By David Capranos and Andrew J. Magda, published by Wiley University Services, January 2023
Why It Matters
An awareness of employee skills needed by any organization, along with a keen understanding of strategies to reduce any gaps in worker skills, are mandatory for an organization’s overall success.
Abstract
Wiley University Services surveyed 600 HR professionals and hiring managers from a variety of industries, company sizes and seniority positions for this report that explored four key areas: 1) How the skills gap impacts organizations, 2) Emerging hiring and retention trends, 3) Strategies for upskilling and reskilling workers, 4) Whether education benefits help close skills gaps.
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A Widening Skills Gap
In 2022, 69% of HR professional believed that their companies had a skills gap, an increase from 55% in 2021. Lack of employee development initiatives, resources for training, and support or awareness concerning skill disparities were identified as the largest causes for the skills gap. Non-competitive compensation, inability to adapt to technological change, and shifts in company strategies and product offerings were also noted as generators of a skills gap. In addition, the pandemic changed how people work and “triggered a seesaw effect for the soft and hard skills companies need to compete. While demand for soft skills rose for 48% of organizations, 33% now need fewer hard skills.”
Skills with the Highest Demand
The report authors listed the most in-demand hard skills as strategic thinking and analytics, digital communication, and project management. The most in-demand soft skills were identified as problem-solving, time management, change adaptability, and leadership.
The shelf life of both hard and soft skills varies from two years or less to five years or more. Employers were advised to continuously monitor the level of skills their current workers possess. “A diverse approach will work best — be sure to maintain ready-to-deploy options for upskilling, reskilling, hiring, and outsourcing.” Universities were advised to “connect with local employers to identify their skills gap.”
Recruitment and Retention Issues
Jobs in HR were hardest to fill and retain, along with technology, management, customer service, and sales jobs. Entry-level, manager, and mid-level manager jobs are hardest to retain. The so-called “Great Resignation” significantly impacted organizations as many workers continue to search for better jobs. Pew Research noted that in 2021 more than 50% of those who resigned found jobs with higher salaries, better work-life balance, and more flexibility. These days, it typically takes longer to find talented people to hire as the Great Resignation lingers.
Nonetheless, college graduates are of course seeking work, and those with less than three years of experience are prepared for open positions. At the same time, experience matters when onboarding new job candidates. “Experienced professionals learn their roles faster. Only 38% feel college graduates with less than three years of experience get up to speed within 60 days. By contrast, 51% assume candidates with more than three years of experience will get up to speed during that timeframe.” Forty-six percent of survey respondents did not believe that work-from home jobs attract smore skilled professionals, and another 46% did not believe that work-at-home jobs lead to surges in unqualified worker candidates.
Employers were advised to reevaluate their views about remote work as well as determine what their workers must do on-site. Universities were advised to produce short-term credentials that meet employers’ immediate skill needs.
Learning & Development
Online learning courses and programs, such as those offered by LinkedIn Learning, were viewed as the top format for learning and development. Other methods to boost learning and development include supporting company-sponsored scholarships, mentoring programs, tuition reimbursements, university tuition discounts, and debt-free degrees. The IRS allows employers to provide $5,250 in non-taxable tuition reimbursements, and 18% of employers went above that amount in 2022, down from 24% in 2021.
During the pandemic one-third of employers (mostly companies with less than 2,500 employees) reduced educational benefits. However, “it’s possible many companies have restored these benefits, a welcome reversal for employees interested in using them.”
Employers were advised to offer employees a broad range of educational opportunities that meet their diverse learning needs and preferences and align them to their organization’s goals. Managers were advised to discuss employee skill needs during performance reviews. Universities were advised to understand tuition reimbursement rates of employers in their regions and map out how workers can progress in their programs while also developing accelerated courses, reduced credit requirements, and lower tuition options.
Reassessing Credentials
Fifty-one percent of HR professionals focus on industry certifications to identify a job seeker’s employability. College degrees are preferred in technology and healthcare industries, and manufacturers and retailers validate skills using non-degree credentials. “During the last three years, more employers have become open to interviewing candidates with specific experience or credentials instead of a college degree.” However, earning a college degree is still a very legitimate tool for career advancement. According to the survey, “81% of HR professionals believe having a bachelor’s degree enables candidates to access better jobs. At the same time, 74% feel acquiring a bachelor’s degree helps people achieve their career goals – and 81% credit graduating from college for enabling them to achieve their own.”
About 50% of employers partner with colleges and other organizations to adapt their upskilling and reskilling curricula in order to meet the needs of their workforce. Twenty-five percent formed such partnerships within the last three years. Twenty-five percent of employers have not partnered with any third-party education providers, and another 25% have never partnered with any third-party providers.
Employers were advised to understand the true value of alternative credentialing outside of four-year degrees and make sure that job seekers with certificates, badges, or work experience have the necessary skills that fit the jobs they apply for and whether or not additional training will be needed. In a repetitive refrain noted throughout the Wiley report, universities were advised to offer accelerated learning options that can helps students gain job qualifications. “Otherwise, third-party providers could see an opening for satisfying a market untapped by higher education.”