Brad Zomick

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On the Skills Gap, All Sides Agree: A New Era of L&D is Needed

Articles L&D

When employers are asked about challenges in building the workforces they need, the vast majority cite a “skills gap.”

Eighty percent of employers “believe that the skills gap is real,” Adecco Staffing USA found in a survey.

Companies around the world report similar problems. It’s “a frustrating paradox,” the World Economic Forum says. “Many countries struggle with vast unemployment, underemployment and huge untapped labor pools beyond what can be attributed to the recent global economic slump. Yet, many industries struggle with significant talent shortages and skills gaps that are dampening economic growth.”

How can this be, and what does it mean for Learning & Development?

Understanding the skills gap

Joe Fuller, a Harvard Business School professor of management practice, says the problem stems from two main sources.

“First, employers don’t do a very good job of anticipating what they’re going to need, or working with skills providers to help ensure people are being educated in those skills,” Fuller says.

Instead, “a lot of employers want to play the spot market for labor.” When they realize they need someone with certain skills, “they want to be able to post a job and have somebody who’s ready to do the job, can fit into their workplace, succeed with their customers and take the job for the economics as offered.”

When they don’t find someone, “they throw up their hands in exasperation, saying, ‘Well, it’s market failure here because no one showed up.’”

Meanwhile, educators aren’t being evaluated on whether people who took certain courses learned skills that helped them get jobs, Fuller says. “Post-secondary schools get evaluated on matriculation. Grade schools are evaluated on graduation rates and standardized test results” — none of which, Fuller says, reflect “employability.”

The debate

Some economists say the “skills gap” is exaggerated or doesn’t exist.

It’s a complex debate involving numerous factors, including employer expectations and how much businesses are offering to pay workers. And as Boston University professor James Bessen wrote in the Harvard Business Review, “This issue has become controversial because people mean different things by ‘skills gap.’” (To learn about this debate, check out the HBR piece here.)

But for workplace L&D practitioners, the message remains largely the same from both sides: A new take on training is a crucial step forward — for workers, businesses and the economy.

New L&D efforts needed

“An obvious solution” to “virtually all the skill problems reported by employers is to increase training and produce the skilled workers they want themselves,” Wharton professor Peter Cappelli says in a paper arguing against the idea of a skills gap.

Meanwhile, Fuller, who believes a skills gap exists, calls for increased workplace training as well. “It’s becoming more important than ever,” he says. Curated training programs lead people to gain skills that benefit the company, Fuller notes.

And open talent development platforms let people teach and share skills that are relevant and helpful as well. “If you find something useful, you can post it on the platform and describe why it was useful. Effectively, you’re encouraging users who have some expertise in the use of that training to grade, evaluate, and describe why it’s of use — and that’s more likely to be efficient than HR saying, Here are the 25 approved courses,’” Fuller says.

LinkedIn found that 90 percent of executives say L&D programs would help close the skills gap.

It’s sometimes even the only way to get the workforce talent a company needs, says Gary Burtless, a Brookings senior fellow. “If the skill needed by the employer is highly specialized, there may be no other practical way to obtain a worker who possesses the needed skill,” he writes. “It makes no sense for unemployed workers to invest in specialized expertise that has no practical value except at one firm.”

The need for soft skills

But in building new L&D efforts, be sure to focus not just on hard skills but on soft skills as well, experts say.

“For all the traditional talk about a skills gap in technical skills, 44 percent of respondents cited soft skills, such as communication, critical thinking, creativity, and collaboration, as the area with the largest gap,” Adecco found.

Keeping this in mind is essential for increasing talent mobility as well. Rather than hiring someone from the outside who may happen to have the right hard skills listed on a resume, companies should find people internally “who are already known to be productive workers with good soft skills,” and give them training to learn what the company needs, Fuller says. “An employer who can upskill escapes some of the more problematic forces playing out now in the labor market,” Fuller says.

People who are brought up the ranks through internal mobility are less expensive, more likely to succeed and more likely to stay at the company, research has found. Financially, it’s a no-brainer, Fuller adds. “The economics of internal training and skills development are significantly better than many of the alternatives.”

Long way to go

There is some good news on the horizon, says Jason Guggisberg, a vice president with Adecco.

“I think in all sectors, we’re really seeing companies step to the front and offer that training, not just for the good of the company but also as a way to attract talent,” Guggisberg tells Pathgather.

But as for the skills gap reported by employers, “I don’t think it’s closing,” Guggisberg says. “More companies need to latch onto this training and learning model — or else it’s going to continue to get worse.”

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