Evidence suggests that skill gaps in the workplace are a leading cause of performance loss within organizations. There is an enduring disparity in the skill-based needs of employers’ and the skills present in the workforce.
In a study done by CareerBuilder, 1 in 5 workers admit their professional skills are lagging behind and 92% of executives say they are aware of a skill gap in their own organizations. Across industries, there aren’t nearly enough skilled professionals to fill every unique job posting—in manufacturing alone, there are 3.5 million jobs open, yet only 1.5 million people have the skills to be effective in these positions.
Acknowledging the skill gap is necessary to train incoming employees so that they don’t contribute to the performance loss created by workplace skill gaps. Hiring to fill a skill gap can be challenging as 86% of the most qualified candidates for open positions are already employed and not actively seeking a new job. This creates prolonged vacancies—hiring managers are looking for candidates who possess desired skills to reduce the skill gap but end up still seeing profit loss from vacancies.
There are several red flags that indicate a skill gap within the workplace. One is diminishing returns—profits being lost are often evidence of employees’ skills not being up to par with industry standards. Another indicator of a business being negatively impacted by competency gaps is recurring stopgaps. The frequent use of temporary solutions results from team members not being able to finalize projects effectively. Once realizing that there’s a problem, employers need to specifically identify the source of the low performance by collecting data from departments and individuals.
Using Key Performance Indicators to evaluate and track employee success is the most effective way to identify who and what is hindering a business’s success. KPI’s determine how individuals contribute to the business and track career progression, compensation, rewards, benefits, and retention. A report comprised of all of these elements gives employers an accurate depiction of workplace competency.
Another method for identifying skill gaps is conducting 360-degree reviews. These reviews consist of gathering feedback from managers, peers, direct reports, and customers/clients of an employee. A 360-degree review is a great way of collecting qualitative data on an employee’s work ethic and temperament, rather than just numerical results.
After identifying what is causing the competency gap, employers should act quickly to reduce the risk of continued loss; they are faced with two options: train or dismiss. Although many factors go into the decision of whether to keep or fire employees, it may be more efficient to invest in extra training for those lagging in skills rather than letting them go.
Training and providing supplementary education for employees is more cost effective than firing/rehiring; it also builds culture and develops team building skills in trainers and leaders—which is beneficial for productivity and culture in the long run. Firing, on the other hand, may end up being costly due to the compounding cost of a vacancy.
Preventing Skill Gaps
Once the problem areas are treated, it’s crucial to be cognizant of the possibility of skill gaps developing in the future and constantly working to prevent loss. Employers can stay on top of competency gaps by keeping employees engaged, consistently utilizing KPI’s, and investing in ongoing training and educational programs to encourage growth.