What is a skills mismatch?

A skills mismatch refers to the gap between the skills your employees have and the ones they need to fill their roles effectively. This misalignment can happen when employees are underqualified or overqualified for their positions. Employees may also have exactly the right skills you need but in a different field of discipline. Rapid technological advancement may also shift how some skills are valued or implemented in some positions.

Understanding skills mismatch issues

When you want to maintain a competitive and productive workforce, aligning skills to positions better leverages your existing talent pool. Improved alignment may also increase productivity, reduce turnover rates and boost business growth. Putting experienced and skilled team members in key roles may also lead to innovation, further enhancing your workforce’s effectiveness. Make the most of your current workforce by understanding the types of skills mismatches and how they might affect your bottom line.

Vertical skills mismatches

Vertical mismatches occur when employees have too few or too many qualifications. Overqualified employees have more advanced skills than their job requires, so they can’t necessarily show their full potential. This may lead to issues with employee satisfaction. On the flip side, underqualified employees who don’t have the necessary skills for success may require more training to be productive and efficient.

Horizontal skills mismatches

When employees are highly qualified in different areas than their current roles, it creates a horizontal skills mismatch. For example, you might hire an individual with excellent IT support skills to lead a department. However, after they begin their role, you may realize they need further development in leadership skills to effectively lead a team.

Skill obsolescence

Fast-paced changes in technology can make some skills outdated quickly. When this happens, employees hired for specific skill sets may need to upskill, and certain roles may evolve or even disappear. These technological and industry shifts present opportunities for your business to innovate and stay ahead of the curve, ensuring your team remains competitive and adaptable.

What causes skills mismatches?

You may not even notice skills mismatches until they pose a problem to your business. Knowing why a skills mismatch might happen helps you spot problems in advance to maintain a more effective workforce.

Some of the most common causes include:

• Incomplete job descriptions. As duties and responsibilities change, so should your job descriptions. Keeping each job description current helps ensure candidates who apply have the specific skills and broader core competencies you need.
• Miscommunication in the hiring process. Your HR department needs to fully understand the job requirements to effectively hire. Communicating your needs clearly, including all the necessary skills, can help hiring managers make better decisions.
• Emerging technologies. New tools and software are frequently launched, promising something new and novel for businesses. As key areas such as production and reporting move to these new platforms, you may have to upskill employees to keep their roles relevant.
• Education and training issues. Skills employees learned in college or technical training programs may become outdated as industry practices and technology change. Tweaking your internal training programs, however, may help employees feel more prepared for their roles in an ever-changing business landscape.
• Limited available talent . When you need qualified candidates for niche-specific roles, such as expertise in specific programming languages, you may find limited talent. A good company reputation and attractive benefits package may help you with hiring in tight conditions.

Identifying skills mismatch problems

The first step to fixing a skills mismatch is identifying when it occurs. Taking a proactive approach helps you discover the root causes of these issues and strategize to prevent them in the future.

Skills mismatch signs

Skills mismatch issues can cause a variety of problems within your workplace. However, recognizing issues as they arise helps you handle them quickly.

Some common signs of a skills mismatch may include:

• Employee engagement issues. When workers feel like they don’t belong in their roles, they may not feel challenged or appreciated, decreasing motivation.
• Reduced productivity. Employees who lack the training or skills to do their jobs may struggle to complete tasks and projects, leading to decreased efficiency and productivity.
• Higher turnover rates. Employees who don’t feel like they’re reaching their full potential or who struggle with their daily tasks may seek jobs where they can better use their skills.
• Difficulties in hiring. In some locations, hiring managers may find it difficult to source strong candidates. In this case, you may need to invest more in training your teams based on your needs.

Assessing skills mismatches

Conducting a thorough assessment of your workforce can help uncover skills mismatches. A skills gap analysis can identify gaps between what you need and what you have. It compares the skills workers have against the required competencies for their roles. This analysis helps you find gaps and pinpoint areas where you need to upskill or reskill employees or hire new workers.

Employee surveys and feedback also help you find a skills mismatch. Ask employees where they need more support and provide it by leveraging peer-to-peer training. Performance evaluations based on productivity metrics also help you spot areas with lower performance and address those issues with further training.

How to prevent skills mismatch issues

A proactive approach and strategic planning can help you prevent a skills mismatch. Focusing on crafting effective recruitment strategies, continuously training workers and flexibly managing your teams helps you better align your employees’ skills with your needs.

1. Craft effective job descriptions

Focus your job descriptions on the skills you need the most. Communicate your needs clearly by outlining all the duties, responsibilities and qualifications candidates need for the role. Include the hard skills and soft skills candidates must have to succeed in the job.

2. Use skills-based assessments

If you’re hiring for technical positions, a skills-based assessment test can help identify candidates who are qualified for the role. Along with resumes and interviews, these tests can help you see how a candidate applies their skills.

3. Team up with training programs

Education institutions and training programs often help graduates find jobs, so teaming up with them provides access to fresh talent pools. These sources may help you hire people ready to take on the challenges of emerging technologies or address specialized skills your current workforce needs for success.

4. Leverage AI tools in the hiring process

AI tools, like AI resume screening, can help you analyze candidate skills to see if they match your job requirements. This can help you quickly sort through resumes and applications. You might also leverage these tools to look at current employees’ skills to find training opportunities that bridge a skills gap.

5. Tweak your interviews

Ensure your HR department understands your needs and asks the right questions during interviews. For example, if you need someone to lead a programming department, you can use behavioral interview questions to ask about their leadership skills.

6. Onboard new hires effectively

Set new employees up for success with an effective onboarding plan. Discover their skills during the hiring process, and provide them with additional training right away via mentorship, peer-to-peer training or online learning tools relevant to your industry.

7. Support professional development

Let employees know they have room to grow with your organization. Retaining an employee who does their job well means your company also keeps all the accumulated institutional knowledge they carry.

8. Utilize flexible work arrangements

To solve the skills mismatch at your company, you may need to expand your candidate search to find the skills you’re looking for. Likewise, flexible work hours and hybrid schedules may also help you retain good employees currently on staff who want to improve their work-life balance.

9. Adapt to change

Change happens, so stay prepared by analyzing workforce data and changing job descriptions and processes as needed. Use AI tools for predictive analysis of future needs to develop and implement training programs that help employees meet emerging trends.

Preventing a skills mismatch issue can save your business money and help you retain quality staff you already have. Use these insights to develop data-driven strategies that help you avoid the problem and make informed decisions about the skills your workforce needs.