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The Skills Gap Is Costing Businesses Dearly

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seb_ra / Getty Images
  • Most companies spend more than $800,000 annually looking for qualified employees. The current skills gap limits hiring pools for recruiters.
  • STEM industries have experienced the most significant skills gap among workers. Lack of education and training in technology disciplines have caused the gap.
  • Onsite and offsite training are two strategies used to fix the skills gap. Scholarships and paid internships could also entice students to the field.

Employers are having trouble finding qualified candidates to fill open positions – and this can cost businesses thousands of dollars a year.

According to a 2017 CareerBuilder survey, HR managers say the average cost they experience for having long job vacancies is more than $800,000 a year. Find out what career experts have to say about the skills gap and the industries that are struggling the most.

Sometimes it's impossible to find a job candidate that checks all your boxes. "The skills gap is a term that describes the gaping hole between the requirements of a job and what job candidates possess in terms of professional backgrounds and expertise," said Jason Lovelace, president of talent acquisition solutions at CareerBuilder.

As the job market moves to tech, employers are having a harder time finding applicants with the background experience needed to meet the needs of changing job roles.

"Employers are left with openings that are taking longer to fill than ever before," said Lovelace. "In fact, we found that nearly 60% of U.S. employers have job openings that remain open for 12 weeks or longer."

Vicki Salemi, a career expert for job search platform Monster, said the skills gap is similar to the labor shortage and occurs when employers struggle to find qualified candidates.

The skills gap is preventing national businesses from competing on a global market. Research has pointed to different factors that could be attributing to the skills gap. The most notable cause of the skills gap is linked to the U.S. education system.

According to Training Magazine, almost a quarter of the college degrees earned in the United States are in the disciplines of performing arts, psychology and history. The problem is that none of these professions are in high demand. Only 5% of college degrees granted in the U.S. are in the fields of engineering and technology – despite the need for more qualified individuals in these positions.

Another cause linked to the skills gap is a smaller worker pool. Post-boomer generations are smaller. In addition, companies have not changed their infrastructures to accommodate the new generation of workers. As an example, benefits packages may not include enough family leave time or child care options.

While many industries and employers are having trouble filling positions, some industries are struggling more than others, such as the tech sector. According to CareerBuilder, here are the 10 positions employers are having the most difficulty filling:

  • Internists
  • Heavy and tractor-trailer truck drivers
  • Marketing managers
  • Information security analysts
  • Web developers
  • Industrial engineers
  • Demonstrators and product promoters
  • Sales managers
  • Human resources managers
  • Financial managers

"As we look at the positions employers are having difficulty filling, we've seen that the skills gap is most heavily impacting recruiting across STEM roles and corporate jobs that require technical skills and familiarity with programs," Lovelace said.

According to the CareerBuilder survey, 2 out of 3 employers are concerned about the skills gap, and more than half of employers say they've seen it negatively impact their business. Here are the areas where employers say the skills gap is hurting their company:

  • Productivity loss: 45%
  • Higher employee turnover: 40%
  • Lower morale: 39%
  • Lower-quality work: 37%
  • Inability to grow business: 29%
  • Revenue loss: 26%

"As we look ahead to the next five years, we're seeing that more jobs across all industries – not just STEM – are requiring tech in their daily tasks," said Lovelace. "As this trend continues to grow, candidates will need to continue their education and upskilling to meet the requirements of the changing workforce."

While candidates should always strive to gain more education and skills, employers should offer training to employees to combat this problem.

Salemi relayed what a former corporate recruiter and hiring manager told her: "If a candidate seemed like a great [addition to] the team – hard worker, strong ethics, excellent interpersonal skills, expressed enthusiasm for the role – the [company] would often hire the candidate and provide technical training, as it is more challenging to find [a candidate with the right] technical and tech soft skills."  

Companies are able to fix the skills gap within their own organizations. For starters, more training opportunities onsite and offsite teach hard and soft skills. Organizations can also sponsor educational opportunities through colleges. Scholarships and paid internships may entice more workers to enter the STEM field.

Recruiters may also consider hiring from untapped pools of workers. For instance, lifting any type of hiring restrictions on criminal backgrounds and work visas may have benefits for a company. Over 66% of hiring managers rate the work of those with criminal backgrounds the same or better as those without that background.

Assessing your own skills gap is simple. The easiest strategy is to look at job openings in your field and note any skills requested that are outside your area of expertise. As an example, if employers are looking for SAP experience, then you may want to consider training programs to advance your career. Moreover, performance reviews are useful tools to measure any skills gap in your current position.

Business News Daily Editor

Business News Daily was founded in 2010 as a resource for small business owners at all stages of their entrepreneurial journey. Our site is focused exclusively on giving small business advice, tutorials and insider insights. Business News Daily is owned by Business.com.