Every few months for at least the last 10 years, studies, articles, and reports have had plenty to say about the ongoing skills gaps affecting business productivity. This is no temporary crisis and the gaps grow larger every year. Gartner says 58% of the workforce needs new skills to do their jobs. Furthermore, the number of new skills needed in jobs increases by 5.4%, so the situation is getting worse. In the meantime, most workers say that they do not receive information from their employers about how to improve their skills.

Why are there skill gaps? 

Causes and solutions

Skill gaps are the result of rapid technological change and rapid changes in the complexity of work, along with digital transformation and automation. Graham Glass, founder and CEO of CYPHER Learning, a member of Forbes’ HR Council, and a former educator, feels strongly that the skills gap presents a serious threat to businesses today, although he also believes that the problem is not insurmountable.

I spoke to Glass recently and asked for his view on the reasons for the skills gap, how the rapid pace of business has made it worse, the effects of the gap on business outcomes, and how to develop a strategy for upskilling and reskilling to quickly address the situation.

Bill Brandon: Graham, thank you for your time today. Could you start by telling me about your company, CYPHER Learning?

Graham Glass: Thank you, I’d be glad to, we have a cloud-hosted learning platform used by businesses, universities, schools and entrepreneurs around the world. We are a little bit unique in that regard. We’ve been tracking skills development and competency-based learning for a long time. In fact, the reason I started the company was to create a platform to deliver an incredible, personalized learning experience. We have three branded versions of the product: NEO for K-20, MATRIX for businesses, and INDIE for entrepreneurs.

What is a skills gap?

BB: What’s your definition of the skills gap? What are we dealing with here?

GG: That’s a great question. You can even take a step back and say, “What is a skill?” I’ll start with that. If you look in the world of engineering, you might say that an example of a skill is architecture -- being able to architect a computer system.

One of the things we believe in philosophically is fine-grained competency as opposed to just very broad topics. So we would say typically a skill would be SQL databases as a particular area, or scalable architectures, or digital security. If someone is a software engineer, the skills gap would be defined by the difference between all of the things that individual should know in order to say they were a Master of Software Engineering, and that person’s current level of competence or mastery of all these individual things. Whatever the difference is that would be the skills gap for that particular engineer.

BB: How is the rapid pace of change in today’s business landscape making the skills gap worse? How are digital transformation and automation contributing to the skills gap?

GG: One of the things that I’m personally experiencing right now is a skills gap related to artificial intelligence (AI). As I’m sure you know, ChatGPT has taken the world by storm. It’s kind of amazing. And then instantly, everyone can be touched by this technology -- not just technologists. It's artists, it's creative writers, it's medical professionals. Instant skills gaps, right? Because now, some of your competitors are up to speed on ChatGPT and they're raving about making incredible videos and all kinds of stuff with it. Not only that, many of them are also already adopting GPT-4. And yet another person who doesn't know about it is getting left behind. And that's just one data point. There's a lot of going on in AI. There's a lot going on in material science. If you're a manufacturer, people are now using all kinds of exotic materials to out-compete you. Electrification is sweeping across multiple industries. From what I can tell, it's just accelerating. It's not easy stuff to learn. So, we've got this: a lot of gaps taking place, and then people are wrestling with the best way to close the gaps again, so they don't get permanently left behind.

I would say part of the digital transformation is learning how to use digital technologies efficiently to upskill people and close those gaps. These days, if you use digital technologies, your organization will be able to say, “Hey, GPT-4 is now one of the competencies that you should know. You haven't yet mastered that. So, we're going to automatically recommend videos and courses to teach you about GPT-4. And we can assess your learning once you've taken some of these courses or watched the videos. We're not going to rely on self-assessment. Then we can say, you truly have mastered this. Now you've closed the skills gap. Now you have everything that you need in your current job title.” Using digital technology to close the gap is what I think of as digital transformation for skills gaps.

BB: It's amazing to me, and I do use AI tools in my work. How are the skills gaps affecting productivity and retention?

GG: There are different ways to look at the skills gap. One kind of skills gap means that my people are not as effective as possible. For other people, it's more personal. “Skills gap” to them means in this job, they're not really helping me to get better at what I do, so I need to go somewhere else because otherwise I'm going to get left behind. So, there's two different vectors. There’s “I want to increase my productivity vector to make my current company more efficient,” and there's “I don't want to get left behind in my career.” I’ll give a more specific example from my own company. It's important for the success of our product, and thus our company, for our engineering team to be on top of the latest technologies. GPT-4 is an obvious one, but take cloud-based computing as another example: all these learning platforms used to be on-premises sitting in individual boxes, but now you've got companies like ours that are hosting millions of students with hundreds of thousands of new students a month on the platform. We’ve got to architect the platform to be cloud ready. And that's another example of a skills gap, because a lot of engineers don't have experience building scalable systems. They're not considering all the complexities. In our company, it's important that all the engineers are unstoppable – they’re on top of GPT evolution, modern architectures, scalable architectures. If they're not it means our company will not be as successful.

