The Cure Is in the Disease

Photo by Modestas Urbonas on Unsplash

Welcome back to our Workforce Evolved series! In our inaugural post, we explored the concept of untapped potential in the workforce. Today, we dive deeper into one of the key elements of unlocking that potential: identifying skill gaps. Understanding and addressing these gaps can significantly impact organizational success, from boosting productivity to fostering innovation.

Skills Gap Defined

Simply put, a skill gap describes the gulf between the skills an organization needs to thrive and the skills its employees actually possess. Skill gaps can be technical, like not having enough coding expertise in your tech team, or they can be softer skills, like communication or leadership.

While tech and AI tools are racing into the future at breakneck speed, humans in the modern workplace still need to acquire digital skills the old fashioned way—through deliberate and thoughtful study, practice, and use of feedback. This means the skill gap is getting wider, and fast.

The nonprofit research org RAND published in 2021 its findings from a report that sought to characterize specifically the digital skills gap:

While the demand for digital skills is high, supply is low. Workforces do not always have the skills needed to manage digital transformation, and businesses often struggle to find talent for digital roles. This digital skills ‘gap’ has become even more apparent during the COVID-19 pandemic. As digitalisation sped up to move many jobs online, the need for digital skills increased.

Note that this was published 2 years before the release of ChatGPT and innumerable other generative AI tools … which we can presume have only exacerbated these effects.

A recent workforce trend report by Randstad found that 72% of the corporate leaders surveyed around the world believe that skill gaps will negatively impact their operations in 2024 (an 8% increase from last year!).

Stela Lupushor, CEO & Founder of Reframe.Work Inc., explains the full scope of this problem:

“Skill gaps may seem primarily like a talent management or Learning & Development (L&D) problem, but underskilled teams have the potential to cause irreparable damage to company-wide morale and profit. This is also a significant business problem. If you don’t have skilled workers they can’t deliver on the company’s promise, customers’ expectations, and/or the financial outcomes of your organization. Skills, or lack thereof, is a business imperative, especially in a services dominant economy, and addressing them is a must for today’s executive leadership.”

What It Means for Businesses

Consider this anecdote from a former colleague of mine. As the top performer on her team of software engineers, she was expected by management to “mentor” her less-skilled teammates. Eventually, a significant portion of her time was spent helping to train her teammates, and on top of that, her effort was never officially recognized or appreciated by management. She grew frustrated, her output decreased, and she quickly jumped ship. In this case, a skill gap throttled the team’s top performer.

Skill gaps impact everyone. Here’s a few examples:

Starting with the obvious: reduced productivity. When employees lack the necessary skills to perform their jobs efficiently, productivity suffers. This can lead to missed deadlines, lower output quality, and increased costs.

Next is a lack of innovation: Without the right skills, teams will struggle to think creatively and develop innovative solutions that move the ball down the field. This stagnation can prevent a company from staying competitive in a rapidly changing market.

Circling back to my anecdote above: employees are often aware of their skill deficiencies. Without proper support and training, they can become disengaged, leading to higher turnover rates. On the flip side, retaining top talent becomes a challenge when the bulk of training work to help address the gaps on their team falls on them.

Given the obvious importance of training, it’s no surprise that a significant portion of a company’s budget goes to training (16% on average according to Harvard Business Review). But given this investment, it is surprising that only 22% of companies actually monitor the usage and progress of that training.

It Pays to Be Vigilant

Here are a few good reasons why companies should focus heavily on identifying skill gaps early and often:

Strategic Workforce Planning: By understanding their skill gaps, organizations can make informed decisions about hiring, training, development, and internal mobility. This enables strategic planning for future needs, ensuring the right talent is in place to meet long-term goals. Such a proactive approach helps companies stay ahead of industry trends and technological advancements.

Enhanced Team Dynamics: Recognizing where skill gaps exist can improve team formation and management. Organizations can create more balanced teams where strengths complement weaknesses, leading to better collaboration, higher team morale, and a stronger, more cohesive work environment.

Increased Agility and Adaptability: Addressing skill gaps makes organizations more adaptable to change. Employees become better equipped to handle new challenges, learn new technologies, and pivot when necessary. This agility is crucial in a rapidly changing business landscape.

Cultivating a Learning Culture: Identifying skill gaps highlights the importance of continuous learning and development. This fosters a culture that encourages employees to upskill and reskill, promoting lifelong learning. Such a culture enhances individual growth and drives collective organizational success.

Competitive Advantage: A skilled and versatile workforce provides a significant competitive edge. Companies can innovate faster, respond to market changes more effectively, and deliver higher quality products and services. This advantage positions a company as a leader in its industry.

Data-Driven Decision Making: Addressing skill gaps involves collecting and analyzing data on employee performance and development. This data-driven approach provides insights into what’s working and what’s not, allowing organizations to continuously refine their L&D strategies. It ensures that training investments yield measurable returns.

AI Can Help

Does an ominous and amorphous skill gap loom over your organization’s immediate future? Fear not. Although AI tools may be partly to blame for this rapid acceleration of workforce skill gaps, they should also play a huge role in bridging them. Some companies are already using AI to help identify and address skill gaps, Randstad reports.

I asked Guy Wallace, who has been designing training experiences for enterprise companies since 1979 (and is now retired but still authoring books, including his latest, “A Focus on Performance Based Instruction in Enterprise L&D”) about the potential for AI to help solve skill gaps.

“AI will, at some future point, have the ability to conduct the analysis, design, and generation of training content versus educational content, with a very narrow focus on the specific outputs and the behavioral and cognitive tasks of performance and the enabling knowledge and skills required, ensuring the essential while eliminating any extraneous content and minimizing cognitive load. Until then, AI Systems will need to be fed the performance and knowledge/skills specifics by performance experts, followed by alpha, beta, and pilot testing before release.”

As Wallace mentions, AI has the potential to revolutionize the way we identify and address skill gaps. AI systems can analyze vast amounts of data to pinpoint specific skill deficiencies and suggest targeted training programs. However, this technology is still in development, and performance experts play a crucial role in providing the necessary input to train AI systems effectively. Specifically, experts must provide the context and scenarios to define how to successfully demonstrate a skill/competency within a company, in a role, and as an individual.

Moving Forward

In our next post, we’ll explore how these AI tools work, from broad screening to targeted diagnostics, and see how they can significantly impact individual career paths using real-world examples. We’ll dive deep into the specific methodologies we use at Zal.ai to ensure our Smart Assessments are effective and aligned with organizational goals.

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