28 Jan Why is there a Skills Gap in the Labor Force?
For years, economic experts in the United States have discussed the reasoning for a skills gap in the labor force in the country. The advances in technology like artificial intelligence and automation have changed the nature of how work is done. These advances have created a skills gap in which companies are struggling to hire workers that are trained correctly and lack certain skills in order to perform certain jobs the way they are needed. In fact, American senior executives believe that about 44% of Americans lack soft skills like communication, creativity, critical thinking, and collaboration. Executives also believe that workers lack technical skills, software skills, and leadership skills. In this article, we’ll explain what exactly the skills gap in the American labor force is and why it has become such a big factor for employers, as well as the potential impact it has on the economy now and in the future.
What is a skills gap?
By definition, a skills gap is a fundamental mismatch between the skills that employers rely on in their employees and the skills that job seekers possess. This mismatch makes it incredibly difficult for individuals to find jobs and for employers to find workers that have the appropriate training. Leadership for these companies is a key part of addressing the skills gap issue.
What causes a skills gap?
Several factors can contribute to a skills gap. One of the main reasons for a skills gap in a job market is an increase in the number of people entering the workforce each year. Other reasons that can contribute to the gap are lack of education and the lack of basic soft skills. These soft skills include writing, speaking, organization, and the other skills we previously mentioned. Another reason that contributes to a skills gap is the rise in technology.
Technology has advanced so much over the last few decades that many industries have been forced to change the way they do business. As a result, businesses need workers with new skills that help them keep up with the advancements and do the job as needed without additional training or education.
Why does the United States economy have a skills gap?
For the United States, the skills gap in the economy is certainly caused by the above factors. The lack or underinvestment of certain educational programs, lack of soft skills, and lack of training. However, some economists point to wages being part of the bigger issue. One way for employers to fill the jobs with qualified and skilled workers is by offering a compelling reason to take the position. This means offering better wages or better benefits.
Another way they could fill these jobs with qualified workers is by having corporate apprenticeship or a training program. However, most businesses don’t implement these programs for a number of reasons. Executives believe that it could be that there’s a lack of interest from employees or that it’s because the cost of development of these programs is too high.
Some believe there isn’t a skills gap
One article, written by Brookings, states that the American workforce doesn’t have a skills gap, but rather an opportunity gap. This piece explains that employers were using the COVID-19 economic shock to say that “low-income and displaced workers lack the skills and motivation” contributed to a skills gap. The piece also explains that it’s time to get rid of the skills gap narrative – a narrative that “treats labor markets as transactional and assumes hiring processes are objective” to how they find candidates and see the value in them.
They believe that focusing on skills can limit career options and that the focus should be on closing the opportunity gap. For example, jobs in the tech industry offer high salaries and can be a great long-term career choice, especially as there are advancements in technology. The United States has underinvested in curriculum for K-12 age groups to build the critical thinking and problem-solving skills, along with the digital skills to be able to supplement the workforce. As a result, tech companies are having to recruit on a national and global scale to find talent or poach their talent from other institutions.
How can we fix the skills or opportunity gap?
While there are certainly some seemingly “easy” fixes to the skills gap or the opportunity gap, bridging this gap will require more than just one solution. The first step is to recognize that the skills gap exists and then identify what causes it. If there are plenty of qualified candidates available to fill jobs, but they aren’t applying for the job or taking a position at another company, employers must look at themselves and offer more incentives for those workers to want to work for them. Higher wages and better benefits can make the position more attractive. Once that happens, they must look at the ways to retain these employees.
This means more internal training for workers to grow and learn new skills. High school and college curriculum are not teaching all the necessary skills for certain occupations, which has helped create this trend of skill gaps. It is now up to the employers to invest more into their employees to make up for the skills shortage and make their existing employees more valuable in this modern economy.
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