The Corporate Skills Crisis


We have all felt the effects of inflation- an oscillating stock market and heightened interest rates- and have eagerly watched to see the response from the Federal Reserve. To halt or reverse this trend of increasing rates, the Fed seeks indications of economic slowdown  via the job market. What I find most interesting is that I think I may know something that economists may not be paying attention to, or may be overlooking, that explains why we can have inflation but a strong outlook for jobs simultaneously. The demand for skilled workers across many sectors continues to increase, but without qualified applicants to fill positions, the demand for skilled workers will persist, and we will continue to experience the economic results. Perhaps the secret to solving this job-related economic phenomenon lives with trainers and designers of learning experiences….perhaps shifting towards skill-based hiring can unlock the counterbalance we need for sustained growth.


Some have called into question whether a skills gap really exists. Ryan Craig, the current Managing Director at Achieve Partners, has written extensively on this topic for several years and points out in his piece, “America’s Skills Gap: Why  It’s Real and Why It Matters”, “At the start of 2019, 7 million U.S. jobs remained unfilled, and American employers consistently cite trouble finding qualified workers…….These gaps are moreover made worse by a higher education system that ill-equips graduates for the workforce.” He continues to point out that these numbers are not indicators of unfilled low skills jobs. Referring to Lightcast data, he mentions higher skilled workers are among the most undersupplied roles. He attributes this to two main causes:

  1. Digital Skills Gap

  2. Soft Skills Gap

The Digital Skills Gap

They are failing to find enough candidates with the requisite digital skills (1)

The rapidly increasing reliance on digital skills in the global economy is not new. This problem has been brewing for over two decades and continues to accelerate.  From 2002 to 2016, the rate of increased demand for digital skills for 545 occupations was tracked in this interactive chart (2) published on The Brookings Institute. In the last 6 years, this trend has only accelerated and Covid has certainly pushed things to a point of no return.


Digital Skills Levels and Change in digital skills for 545 occupationsSource: The Brookings Institute: Digitilzation and the American Workforce


Soft Skills Gap

They are dissatisfied with the “soft skills” presented by candidates, even those with digital skills. (3)

According to Craig, the key drivers of this persistent skills gap are twofold. Highlighted in “Education Friction” and “Hiring Friction”, Craig explains how higher education has failed to remain relevant to the job market, and there is an overall sense that the investment will not bring about the ROI toward career pathways that justify the expense. 

Craig says, “Education Friction means that because of the time, the cost and – most important – the uncertainty of a positive employment outcome, many individuals fail to upskill themselves. If we could eliminate Education Friction, millions of candidates would immediately equip themselves with the digital skills, industry and business process knowledge, and soft skills that employers are seeking.” On the flip side, employers refuse to hire anyone who can not prove they are already skilled to do the job – “Hiring Friction.” Many candidates who portray good communication skills, are punctual, and otherwise very employable lack the digital skills and many with the digital skills lack the soft skills. HR departments lack the ability to properly articulate what it is they need and many training departments lack the ability to reconstruct training to upskill, reskill, onboard and retain qualified candidates. Large companies like PwC and Deloitte are proactively marketing their solutions in response to this serious issue for talent pipelines.

Bridging The Gap

In “Digital upskilling at scale: Aligning skills and culture with the changing nature of work,” PwC explains that hard digital skills alone are not the issue to fill value talent pipeline needs. “Organizations should teach “soft” skills and related concepts—in addition to digital skills—through workshops or scenario-based learning modules.” Skills PwC has cited as vital for organizations (4) are:

  • Design thinking 

  • Service design

  • Change management 

  • Agile project management 

  • Leadership development and team management 

  • Empathy, ethics and inclusion

In a 2019 PwC conducted survey, 74% of CEO respondents reported that their inability to find talent with the right skills was a concern for their organization. When asked a year later, only 18% indicated they had made “significant progress” closing the skills gap, which was identified to be a mix of soft and digital skills. (5)

In December 2022, Deloitte announced that they would be investing $1.4B to reshape the future of learning and development to proactively identify the skills of the future and also include soft skills and elements of employee well being (6).

PWC also notes that investing in employees is the best way to reach skills levels for a thriving organization. (7) The top 10 organizational capabilities they say companies should be developing but aren’t, are listed below:

  1. Using big data and advanced analytics in workforce decision making

  2. Using data to monitor the skills gap in the workforce

  3. Using data analytics to eliminate bias from hiring and rewards

  4. Ensuring HR professionals are trained to use analytics for workforce decision making, predicting and monitoring the skills gap, and eliminating bias from hiring and rewards (capabilities 1–3)

  5. Developing policies and practices to encourage flexible working

  6. Managing workloads to ensure employees don’t burn out and do take vacations

  7. Using predictive analytics for all of the above

  8. Developing career path models that mirror how people work today, not simply up-or-out paths

  9. Creating work paths that nurture adaptability and agility by promoting rotations and skills development

  10. Designing work spaces that promote well-being and accommodate a variety of working styles

Our government’s response to inflation and triggers related to the job market seem to me an oversimplification and lack of response to what has been brewing for decades. The pace that we have accelerated digitalization, while failing to bring our education and training solutions up to speed, is a direct contributor to the economic signs that are playing out today. Stabilizing our economy through strengthening corporate talent pipelines is dependent on a pedagogical shift- one with a greater focus on skills, and how to build and measure them. Companies should proactively do the following:

  • Identify the skills that are vital to the organization – hard and soft skills

  • Drive outcomes focused/skills focused training solutions

  • Drive change using data and skills profiles for the organization

  • Create a culture of continuous improvement

If you’d like to learn more, please join a webinar hosted by MoodleUS on April 11th at 2 pm ET
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(1) America’s Skills Gap: Why It’s Real, and Why it Matters, Progressive Policy Institute, March 2019
(2) Digitalization and the American workforce, The Brookings Institute, November 2017
(3) America’s Skills Gap: Why It’s Real, and Why it Matters, Progressive Policy Institute, March 2019
(4) Digital ups killing at scale: Aligning skills and culture with the changing nature of work, PwC
(5) Upskilling: Building confidence in an uncertain world, PwC, Talent Trends 2020
(6) Deloitte Looks to Reshape the Future of Learning and Development, Cision PR Newswire, December 14, 2022
(7) Good Work, Strategy + Business, a PwC publication, February 18, 2019

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