There are over a million more jobs available in the U.S. than workers to fill them. Here’s how small businesses can fill the widening skills gap.
If you think the skills gap isn’t improving, you’re in good company. The “Closing the Skills Gap 2019 Research Report” by Wiley Education Services and Future Workplace reveals a 12% increase in the number of HR professionals reporting a skills gap. In 2018, 52% of companies were feeling the pinch; this year, that number jumped to 64%.
If finding candidates isn’t enough of a problem, unemployment rates continue to plummet, some reaching all-time lows. It’s estimated there are almost 1.5 million more jobs available in the United States than workers to fill them.
Employers large and small are struggling to meet production levels and consumer demand in such a tight skills and talent market.
Many are doing the best they can with the talent they have, while some are working hard to upskill talent for current and future needs. Others are thinking outside the box when it comes to getting work done.
How the skills gap is challenging business
The report reveals that although 68% of organizations consider a 4-year degree validates qualifications, 90% say they’d hire a candidate without one.
There has also been an increase in businesses working with educators to get the skills they need. 64% of employers have collaborated with schools to boost curriculum that aligns better with their needs: an increase of 14% over the past year.
Jeremy Auger, chief strategy officer at the learning management platform D2L, believes the skills gap is global. He sees it as global particularly in emerging fields like data science, AI/machine learning, and blockchain.
Today’s highly creative and innovative workers want continuous learning: they know their careers depend on it.
“I expect that the gap will get wider as tasks and skills are increasingly being automated — and as technology drives lightning-fast shifts in the technical skill sets necessary to keep pace,” Auger says.
He suggests it’s a well-known phenomenon — though education systems are struggling to keep pace.
“Less well-known is the demand for durable skills like entrepreneurship, communications, and leadership skills,” Auger adds. “This is a growing gap area and it’s not being addressed by education systems to the same degree as they are tackling technical and professional skills.”
Technology game changer
HR leaders reveal one of the biggest barriers to meeting headcount is the fast pace of technology change. A total of 37% of the report’s survey respondents feel continuously evolving technology poses a challenge to hiring managers looking for talent.
Auger suggests, “There’s a tendency among some seasoned leaders to say, ‘yeah, we’ve seen this before in a previous tech boom. All we need to do is keep ahead of the curve and we’ll be okay.’”
But Auger believes the changes aren’t like the booms of the 80s, 90s, or early 2000s.
“This isn’t a wave or a boom — it’s an exponentially growing tsunami of change — and failing to prepare workers isn’t just bad for businesses,” Auger says. “Ultimately, it’s bad for our economy and competitiveness.”
How can small business compete in such a tight market?
No matter your size, it’s incumbent to build a learning culture, says Auger. Today’s highly creative and innovative workers want continuous learning: they know their careers depend on it.
“If you don’t provide a learning culture, those cutting-edge skill sets may not be available to you because you will be unable to attract new talent or build those skill sets in your existing teams,” Auger says.
Eddie Lou, executive chairman and co-founder of Shiftgig, a tech solution that connects workers with available shifts in their area, says small businesses can compete for talent by showing employees a professional and personal career path.
“At a smaller business, employees have an opportunity to take on more responsibility, learn new skills, expand their roles — all of which can make a real difference at the company and also allow talent to gain critical skills and experience for their future,” Lou says.
Gig workers fill the gaps
Survey respondents admit they’re turning to the gig economy to fill their needs. Almost half, 47%, say their preference is to hire contingent workers rather than full-time employees. A close second, 46%, say they outsource work to vendors rather than upskilling current employees.
Gig workers are attractive to businesses because:
- They fill needs as businesses look to hire more workers
- They are fitting for project work
- They can be a cost-effective alternative to a full-time employee with benefits
The gig economy is growing: from entry-level workers to the highest level professional. Many of these workers prefer the flexibility contingent work offers; others are looking to boost their skill set by trying as many types of work as possible.
Auger knows the gig economy is providing skills-for-sale.
“Where you don’t need institutional-memory or competitive-differentiating in-house expertise, gig workers can provide the skills you need,” he says. “That’s why all the U.S. job growth in the last 10 years was in the gig economy.”
However if institutional continuity and knowledge are required, gig workers don’t fit the bill, according to Aguer.
Lou adds that contingent workers such as freelancers, gig workers, and independent contractors are filling in some of the skills gap in today’s workforce.
“Leveraging staffing companies or gig platforms allows companies to find new talent pools — those that provide specialized skills for short-term projects or those that tap into a part-time labor pool that isn’t seeking full-time work,” Lou says.
For business owners and HR professionals, gig workers can provide a respite from recruitment.
Hiring managers typically source gig workers for immediate hire, through a service or agency, eliminating the need for items and actions such as:
- Background checks
If a gig worker isn’t a good fit, employers are free to release them and find another — no exit interviews or COBRA notifications required.
The skills gap appears to have no end in sight, and technology may exacerbate as much as alleviate it. Small to medium-sized businesses can work around skills shortages with a bit of creative thinking and a look at the wider variety of resources available.