Eric Friedman is the Founder and CEO of eSkill, a global leader in skills testing and behavioral assessment solutions for employers.
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Organizations across all industries are struggling to find qualified candidates, and many critical job roles are going unfilled. Many attribute this unprecedented talent shortage to the "Great Resignation," when over 4 million people left their jobs in 2021. However, the skills shortage problem has been growing for the past 10 years.
A 2020 Deloitte study shows that U.S. companies have seen an increasing shortage of candidates with in-demand skills for the past decade. The problem started because organizations embarked on initiatives to deploy new technology and implement digital transformation to maintain their competitive edge.
Requirements changed for some job roles. Other jobs have disappeared altogether. And many new job roles emerged. However, many candidates' skills did not keep pace. So employers have positions to fill and can't find candidates with the right skills, and applicants who want to grow their careers are stuck in low-level jobs with little hope for advancement.
Reinventing The Workforce
According to a Korn Ferry report, a worldwide talent shortage of over 85 million people could cost businesses around $8.5 trillion in annual revenues if it is not addressed by 2030. The problem has become so severe that 71% of CEOs believe the shortage of skilled talent will be their most significant business challenge for the foreseeable future.
The U.S. Department of Labor has responded by increasing funding for its Dislocated Worker Grant program by $100 million to provide training and temporary employment to displaced workers.
Many companies, including Amazon, PWC, Accenture, Walmart and McDonald's have concluded that upskilling and reskilling are the solution and have invested billions in programs that help employees improve existing skills, learn new skills and get college degrees.
What are upskilling and reskilling?
Upskilling means providing employees with training that helps them learn new skills to improve their performance in their current job or move to a similar role. For example, a warehouse manager could complete training to learn a new inventory system to perform a current job more efficiently or to prepare for a move to a similar position, such as an operations manager.
Reskilling means providing training that helps employees move into a different job or pursue a different career path. For example, a Java programmer interested in transitioning to a cybersecurity manager role probably has many of the required technical skills but needs training in other areas.
Business leaders planning their recruiting strategies for 2023 and beyond are looking for ways to build a future-ready workforce. Many are adding upskilling and reskilling into their hiring process and including skills assessment tests as a critical component.
Why Employment Testing Is Essential For Upskilling And Reskilling
A 2021 World Economic Forum report predicts that over half of all employees worldwide will need to reskill or upskill by 2025. Here are three ways employment tests can help organizations implement effective upskilling and reskilling initiatives:
1. Outmaneuver The Talent Shortage
Around 83% of HR professionals surveyed said they have difficulty finding qualified candidates for critical job roles, and one-third said most applicants lack the required job skills. Since the situation is not likely to improve anytime soon, many organizations have decided to develop the talent they already have. Skills assessment tests enable HR and learning/development (LD) leaders to evaluate employees' skill sets and determine where knowledge and skills gaps exist.
2. Avoid Future Workforce Disruptions
The hiring landscape has changed, and business leaders know they need to invest in their biggest asset—their employees—if they want to remain competitive. This is a win-win situation because workers acquire new skills and businesses create a talent pool that helps them quickly adapt to marketplace changes. Employment tests enable HR and LD teams to create corporate-wide skill maps so they can forecast future skill sets their organizations will need.
3. 'Future-Proof' The Workforce
Technological advances such as digital automation, artificial intelligence (AI) and machine learning replace jobs, but they also create new opportunities. If a company "future-proofs" its workforce by training employees on the latest technology, they will be able to perform their current jobs better and will have the necessary skills to transition to new roles. Skills assessments help HR and LD leaders identify skills and knowledge gaps so they can develop personalized training plans for each employee.
Today's job candidates want to work for organizations where they can advance their careers. Almost 90% of millennials, who comprise the largest worker segment in the U.S., prioritize professional development and career growth opportunities when considering a job offer. So organizations that want to attract the best candidates in 2023 and beyond must incorporate upskilling and reskilling into their hiring and training strategies.
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