ve noticed a lower-quality of work as a result of skills gaps, perhaps due to both a lack of employee engagement and a lack of technical expertise. A knock-on effect of this is reduced productivity – which is cited by 60%.

All of the above are contributing to larger, more strategic impacts – namely an inability to expand the business (33%) and even a loss of revenue (21%).

So what can be done to bridge the skills gap?

IFP L&D Report Visual Measures to Overcome Skills Gap

HR leaders are working hard to close the skills gap, but rather than looking externally to find the expertise they need, they’re more often focusing on developing internal talent via the following methods:

Continuous learning – 69%

Continuous learning is the ongoing process of acquiring new skills and knowledge, with a focus on self-initiative and taking on challenges. It can take many forms, including formal learning, social learning and self-directed learning.

Develop a reskilling program – 53%

Reskilling refers to the process of learning new skills needed for a different job or position within an organization. It’s different from upskilling, which adds to existing skill sets. The World Economic Forum has declared a reskilling emergency due to changes in technology and economic demands, and disruptive events such as the COVID-19 pandemic.

While these were two of the most popular initiatives among our respondents to tackle the skills gap, plenty were leveraging the job market and using modern recruitment techniques to fill roles, such as establishing an internship to attract, identify and foster talent (57%), leveraging analytics to forecast needs (50%) and monitoring the competition (30%).

Access the State of Learning & Development research report

For more detailed insights into the current state of L&D, including more statistics on the skills gap, employee engagement and the different learning methods and L&D initiatives of HR leaders moving forward, download the full report here.

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