Guided product tour
Book a demo

According to research, companies spend more than $800,000 annually looking for skilled employees for job-specific roles. With technology advancing rapidly, it's essential for both current and future generations to adapt to the digital world and gain job-specific skills. 

This is especially true for the US market, which faces a significant skills gap and talent shortage in various fields of technology, such as artificial intelligence, machine learning, data science, and cybersecurity.

The Deloitte report shows that in manufacturing alone, there could be 2.4 million unfilled positions between 2018 and 2028, causing a potential economic impact of $2.5 trillion.

Not, just manufacturing, the scenario is the same for many other industries as well.

In order to maintain competitiveness in today's rapidly evolving market, it's crucial for your employees to possess the right skill set for both productivity and innovation. Explore this blog to discover effective strategies aimed at closing the skills gap and staying ahead.

What is the Skills Gap?

In a broad sense, the skills gap refers to a situation where certain individuals lack the appropriate or required skill or skills needed for the applied job positions.

When we talk from an industry perspective, the "skills gap" refers to the disparity that exists in an organization as a whole due to a lack of trained and skilled employees. This gap makes it hard for organizations to meet the demands of a rapidly changing technological era and reach desired business goals.

Skills gaps can have a severe impact on businesses, leading to higher employee turnover rate, productivity loss, lower quality work, etc. Therefore, it is essential to understand and identify the key reasons for the skills gap and then find the necessary solutions to bridge it.

Why Does the Skills Gap Exist?

There are multiple reasons why the skills gap exists. Some can be not keeping up with technological advancements, inadequate training, and changing industry requirements. 

These deficits mostly happen because the market is always changing, which means that a business has to constantly update itself and upskill and reskill its workers.

Here are 3 major factors that lead to a skills gap in an organization:

Technological Advancements: In every sector, technological shifts are unavoidable. 

A skills gap can emerge if a company doesn't stay updated with upgraded tech changes that enhance efficiency or when new tech arrives, but employees lack proper training to leverage it effectively.

Inability to extract insights from performance outcomes: A robust performance evaluation encompasses more than just appraisals and promotions. Performance results also reveal gaps in employee skills. 

While companies may possess effective performance management systems, they often fall short in connecting these outcomes to employees' skill development needs. This oversight can result in a mismatch between the identified skills gap and the necessary skilling & training efforts, hindering overall workforce improvement and organizational growth.

Inadequate Technology-Driven Training & Skilling Program:  As per a report, 61% of middle market firms do not have the right training and skilling platform in place for internal career advancement and, therefore, are unable to create more robust talent pipelines.

Insufficient technology-driven internal training programs can lead to difficulty in developing talent internally.

Major Industries Impacted by Skills Gap

Industries have evolved, but their workforce hasn't always kept pace. Finding qualified candidates to fill positions is a challenge for many employers.

Here are 10 industries most affected by skill gaps:

Industries affected by skills gap

Why is Skills Gap Analysis Crucial for a Company?

Direct Impact on Productivity and Performance: When employees lack the necessary skills (soft skills, hard skills, role-specific skills) to perform their jobs effectively, it can lead to decreased productivity, lower quality work, and ineffective outcomes. 

Knowledge workers often handle complex tasks that require job-specific critical skills, but a skill gap can hinder their ability to deliver high-quality output. Consider a data analyst in a marketing firm who deals with complex customer data to inform strategies. 

If the analyst lacks advanced statistical and data visualization skills, their ability to provide accurate insights diminishes, leading to subpar marketing decisions. 

Employee Morale and Engagement: Employees who are not trained enough to perform their roles due to skills shortage can experience frustration and reduced job satisfaction. This can lead to lower morale, decreased employee engagement, and a higher likelihood of attrition. 

Employees, in particular, tend to value opportunities for continuous learning and growth. A report by Gartner stated that 58% of employees said that learning new things or having access to challenging work opportunities was a key factor in their motivation and engagement at work.

Reduced global competitiveness: Companies with highly skilled employees can provide strong competition to its competitors across the markets as they can achieve higher levels of performance, innovation, and customer satisfaction by optimizing their processes and output, as well as reducing the costs and risks of errors, delays, and rework. 

How Can Disprz Help in Bridging the Skills Gap at Your Organization?

At times, companies lack a consistent method to address skills gaps. An organized skilling cycle that offers structured solutions is a key component of an effective skills gap analysis.

To bolster organizations in this endeavor, Disprz has introduced the 4-S cycle, meticulously crafted to amplify the efficacy of the upskilling process.

The major steps involved in the 4S Skilling Cycle are:

  1. Skill Identification
  2. Skill Assessment
  3. Skill Building
  4. Skill Impact

Skill Identification

The first step in the skilling journey is setting up SMART goals. Goals should be Specific, Measurable, Attainable, Relevant, and Time-bound. 

2 (1)

After you've finished goal-setting, create a centralized skill repository wherein you can benchmark role-based functional, leadership, and digital skills that people need to acquire. 

Identifying trending skills and defining their proficiency level for each role should result in the creation of a skill repository. 

Make sure your skill repository is up to date-and aligned with industry trends. 

For instance, in a software firm picture a company relying on outdated programming languages and frameworks in their skill repository. As the industry moves to newer technologies (e.g., Java to Python, adopting Docker), the company's developers would lack the expertise to work on modern projects. This misalignment could slow down development, reduce efficiency, and risk competitive edge loss. Regularly updating the skill repository with industry trends equips businesses to excel in a changing landscape.

Skill Assessment

Assess employees’ capabilities by evaluating their proficiency level in each role. It helps track the employees’ potential and performance. For instance, consider an administrative assistant at your organization. Through skill assessments, you might discover that they excel in time management but need improvement in software proficiency. This evaluation enables personalized employee training and growth plans, enhancing the employee's overall effectiveness in their role.

This can be done by:

3 (1)-1

Skill Building

Once you have a clear understanding of the results of the skill assessment, the next step is to concentrate on critical skill building. Use learners' interests and proficiency levels to gather resources and create a content collection for a well-rounded skilling journey. 

Here’s how to do it:

  • Devise a content strategy to curate content.
  • Integrate LXP to map courses in a structured journey.
  • Blend learning methods, introducing concepts through live sessions followed by in-depth online modules.
  • Utilize AI-driven LXP to suggest modules aligned with benchmarked skills.
  • Implement a rewards system for course completion and high assessment scores.

Skill Impact

Once the individual has been assigned the skilling journey, it is critical to monitor if these upskilling activities are effective in boosting performance and making an impact. 

Analyze learning effectiveness and performance correlation through in-depth learning analytics Assess the alignment of learning outcomes with pre-defined role-specific responsibilities, gauge the impact on business metrics like engagement, productivity, turnover, and revenue, and monitor role scores over time with regular skill assessments.

Read how Disprz LXP helped Deloitte in upskilling its workforce.

If you are looking for a similar solution for your organization, Disprz LXP can help you too. Disprz LXP can help you create a modern and engaging learning experience for your employees to upskill and make them future-ready.

skills score


As industries evolve, skills are rapidly transforming. Addressing the growing skills gap among knowledge workers is crucial for consistent high performance. Instead of outdated training approaches, hiring managers can embrace modern skilling methods to enhance agility and readiness.

Tools like Disprz LXP can help speed up the entire skill development process. Using the skill score, the AI mechanism fetches suitable content and crafts a personal learning path for employees, helping them improve upon an existing skill, acquire new skills and advance to the next level.

Discover how Disprz LXP can bridge the skills gap and transform skill development in your organization. 


About the author

Discover how Disprz can align learning and upskilling with your desired business outcomes.