Why the Skills Gap Matters for Today’s Small Businesses

In 2013, 39 percent of American companies reported that they were unable to fill positions thanks to a lack of sufficiently talented job-seekers. This mismatch between the number of qualified people looking for jobs and the positions that managers would like to fill is known as the skills gap, and it’s not going anywhere anytime soon. The skills gap can be especially painful to small businesses, who rely on finding qualified employees to fill crucial positions within the company. Compare this to larger corporations, which would like to find talented employees to work within a team of similarly qualified people.

Here’s everything that small business owners and managers need to know about the skills gap and how it can affect you.

It’s Not What You Think

It can be tempting to attribute employment difficulties of all stripes to the economy. After all, recession cycles are a huge factor in determining unemployment rates. However, this would be a mistake when it comes to deciphering the skills gap. We know this because, so far, the skills gap has persisted through recessions.

It’s also not the case that the skills gap is due to a lack of education. In recent years, as the skills gap has become larger on the radars of business analysts, the average education level of employees has done nothing but go up. Additionally, millennials, the most educated workforce population ever, are famous for their tough luck on the job market. Ultimately, it’s hard to make the case that employees aren’t getting the necessary education before entering the workforce.

Instead, we should parse the skills gap in terms of technology growth. In the past few decades, technology in the workplace has taken off at an unprecedented pace. These days it’s ludicrous to imagine running a business without an office full of computers, a dedicated company connection, and a professionally designed website.

The skills gap, then, has arisen due to a level of ongoing technological advancement that outpaces the ability of workers to learn how to use new tech. This view is supported by the increased prevalence of skill-gap-related hiring difficulties in tech fields. For example, Villanova University reports that a remarkable 78 percent of American companies had difficulties hiring data analysts in 2016.

That’s the problem, but what can small businesses do to fix it?

Going Forward

The skills gap hits small businesses harder than anyone, since small businesses live or die based upon whether or not they can find skilled labor to fill their ranks. For these businesses in particular, it’s critically important to close the gap.

Here are some things for owners and managers to try in their own small businesses:

• Identify software trends early on, find the right tools for your business, and then stick to them. Many employees have difficulty adapting to new software, but the shock value of an upgrade can be limited by sticking to the same brand over time. For example, the newest version of Photoshop is going to be more similar to its predecessor than switching over to Sketch.
• Don’t upgrade until absolutely necessary. As far as software upgrades go, developers these days are eager to push out new versions like clockwork. However, just because a new version exists doesn’t mean that you need to buy it right away. As an example, many corporate computers are still functioning just fine on Windows 7, passing up two unnecessary upgrades and saving a lot of money in the process. Adopting new tech without sufficient benefit to you just serves to widen the skill gap in your talent search.
• Train employees in-house and test them on their knowledge. There are some who believe that the skills gap is, in fact, a corporate conspiracy perpetrated by various business leaders. These conspirators’ goal? According to the Harvard Business Review, it is to convince the government to take on the task of training employees. Needless to say, this doesn’t seem to be true, and the government is not likely to do your job for you anytime soon. It’s critical for employers to train new and existing employees on new pieces of tech relevant to their domains.

The skills gap isn’t going anywhere anytime soon, and it presents a greater danger to small businesses than anyone else. However, with a strong grasp of the causes behind the skills gap and strategies to respond, small business owners can stand their ground and find the talent that they need.

Author: Nick Cesare works at a local startup in Boise, ID. He’s interested in how businesses can rework themselves to be environmentally friendly and take charge of improving their own environmental communities. You can reach Nick @cesare_nick.