How to identify and fix workforce skills gaps

The consequences of not addressing skills gaps extends far beyond individual performance. Without the right capabilities, businesses struggle to adopt new technology and see other long-term issues. While many businesses are using AI for automation and improved decision-making, for example, if employees lack AI skills, they’ll struggle to use this technology effectively.

What is a skills gap?

A skills gap is the difference between the skills a company needs and the skills its workforce already has. These gaps can exist at every level of a business and can include:

• Technical skills like cloud computing and cyber security.

• Digital literacy.

• Leadership and management skills.

• Project management skills.

A company could decide to adopt generative AI to improve for example. If employees lack the skills to use this AI responsibly and effectively, though, the business has a skills gap that could slow adoption and reduce overall return on investment.

It’s worth keeping in mind these skills gaps aren’t static. As technology evolves and companies prioritise change, skills gaps can shift to include areas that weren’t previously noticed. And, some skills could become less important in some roles.

Skills gap vs skills shortage

While they’re often used interchangeably, a skills gap and skills shortage are different challenges.

A skills gap exists within your current workforce. Employees are already in place, but they need additional knowledge or training to perform effectively or adapt to new responsibilities.

A skills shortage, however, can happen when there aren't enough qualified people to fill vacant positions.

Understanding the difference between these is vital because they both need a different response. Hiring new employees can address a skills shortage, but companies can often resolve skills gaps more cost-effectively by implementing structured learning initiatives and upskilling programmes.

What Causes Skills Gaps?

More than a few factors can cause skills gaps, with some of these depending on the industry itself. Some of the more common of these are:

Rapid technological change 

Emerging technologies like AI are transforming how companies operate. But, employees often need new technical skills to take advantage of them.

Changing customer expectations

Customers increasingly expect digital-first experiences, faster service, and personalised interactions, so employees need to develop and work on digital skills on top of customer-service skills.

Ageing workforce 

As experienced employees retire, companies risk losing valuable institutional knowledge and specialist expertise unless effective knowledge transfer programmes are in place.

Companies can end up experiencing one or more of these at various points, making it vital they take a proactive approach to upskilling and reskilling through employee training programmes. 

Latest skills gap statistics

Recent research shows just how widespread the skills gap has gotten:

1. The World Economic Forum’s Future of Jobs Report 2025 claims 39% of workers’ core skills are expected to change by 2030, creating significant demand for reskilling and upskilling.

2. The same report finds that 85% of employers plan to prioritise upskilling, making it one of their leading workforce strategies over the next five years.

3. LinkedIn’s Workplace Learning Report highlights that 49% of learning and talent development professionals say employees are concerned they don’t have the skills they need to execute a business strategy.

4. The same report by LinkedIn claims that 91% of L&D professionals agree continuous learning is more important than ever for career success.

These trends have a clear message; companies that invest in ongoing learning are better positioned to adapt to long-term changes.

How skills gaps impact Businesses

By ignoring skills gaps, there could be company-wide consequences, and these aren’t exactly going to be positive. The impact this has can be seen in multiple ways:

1. Reduced productivity - Employees who aren’t well-skilled in their roles will take longer to perform job-related tasks.

2. Increased cyber risks - Insufficient cyber security awareness and skills opens up the possibility of hacks and other cyber crimes in a business.

3. Lower employee retention - Employees are less likely to stay with companies where they can’t develop professionally. 

4. Slower innovation - Businesses can’t benefit from new technologies like AI as quickly as they’d like when employees struggle to use them.

These can often get worse as time goes on, with companies seeing a larger and larger impact if the skills gap isn’t addressed.

How to identify skills gaps

Before a business can close a skills gap, it first needs to find the skills gaps within their companies. Thankfully, this doesn’t need to be too complicated. The important steps to take here are:

Review Business Goals

Start by focusing on your business goals in the next three to five years and identify the skills needed to accomplish them.

Assess current skills

Review your employees’ current skills and see how these measure up against the skills needed long-term.

Speak to employees

Managers and employees often have valuable insights into the skills gaps that already exist.

Create a skills framework

Many companies create skills frameworks that define short- and long-term skills for specific roles, making gaps easier to fill.

These make addressing a company’s skills gap noticeably more straightforward.

How businesses can close skills gaps

Actually closing these skills gaps can seem complicated, but they don’t need to be. Instead, it could just be a matter of taking advantage of the right opportunities and strategies. Some of the more helpful of these include investing in:

1. Upskilling and reskilling

2. Apprenticeships

3. Leadership development

4. Professional certifications

Working with experienced professional development and learning organisations can be a great way to do this.

Building a long-term skills strategy

Closing today’s skills gap is important, but success depends on building a culture of continuous learning. Instead of reacting to skills gaps, companies should:

• Regularly review skill requirements

• Aligning learning with business objectives

• Support internal career progression

• Encourage continuous learning

Looking close your skills gaps? Get in touch with our team today.