Businesses across industries and sizes are facing significant challenges in 2025. Between economic uncertainty and rapidly advancing technology, such as artificial intelligence (AI), organizations need employees with the right skills in place to navigate current and future disruptors.
The latest in-demand skills are rapidly evolving. Recent Lightcast reports found that 32% of the skills required for the average job were different in 2024 than they were in 2021. As a result, many organizations are facing skills gaps, which can hold businesses back from achieving strategic goals and driving long-term growth.
Learn more about what skills gaps are, how they impact organizations, and key strategies to address skills gaps and help your business gain a competitive advantage.
What is a Skills Gap?
A skills gap is the difference or mismatch between the skills needed by an organization to meet business objectives and the actual skills possessed by members of their workforce.
Research from ManpowerGroup shows that 74% of employers surveyed are struggling to find the skilled talent they need. The top five industries facing the greatest talent shortages or skills gaps include health and life sciences, energy and utilities, information technology, transport, logistics, and automotive, and consumer goods and services.
Gaps may include both hard, technical skills (such as C++ Programming, Data Analysis, and Prompt Engineering) and soft skills (such as Adaptability, or Critical Thinking).
Skills gaps may emerge due to a range of factors, including:
Technological advancements
Labor market demand or competition for in-demand skills
Shifting business or customer needs
Workforce restructuring
Employee turnover
Inadequate employee upskilling and reskilling
Lack of an internal skills inventory or proactive skills mapping
How Do Skills Gaps Impact an Organization?
According to global research from the World Economic Forum, 63% of organizations indicate skills gaps will be the biggest barrier to business transformation through 2030. However, this is only one of many ways skills gaps impact businesses. Other potential impacts include the following.
Decreased Productivity
When employees lack in-demand technical skills or necessary soft skills required to collaborate effectively, this can hold them back from reaching their full potential. This can lead to productivity challenges such as longer timelines to complete projects, mistakes or errors, and challenges with internal collaboration. According to research from Multiverse, organizations lose an average of 25 days of productivity per year due to data-related skills gaps.
Innovation Barriers
Skills gaps can significantly hold back an organization from embracing the latest technology and driving innovation or efficiencies. In the absence of employees who understand emerging technologies or possess creative problem-solving abilities, companies may struggle to efficiently develop and launch new products, services, or processes. For example, if an organization lacks employees with the right skills to develop or implement AI technology, the company may continue to complete tasks manually that could otherwise be automated.
Increased Costs
Whether an employee leaves or an organization identifies an emerging skills gap, companies spend a significant amount of time and resources on recruitment, training, and retention efforts to address and close skills gaps.
Employee Morale and Retention Challenges
Skills gaps may lead to frustration among employees who feel inadequately prepared for their roles. This frustration can lead to disengagement, decreased job satisfaction, and ultimately, higher turnover rates.
Competitive Disadvantage
Perhaps most critically, organizations with significant skills gaps find themselves at a competitive disadvantage. Organizations without the right skills often lack the agility to quickly respond to market changes, struggle to meet customer expectations, and lose ground to competing businesses with more well-rounded skills in their workforce.
4 Ways to Address and Close Skills Gaps
Addressing skills gaps requires a strategic, multi-faceted approach tailored to your organization's specific needs. The following strategies can help you get started with closing skills gaps on your team.
1. Identify Current and Future Skills Gaps
Begin with a comprehensive skills gap analysis to identify existing skills gaps within your organization. A skills gap analysis is essentially a list of the hard and soft skills that your workforce currently has, a list of the skills that your workforce needs, either now or in the future, and a list of those needed skills that are not covered by your current workforce.
With a skills gap analysis, you can make a plan to acquire those skills you will need for the future. A valuable part of this process is to utilize a standardized skills taxonomy, such as Lightcast Skills, which ensures that the names of skills, and the relationships between them, are consistent between your organization and the broader labor market.
An effective skills assessment includes the following steps:
Understand your organization’s mission and goals
Ensure your job architecture (job descriptions and skill profiles) are accurate, standardized, comprehensive, and up-to-date
Identify and prioritize skills most critical to your organization’s strategic priorities
Monitor progress and regularly reassess skill needs as your workforce evolves, business needs change, and in-demand skills shift
2. Develop Targeted Learning and Development Programs
No two individuals learn exactly alike. Once you identify skills gaps and outline a strategy to address them, offer employees a variety of options and resources to choose from to help them develop skills based on their specific learning styles.
Also make sure to create a culture of continual learning at your organization, rather than one-off training sessions. This can help team members stay engaged and ensure they’re continuing to build the latest skills.
