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What Is The Skill Gap Costing You?

According to a recent study from CareerBuilder, skills gaps cost a company more than $800,000 per year. For clarity, the skills gap is commonly referred to as the frustrating rift between what candidates have to offer and what companies are looking for. This leads to perpetually-open jobs and frustrated candidates at a minimum, but it can also contribute to reduced productivity, higher turnover, and revenue loss. The research points out that companies are having trouble finding the right people to fill positions, and it’s an issue regardless of company size:

  • 1-50 employees: 49 percent
  • 51-250 employees: 74 percent
  • 251-500 employees: 72 percent
  • 501+ employees: 71 percent

The problem has been around for quite some time, and at a macro level, it’s not going away anytime soon. On a company-specific level, there are activities that can help employers to not only understand their own skills gap, but to start filling it with internal and external talent.

Companies Aren’t Skills-Savvy

Even the discussion about a skills gap is somewhat misplaced, because these employers are focusing on jobs they can’t fill, not specific skill sets. And while we don’t advocate looking at employees purely as a set of skills under a biological disguise, it’s important to get comfortable with acknowledging what skills exist and how to leverage them. This focus on skills needs to be woven throughout the company’s talent practices:

  • Assessments: are you evaluating a generic set of criteria on each candidate, or are you examining the critical skills necessary for success in each role?
  • Selection: are your selection processes geared toward “gut instinct,” or hard skills measurements
  • Training: are you putting together yet another low-impact PowerPoint presentation, or are you seeking ways to develop the skills that create business value?
  • Recognition: are there processes in place to track progress and make employees feel that their efforts to acquire and demonstrate skills are recognized appropriately?

These and other talent practices can help employers to be more skills-savvy, adopting a mindset that skills are not only inherently valuable, but also a core element in a good talent management strategy.

Combating the Skills Gap

Quickly–what are the top three skills that matter the most to your business? Is it a specific sales discipline? Maybe it’s a consulting methodology. Or what about a technical coding skill?

To be fair, most business leaders would have trouble answering that question, because we’re not used to thinking in terms of discrete skills that our people have. At the same time, in the CareerBuilder study, nearly six out of ten workers said that they wanted to learn a new skill but couldn’t afford to. Our workers think about the skills side of the equation, but it isn’t a common boardroom discussion. There are three key areas that need attention to fix this gap:

  1. Peter Drucker said that what gets measured gets done, so if the problem truly is a gap in the skills that we have and what we need, then firms need to start measuring the skills inventory as a way to identify hotspots and other areas of improvement.
  2. Companies must get better about skill development. The number one reason people leave their jobs, according to Gallup, is because they want a chance to grow or develop professionally. Providing relevant development resources will reduce your turnover.
  3. Get clear on what skills drive business value. For some organizations, it’s going to be in how they consult with clients. For others, the skills that matter will be related to technology and software. Each firm is different, but understanding which skills drive business value is necessary in order to get buy-in from leadership to conquer your own skills gap.Organizations must get better about measuring, developing and tracking employee skills. Think about finding and fixing skill gaps. It’s a challenge, and it requires different thinking, yet every day high-performance employers are making strides toward success in this area. As we have pointed out, the value goes beyond the boundaries of talent and HR, extending to business areas like revenue, productivity, and performance.

P.S. To get a free personalized skill gap assessment click here.

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