Employees have been finding it challenging to find qualified candidates to fill millions of jobs. Research from Zippia shows businesses are waiting more than 40 days to find the right candidates, which is costing them over $4100 per employee hired. Korn Ferry’s report indicates employees might lose over $8.5 trillion in the next seven years due to skill gaps and shortages.
What is a Skills Gap?
It is the difference between a candidate’s skills and those the job requires. Sometimes, it is impossible to find candidates who meet all the requirements in a job description, and this is happening a lot in jobs that require employees to possess tech skills.
Employers have to keep jobs open longer, and some are starting to compare it with a labor shortage. If they cannot find the people they need to fill specific positions, the candidates they need might as well not exist.
Why The Skills Gap Exists
Various companies and research firms have concluded studies and come up with a few reasons the skills gap exists. The first is candidates holding degrees that are not in high demand. The National Center for Educational Statistics said that from the 2 million degrees earned in 2020, 280,000 were in psychology, history and social sciences. These fields are in low demand.
There is a high demand for science and engineering majors but not enough qualified candidates. Various organizations say they must start getting more people interested in these fields to close the skill gaps within them.
Lastly, the worker pool is thinning. The post-boomer generations have fewer people than those that came before them. Also, companies have not done enough to create infrastructure and structures that accommodate younger workers. For example, millennials and Gen Z say paid leave, family time, and childcare options are important, but businesses are not providing them.
How The Skills Gap is Impacting Companies
The most obvious effect of the skills gap is diminishing productivity. With fewer people working, businesses accomplish less than they otherwise would have. Managers and team leaders are forced to train employees who might not have some of the required skills, taking them away from their work.
There are also concerns about performance issues. Employees who do not have all the required skills are more likely to make mistakes and not perform to the levels required. This effect is felt most in manufacturing and technology sectors where accurate and high-quality work is critical.
Substandard products and lower productivity are also leading to lower-than-expected profits. Businesses are struggling to meet revenue goals that ensure their sustainability and growth.
Lower Global Competitiveness
Lastly, businesses are finding it more challenging to compete globally because they are falling behind. Also, global business owners who want to be acquired by companies like Parabellum Investments, a global private family office that invests in billion-dollar global private businesses, might have difficulty meeting this goal due to their non-competitiveness.
More businesses are realizing they no longer have access to the high-quality and qualified candidates they may have had in the past. There is a serious skills gap that businesses and other stakeholders should do something about quickly to ensure it does not destroy the economy.