When deciding on how to engage with employees, consider the following:
A combination of formal training, on-the-job learning, and self-directed education
Experiential learning through cross-team collaboration projects and stretch assignments
Mentorship programs pairing experienced employees with those developing new skills
Opportunities to attend professional development events and conferences
Reimbursements for courses or certifications
Access to online learning platforms
Case Study: How Guild Uses Skills Reporting To Build Talent Pipelines
Guild, a talent development company, sought to bridge the gap between employee education and business outcomes by revamping traditional tuition reimbursement programs. By offering curated learning experiences through its expansive Learning Marketplace, Guild aligned skilling opportunities with corporate talent needs, ensuring employees not only accessed valuable education but also developed skills critical for career growth and organizational success.
To strengthen this approach, Guild partnered with Lightcast, integrating our Skills Taxonomy and Skillabi tools into its platform. This allowed Guild to map and validate employee skills against real-world labor market demands, offering employers clear insights into workforce capabilities and empowering strategic talent development.
3. Embrace Technology for Skill Development
Rather than tasking your human resources or talent management team with conducting manual training sessions, leveraging the latest technology can significantly enhance your organization’s ability to continually identify and address skills gaps and measure progress.
Consider the following technology solutions to help your organization address skills gaps:
Talent intelligence and comprehensive labor market data to gain insight into labor market trends, job postings, workforce profiles, compensation, career pathways, skills projections, and demographics
Learning management systems (LMS) to deliver and track personalized training paths
AI-driven learning recommendations based on individual needs
People analytics to track progress and measure the effectiveness of reskilling and upskilling programs
4. Improve Recruitment and Talent Acquisition
Addressing skills gaps isn’t only about training existing employees, but also often requires bringing new talent into your organization. Effective talent acquisition strategies can help you identify candidates with the skills you need and stand out from the competition and attract qualified job seekers.
Consider the following ways to improve talent acquisition given ongoing skills gaps:
Expand recruiting strategies to target candidates with emerging skills
Develop non-traditional career pathways and consider candidates from adjacent fields with transferable skills
Implement skills-based hiring practices rather than focusing solely on credentials
Develop apprenticeship or internship programs to build talent pipelines
Form partnerships with educational institutions to discuss skills gaps, shape curriculum development, and improve curriculum alignment with emerging roles and skills
Case Study: How Pernod Ricard Used Lightcast to Track Skills Across a Global Workforce
Pernod Ricard is a global premium spirits company with nearly 20,000 employees and more than 200 brands, including widely recognized spirits such as Absolut, Jameson, and Malibu. Given the company's global workforce, many of whom joined through acquisitions, Pernod Ricard faced challenges with gaining a complete view of the organization's roles and skills.
A few years ago, Pernod Ricard transitioned to become a skills-based organization to help the company address today's dynamic talent management challenges. To support this, Pernod Ricard needed a skills architecture that integrated seamlessly with Workday to act as the blueprint to define and structure skills across the organization. The company's existing skills architecture at the time was built from internal surveys and several different frameworks, leading to inconsistencies and gaps with how Pernod Ricard defined and tracked skills and jobs.
To address this challenge, Pernod Ricard wanted to take a more data-driven approach to reshaping their skills architecture. The company used Lightcast Skills data to build an entirely new skills architecture and Talent Transform to ensure the right skills were aligned with job descriptions across the organization, helping Pernod Ricard improve recruitment, internal training development, and upskilling efforts. As a result, the company can also now more proactively track skill usage, attrition, and emerging skills, to identify and address skills gaps.
Partner with Lightcast to Address Skills Gaps
By taking a strategic, proactive approach to identifying and filling skills gaps, your organization can build a workforce ready to address current challenges while preparing for future business needs.
Rather than managing the process of addressing skills gaps on your own, Lightcast can help.
Talent Transform identifies skills gaps and recommends learning pathways to address workforce needs and Guides organizations in adapting roles and competencies for future-readiness.
Skills Navigator helps companies understand existing skill sets and pinpoint gaps, recommends tailored learning pathways or upskilling opportunities, and aligns individual or team capabilities with market and organizational demands.
The Lightcast Skills API is free to use, and can be the first step to becoming a skills-based organization, allowing for a clear connection between internal data and the broader labor market.
The Analyst platform provides all of the global labor market you need, all in one place. When deciding how to best close skills gaps at your organization, understanding supply and demand for specific skills and occupations is an important piece of the puzzle. Analyst offers a complete view with insights you can trust.
Learn more about how Lightcast’s comprehensive labor market data and solutions can help your organization effectively address skills gaps and prepare for market shifts—get in touch with a member of our team today.
