In the past decade, employment experts in the US have noted the widening gap between the current skills of workers and the skills that will be needed in the future. This has become widely known as the skills gap, and is a problem that all kinds of organizations are seeing across the globe. This is especially a concern when you consider that there still is high unemployment in many parts of the US and the world, after the recent recession.

Two reports from the National Institute of Standards and Technology (NIST) and the  Mckinsey Center for Government recently highlighted this problem, highlighting these key aspects of the skills gap:

What the Skills Gap Is

The skills gap was defined in the above reports as a major gap between the current capabilities of an organization and the skills needed to achieve upcoming goals. The report notes that 84% of respondents to a recent industry survey stated that there was a serious skills gap in their company. And five percent noted that there was a gap between 2009 and 2012.

The skills gap is occurring when there are 75 million people who are unemployed, according to the International Labour Organization. Even with many youth in the world unemployed, many good-paying jobs still go unfilled because of the skills gap.

The McKinsey report found that there is a shortage of workers in the high skilled fields numbering about 40 million. For middle skilled workers, the shortage is 45 million, and for low skilled workers, it is 90 million.

Mckinsey-Report

Where the Largest Skills Gaps Are

The biggest gaps that need to be filled are middle and high skill jobs. These jobs tend to be in manufacturing, construction and healthcare. Many of these jobs are highly specialized in mechanical, technical and production work that may require certification but not a college degree.

Even though there is a shortage of skilled workers in some manufacturing areas, the fact is that the entire employment in that industry has decreased by ⅓ in the last 10 years. Automation, according the a recent Deloitte report Boiling Point?, has changed how many factories work and have changed the types of skills needed for this work.

In the manufacturing industry, 67% of manufacturing executives in the US say that there is at least a moderate shortage of qualified workers.

Other Skills Shortages

In the construction industry, there also is a serious skills shortage being caused by:

  • Retiring workers

  • Recession impact

  • Too small a pipeline of new workers

McGraw Hill Construction has forecast future growth of non-residential construction projects to be 73% by 2015. Also, there will be a rise in green building projects in the next two years. However, green jobs are rather difficult to hire for. According to McGraw-Hill’s recent Construction Industry Workforce Shortages Report, 86% of engineering and architecture firms have agree with the above statement, as did 91% of contractors. Jobs that are particularly hard to hire for are science, technology, engineering and math (STEM) fields.

Biggest Reasons for Skills Gap

A report by the American Society for Training and Development found that many young people and employers – up to 50% – think that new graduates are not well prepared for entry level jobs. Only 72% of education providers thought that was true.

Also, 39% of education providers think that too many students drop out because the program is too difficult. Only 60% of young people thing hands on learning and on the job training will help them to learn the skills they need.

Effects of the Skills Gap

Not having enough of the right skills in the current job market leads to:

  • Slower growth

  • More polarization between higher and lower income workers

  • Slower rise into higher paying jobs

  • Millions of lower skilled workers trapped in low paying work

Clearly, more work needs to be done to properly train workers for jobs that need to be done, but simply lack enough skilled workers.