Impact Stories
May 27, 2022 – Education

Forget skills gaps: The true problem is skills craters

Forget skills gaps: The true problem is skills craters

By Alexander Alonso and Kerri Nelson

Forty-two percent of organizational C-suite leaders identify sourcing talent as the primary challenge facing them. This number is not surprising given the amalgam of high turnover in 2021 and significant retirement rates since 2011. Our economy is experiencing a labor shortage unlike any other in history. The two largest generations, Baby Boomers and Millennials, are less likely to participate in the labor force than others like Gen X. Therefore, nearly 59 percent of CEOs have a renewed focus on talent retention and upskilling. Moreover, 58 percent of CEOs are calling for an emphasis on new talent pools in recruiting with a desire to source candidates who have taken alternate learning pathways. 

These numbers all speak to one problem: We need talent, and now.  

Nothing made this clearer than a recent conversation we had with Albert Chow, the chairman of the upskilling platform Opti.Education. Chow expressed a dynamic view of the talent shortages taking place across his enterprises and various industries. Specifically, he talked about the need to shorten the service cycle from talent creation to talent delivery. Chow used the following example: imagine a world where someone can earn the skills needed, demonstrate the proficiency needed, and find work at the same level as those trained using a traditional educational model. Now imagine that happening in the span of weeks rather than months or years. Wouldn’t a consumer prefer this model?  

Naturally, my response as an employer was yes, and I’m not sure anyone would disagree that high-quality talent should be available faster. Recent Society for Human Resource Management (SHRM) research indicates 92 percent of executives hold positive attitudes toward talent skilling up through alternate learning paths.

With nearly universal positivity toward alternate learning pathways, why have we not yet recognized the full return with more talent? A little bit of extra digging makes one thing abundantly clear: talent creation is only half the problem. Creating talent through identification of untapped talent pools will help us mitigate the gap. Being craftier about talent pools and creating new pools with upskilling will bring both sides of the skills gap — the employer needs and the employee skills — marginally closer. But there’s also an inherent assumption that a skills gap means needs and skills are aligned, and that needs are somewhat unchanging. 

Nothing could be further from the truth. Our skills gap problem is actually a skills crater problem. Employers are experiencing a lack of talent related to skills not matching their job needs, yes. But employers are also experiencing another force: the deepening of skills needed. 

Skills needs today are not nearly the same as they were even five or six years ago in large part due to the increasing complexity of business problems. Take the world of analytics. Twenty years ago an organization needed analysts capable of cleaning massive datasets. Five years ago, they needed people capable of engaging in systems analytics through programming. Today, they need data scientists, but those individuals need a combination of skills from yesteryear plus analytical aptitudes focused on external data scraping and automation. In the span of a quarter century, the analytics field has gone from engaging in big data setup to programming automated algorithms for multi-system outcomes. To the layperson this evolution may not seem like much of a difference. To the subject matter expert, it’s like jumping from the skills needed to conquer Super Mario Brothers to Halo in the span of six weeks.   

A skills crater represents the widening of the gap between employer needs and the skills held by potential employees plus the constant deepening of the complex challenges requiring those skills. With each moment, we are seeing a continued widening of the gap. With each second, we are seeing a deepening of the complex problems organizations face. These forces mean there is a premium on talent creation as a consistent strategy.   

Organizations with a talent creation strategy do three things that drive competitive advantage:

  • They leverage talent sourcing tools focused on skills rather than job descriptions;
  • They incentivize recruiters for opening the aperture as widely as possible to attract untapped talent pools; and 
  • They have a targeted approach to identifying people with alternate learning pathways even if it means creating those pathways themselves. 

Eighty-six percent of business leaders agree that people who develop their skills using alternate pathways bring value to their organizations. When we look at the skills cratering imperative ahead, it’s critical we respond quickly to generate return on workforce investment. Practically speaking, though, we must remember the words of the great CEO whisperer Ram Charan who said, “The only thing more likely to kill an organization’s ability to meet end-user needs than disruption is dysfunction … dysfunction in the talent needed to succeed.” 

If we’re all looking to fight disruption, it starts with staving off dysfunction, and there is no better way than filling the crater. 

Alonso is the Society for Human Resource Management’s (SHRM) Chief Knowledge Officer. He leads operations for SHRM’s Certified Professional and Senior Certified Professional certifications, research functions, and the SHRM Knowledge Advisor service. Nelson is director of policy and partnership research at SHRM. She is responsible for leading, developing, and designing strategic workplace and workforce research.

This viewpoint is part of an ongoing series, Driving Transformation. In this series, we amplify the voices of a diverse group of scholars, nonprofit leaders, and advocates who offer unique perspectives on the intersection of work and learning.