Nearly two-thirds (60%) of talent managers say the high turnover of young people leaving their jobs and the inability to find people with the skills to replace them is their biggest barrier to solving the skills shortage, according to the 2023 Global State of Upskilling and Reskilling Report from 360Learning.
More than a third (38%) of those surveyed in the UK, France, Germany and the US said losing the knowledge the older generation takes with them when they retire was the most significant hurdle.
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This problem was most pronounced in the UK among 48% of respondents.
In France and the US, finding enough new hires with the right competencies was cited as the most overwhelming skills challenge.
The baby boomer generation exiting the workforce was the second biggest challenge in France among 41% of managers, and the youth problem was the second biggest challenge in the US.
Knock-on effects
The skills gap is exacerbated by difficulties in upskilling and reskilling current employees fast enough when both young and old employees leave.
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By GlobalDataLosing knowledge from departing staff was more impactful to UK businesses than the monetary cost of replacing those members.
In the US and France, significant staff turnover was ‘demotivating’ for those left behind, while in Germany, the cost and delay of trying to fill roles made vacant by staff turnover was the biggest problem cited by managers.
Employees, frustrated by a lack of career progression in their current role, are more inclined to look externally for a new job, the report found.
US talent managers said they struggled most with managing the transfer of knowledge between experienced colleagues and newer team members.
Last month, anonymous sources revealed that TSMC is considering Japan as its next overseas location whilst the chip maker struggles to hire skilled workers for its billion-dollar Arizona, US, site.
The Semiconductor Industry Association (SIA), alongside Oxford Economics, published a study predicting that by 2030 there will be a “projected shortfall of 67,000 workers in the semiconductor industry by 2030.”
Countries globally, with recent examples such as Germany and Taiwan, have faced a similar shortage of skilled workers.
What is the ‘Great Resignation’?
Companies worldwide have been hit by labour shortages and have struggled to fill vacancies. In particular, the ongoing ‘Great Resignation’ has seen millions of workers leave their jobs. Despite this, the rate of unemployment in the UK remains close to a record low and the number of job vacancies is still higher than pre-pandemic levels.
By late 2021, there were 50% to 80% more unfilled jobs in Australia, Canada, the UK, and the US than before the pandemic according to the International Monetary Fund.
Shifting hiring practices
Hiring externally has long been the focus for businesses across all sectors. However, businesses are shifting to internal hiring in an attempt to cut costs, as well as increasing proprietary skills amongst current employees.
Across all of the countries surveyed, a quarter of talent teams prioritize internal hiring over bringing people in from outside.
In the UK, US and Germany, talent teams are predominantly taking a 50/50 approach to internal and external hiring, while there’s a slight preference for external hiring in France.
However, almost two-thirds of the survey’s respondents described internal upskilling opportunities as inadequate which is contributing to the skills shortage.
More than half (58%) said that the sharing of knowledge between more experienced colleagues when they moved internally, was “well-meaning…but full of gaps.”
This may be explained by the fact that in Germany, only 34% of learning and development teams are involved in mapping skills to job roles and implementing upskilling and reskilling strategies.
In the US, that figure is 36% and in France, it’s 37%. It’s only in the UK that the L&D team is more closely involved with 50% of respondents saying the L&D team plays a part in mapping skills to job roles and implementing upskilling/reskilling strategies.
Research by LinkedIn found employees are more likely to stay at companies that invest in their learning long-term.
David James, chief learning officer at 360Learning, said: “The skills crisis is putting significant pressure on businesses of all sizes with the loss of internal skills and knowledge, whether from high turnover amongst younger employers to baby boomers retiring and the inability to hire skilled talent.”
