Benchmark: What Drives the Skills Gap?

A look at some data showing the adverse affects on businesses of the current skills gap.

When employees lack basic skills, companies suffer. In a recent survey of more than 300 executives, more than half said that the lack of skills had resulted in increased costs. But most stunning was the gap between skills deficiencies and the training offered: while companies were very much aware of the skills gap, many had actually scaled back their training programs -- a disturbing trend in light of the workplace changes that are actually driving the skills gap. Below are survey responses from executives of companies with less than $50 million in sales:

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What's driving the need for basic skills?

Increased computerization 62%

More teamwork or participation 61%

Shortages of qualified applicants 31%

Decreased quality of graduates 31%

New job descriptions 21%

A lag in educational curriculums 3%

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Percentage of companies reporting critical needs in certain skills, versus those offering training

	Needs	Training
	enhancement	offered
Written communication	71%	26%
Basic computer skills	74%	63%
Inter-personal communication	68%	40%
Customer service	68%	48%
Organizational skills	71%	61%
Basic math skills	47%	5%
Cross-cultural communication	47%	10%

Source: "Managing and Developing the New Work Force," the Olsten Forum on Human Resource Issues and Trends, Melville, N.Y., 1995.

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Donna Fenn

Inc. contributing editor Donna Fenn is the author of Upstarts! How GenY Entrepreneurs are Rocking the World of Business and 8 Ways You Can Profit From Their Success (McGraw-Hill, 2009). Both this blog and the book examine the ways in which GenY is changing the entrepreneurial landscape with new approaches to starting, growing, and managing their companies. Learn more at http://www.upstartsrock.com/.