Diagnosing the Talent Gap: What is it (and How Can HR Solve it)?

The skills crisis has steadily been worsening over the last decade, largely due to digitization and the technological boom we’ve experienced across the globe. However, recent events, such as the COVID-19 pandemic, have also accelerated this widening skills gap.

Couple this with automation and the fact that technologies and business models are always evolving, and it’s easy to see why the demand for new skills far outweighs the number of qualified candidates.

This is causing problems for both businesses and their workforce. In fact, a global survey from McKinsey has found that nearly 90% of organizations say they’re already facing a skills gap, and those that aren’t expect to see this develop within five years.

Not only this, but an estimated 375 million workers globally might have to change jobs over the next decade in order to meet organizational demands. 

This shows that not only are businesses struggling to find skilled professionals, but professionals might potentially lose their jobs, have to retrain or start from scratch in a new industry.

Clearly, the global talent shortage is a very real challenge that organizations are facing right now. But it’s not all doom and gloom: being able to diagnose talent shortages and put effective measures in place to address the problem is the key to bridging the gap.

Read on to find out more about diagnosing and addressing skills gaps in your business.

• What is a talent gap?
• Diagnosing the talent gap: How does it happen?
• Why dealing with talent gaps is important
• What is skills gap analysis?
• 7 ways HR can close the talent gap
• 4 benefits of analyzing and addressing your skills gap
• How companies are addressing the skills gap
• How technology is helping to close the skills gap
• Final thoughts

What is a talent gap?

In recent years, ‘skills gap,’ ‘talent gap’ or ‘talent shortage’, as it’s also known, have become industry buzzwords. But what does the skills gap actually mean?

Put simply, a skills gap is when the current workforce doesn’t have the correct skill set required to do their jobs effectively or to help the business reach its goals, and are in need of further development or training.

Diagnosing the talent gap: How does it happen?

We’ve briefly addressed some of the main causes of the global talent gap, but let’s look in more detail at the specific reasons why these gaps might form within a company. In many places, the skills gap continues to widen because of: 

• Automation: More jobs are becoming automated or obsolete, making room for newer positions. This might seem great, but newer positions call for new skill sets that many professionals don’t have
• New technologies: It’s not just automation; all kinds of new technologies emerge every day, often requiring skills that professionals don’t currently possess
• Lack of soft skills: Although the younger generation may be more technically savvy, plenty still lack the basic communication and soft skills that companies need
• Not enough skilled graduates: Lots of in-demand jobs aren’t getting a big enough supply of skilled graduates. For example, the number of people taking nursing degrees dropped by over 10% last year
• Poor recruitment processes: Relying on automated or weak recruitment processes means that many employers fill job descriptions with a list of ideal requirements that most applicants won’t meet. This results in low match rates, fewer candidates or hiring the wrong people
• Lack of training: Too many businesses fail to offer the right training or any at all. In fact, 59% of employees claim that they’ve had no workplace training and that most of their skills are self-taught
• Inadequate compensation: Unfortunately, lots of organizations don’t offer competitive enough salaries for highly skilled and in-demand jobs