Creating Dream Teams

GG: We want to proactively give engineers that training to make sure that there are no unnecessary skill gaps. As I mentioned, philosophically, we like the idea of every individual maintaining a set of competencies for their individual strengths and weaknesses. Here are 100 things that you should know to master math, for example. As you gradually take those bite-sized things, it’s like checking off the boxes. “You are 80% towards mastering math.” So, our philosophy is, you create these competency maps, in our case for engineering, and then we automatically serve up, through our platform, training materials to close those gaps.

I tend to think of it more from a positive aspect: I want to create my dream team, more than from the negative aspect, I don't want people to quit. Different people's gas mileage may vary, but I've always looked at it like this: “Hey, VP of engineering, you want to create your dream team. So, find out the competencies of every single member and then in an efficient digital way, target the gap, and provide personalized videos and content for each person to close that gap. Then you're creating your dream team. They'll be happy because they're staying with a modern technology, but it's also extremely efficient. You're serving up relevant content per person, based on their own personal skill gaps.

BB: As an employer yourself, how do you think about what a career is? At one time a career meant you mastered one set of skills and competencies and you stayed with it for 50 years. Today, you're lucky if you have a career or competencies that last for 50 months, let alone 50 years. As an employer, how do you deal with that? You're looking for people you don't want to see leave, but you know they're going to.

GG: I'd say so. I tend to look at it like, I want my dream teams. That's what I want for the success of CYPHER Learning. And you're right. I mentioned engineering because I'm more familiar with engineering than, say, marketing. But if you look at marketing right now, it's so different in some key regards than it used to be, with digital marketing and targeted personas. Some things haven’t changed, but a lot of it has. For my marketing Dream Team, I need people who are good at all of that stuff. And there are going to be some people who rise to the challenge, either because they're experts, or they're thirsty and they stay on top of things. And it's entirely possible to stay on top of things and really enjoy what you do and stay with a company for a long time.

Creating a skill strategy

BB: What are your recommendations for a skill strategy? Considering what we've been talking about?

GG: What I would say at a high level is if you want to assemble a dream team in your company, and you want to do it efficiently, it's important to understand this new generation of competency-based learning. And the reason I say that is because each person is different. The skills gap will be different for each individual person. And you don't want to burden people and say, one size fits all, like, “Hey, there's this new technology, everyone has to take a course on cloud-based architecture.” Then people already know it's going to be, “Why do I have to listen to this, what a drag,” and I click the play button and have a cup of coffee and get my certificate. What you'd like to be able to do is to understand each person's strengths and weaknesses, then provide the content and training to plug those very specific gaps.

The first thing I would do is to say we know there are gaps, but we want to create our dream team. We want to do this efficiently. Part two is, to do it efficiently, I need to create a set of competencies that I can measure and assess. And once I know the skills gaps then I can use a platform that will recommend the specific content, upload those specific apps in real time, and assess those skills afterwards. That's an important one. I don't want people to just self-assess and think “Yeah, I'm brilliant at this now.” Well, maybe you are and maybe you're not, I would like to measure and confirm. CYPHER is the only company in the world to provide that whole stack: the ability to create the materials efficiently, to measure competencies at a fine grain, to automatically assess those competencies, and to automatically recommend courses based on the skills gap.”

BB: Given that, even to be part of a dream team requires a wider spectrum of skills and competencies, not just one. What do you think are the most important gaps to address?

GG: I would say it probably fits into two categories. One is your domain skill gaps. Clearly, if you're in sales, you want to stay on top of the latest sales techniques. But then the other aspect is your soft skills. The way that you lead your team, the way you communicate with your team, the way you empathize with your team. And even those skills have changed over time.

I think in the olden days, a lot of leaders might have been quite authoritarian: “I don't care if you like this or not because you're going to stick with my company for 15 years. You do XYZ and I'm going to go back and smoke my cigar.” Whereas I think these days, especially the younger generation, they expect to form a tighter bond – and it's not just about work. They're going to be discussing other things in their lives. People have various hardships, and they want some empathy. So, I would put really soft skills, like leadership, in one bucket, and then the specific domain skills in the other, and you can create as many competency groups as you want. You'd have a competency group for leadership, with all the various elements. Competencies for digital marketing, competencies for whatever those other buckets are. And then you would say: For this job title, you need to master these competencies. And these ones, and these ones. There might be 50 or 60! And, yes, it sounds like a lot -- but it's really not a lot, if you look at what you do in your everyday life. Having 50 or 60 competencies that are tracked and if a job title has a new competency, then you just add that competency in the job title. And the system says, “Hey, GPT-4 is now a required competency and you have not mastered it. So I'm going to say: maybe you would benefit from this course in GPT-4.” But you can make this incredibly efficient as part of your everyday work life -- as opposed to some administrator saying, “Hey, everybody, I just found this course and I‘m sending you a link.” That's like the old way of doing things. But new-generation platforms can be much better at helping you learn. And CYPHER is achieving that.