Learning & Development, Recruiting, Technology

Addressing Emerging Skills Gaps in a Tight Labor Market

While fears of a 2023 recession linger, the American economy continues to hum along, and that includes the tight labor market that has left companies around the country struggling to find enough qualified workers to keep their operations running.

That adjective “qualified” is an important one. It’s not necessarily the case that companies can’t find any workers—it’s that they’re having trouble finding workers with the education, skills, and experience needed to perform the job well.

The challenges the current labor market poses for businesses are exacerbated by the fast-changing global environment of the last several years. Pandemics, the rollercoaster of demand for tech services resulting from the consequent business closures and shift to remote work, armed conflicts disrupting long-standing trade patterns, and scrambled supply chains have all placed significant and ever-changing demands on workers and the skills they and their employers need to succeed.

We sought input from some business, HR, and training professionals to get a better sense of what specific skills gaps they see as the biggest and most important challenges in 2023 related to addressing skills gaps.

Tech Skills

We live in a high-tech world where every year seems to bring stunning advances in science and technology and where people have tremendous faith in technology to solve many of our problems. Some of the most important new technologies continuing to develop today are artificial intelligence (AI) and machine learning (ML), and many employers have had trouble finding staff who are well versed in these technologies.

“Organizations are still grappling with a critical artificial intelligence (AI) and machine learning (ML) skills gaps,” says Mike Loukides, VP of Emerging Tech Content at O’Reilly Media. “According to O’Reilly’s latest AI Adoption in the Enterprise report, 45% of organizations reported that they experienced the most significant skills gap for machine learning modelers, followed closely by data scientists, with 43% of organizations reporting a skills gap. This only stands to become worse as the global artificial intelligence market grows over the next decade.”

Companies’ desire to incorporate ML in their products or in their business processes is outstripping the supply of skilled AI engineers and data scientists, Loukides argues. “This is a shortage that’s been predicted for years, though it really hasn’t become a problem until recently,” he adds. “This is because the speed of technological innovation is growing at an extremely fast rate. As new AI technologies enter the market, old technologies become irrelevant.”

That’s a problem, Loukides says, because the professionals who hold those now outdated skill sets still remain in the job market. “It takes time to learn these skills, and those opportunities for learning these new skills simply don’t exist at the scale they should to keep up with the pace that AI technology is advancing,” he explains.  

Human Skills and the Limitations of Technology

While technology can address a wide variety of business challenges, it certainly can’t solve them all. Even with AI and other technologies like natural language processing (NLP), which allows computers and supporting devices to “converse” with humans, it’s hard to replace the human touch with current technology. In fact, the technical focus sometimes conceals the immense importance of inherently human skills like teamwork, empathy, and others.

“While there is certainly demand for technical skills, the biggest gap is for the ‘human skills’ that go beyond the technical,” says George Westerman, senior lecturer in MIT’s Sloan School of Management and founder of the Global Opportunity Initiative. “Employers tell us that they hire for hard skills but fire for soft skills. As computers get better and better at many tasks, companies need people with critical thinking, creativity, ethics, and the ability to lead others,” he continues. “And it’s these human skills, even more than technical skills, that enable people to advance to higher levels in their careers. At MIT, we developed a framework of the 24 most important human skills, based on discussion with experts and analysis of 42 frameworks.”

Jaclyn Pullen, Senior PR Manager for BLASTmedia, represents global learning company Pearson, which recently released new data on the top “Power Skills” necessary for individuals in today’s job market and the predicted workforce of 2026.

The data she cites backs up both Loukides’s observation of the continued obsolescence of yesterday’s tech skills and especially Westerman’s advocacy for greater human skills.

The data, says Pullen, “showcases how hard skills related to technology have a short shelf-life, but the skills that are prevailing now and into the future are human-based skills or ‘power skills.’”

For reference, Pearson’s top human skills that are currently in high demand are:

  1. Communication
  2. Customer service
  3. Leadership
  4. Collaboration
  5. Problem solving

And the skills it predicts will be in high demand in 2026 are:

  1. Collaboration
  2. Customer focus
  3. Personal learning
  4. Achievement focus
  5. Cultural and social intelligence

Amid this shifting environment, managerial skills gaps also are emerging.

Managerial Skills Gaps

Josh Bersin, global industry analyst and CEO of advisory firm Josh Bersin Company, says, “When we survey actual leadership and management, we see a very strong focus on management skills, employee productivity (making work easier and more effective), and reskilling people for new roles in management, leadership, and digital transformation.”

In terms of general skills, according to Bersin, the priorities are:

  • Managing change
  • Managing time and productivity
  • Leading a team
  • Creating an inclusive, diverse, and strong culture
  • Understanding the business and industry trends in the company

“By far the number one HR issue companies face right now is designing hybrid work and finding a way to re-engage and support employees in a competitive labor market,” Bersin says.

Business experts are pointing to tech skills, human skills, or both as the key gaps they see in their workforces in the new year. While this may seem contradictory to some, the reality is that in an advanced technological world, advanced technology can create huge competitive advances for firms.

At the same time, technology isn’t a silver bullet. A great example of this is the acceleration of the use of telecommunications technologies in the wake of the COVID-19 pandemic. A largely unexpected side effect of this shift has been the deterioration in basic soft skills among workers, many of whom now have significantly less day-to-day human interaction than they did pre-pandemic, when they were going into the office 5 days per week.

As we move further into 2023 and beyond, the organizations that can close the twin skills gaps of tech skills and human skills will be better positioned to succeed in a dynamic global economic environment.

Lin Grensing-Pophal is a Contributing Editor at HR Daily Advisor.

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