Just what is the skills gap?
The ‘skills gap’ refers to the disparity between the skills that employers need from applicants and those that applicants, or their current employees, actually have. This mismatch can hinder business growth, new ideas, and an organization’s ability to keep up with their competitors. Addressing this gap is as important an issue as it’s ever been, as rapid technological advancements and changing industry demands reshape the way in which businesses find the right talent, with the right skills.
Understanding the importance of closing the skills gap
The skills shortage doesn’t just affect individual businesses — it has an effect on the economy as a whole. In fact, according to Forbes, labor shortages may represent more than 6% of the entire U.S. economy.
Furthermore, companies that struggle to find the right skills within their workforce may also find themselves unable to expand, innovate, or take on new projects. A recent Global Talent Shortage survey found that 74% of U.S. employers report difficulty in finding skilled talent, leading to lost revenue and project delays.
In addition to this, funding cuts to Further Education (FE) colleges have also played their part in an overall skills shortage. Given the role these institutions play in providing vocational training and upskilling, reducing their funding only serves to limit their ability to address the skills gap effectively.
Challenges presented by the skills gap
The skills gap presents many challenges – chief among them being:
- Talent shortages: More than half (51%) of business leaders are concerned about future talent shortages, and only 32% are confident their organization has the skills needed for long-term success.
- Hindered economic growth: The skills gap can stifle economic expansion by limiting businesses’ ability to grow and compete.
- Wage inflation: A shortage of skilled workers can drive up wages as companies compete for limited talent, increasing costs. In the US, approximately one third of workers lack foundational digital skills, with 13% having no digital skills and an additional 18% possessing limited digital abilities. This causes wage inflation in sectors reliant on these skills.
But, there is hope.
There are a number of ways you can address the skills gap.
5 ways you could look to close that skills gap
To bridge the skills gap effectively, businesses can adopt several strategic approaches, but here are a top 5 that are well worth considering:
1. Sector-based workforce development
Focusing on industry-specific training programs can address particular skill shortages. By collaborating with industry leaders, educational institutions, and community organizations, businesses can create targeted training initiatives that equip workers with the skills in demand within specific sectors.
2. Reskilling and upskilling initiatives
Continuous investment in employee reskilling is vital. Companies should implement mandatory training programs and adopt in-house learning platforms to enable employees to adapt to new technologies and processes.
3. Inclusive hiring practices
Expanding talent pools by adopting inclusive hiring practices can also help to bridge the skills gap. Creating a diverse workforce, including those from often underrepresented groups, brings new perspectives and skills into the workforce. This, in turn, improves productivity and leads to a more innovative mindset.
4. Collaboration with educational institutions
Building partnerships with schools and universities ensures that educational programs align with industry needs. By providing input on course content and offering apprenticeship programs, businesses can help prepare students with the relevant skills required in the workforce. This collaboration creates a pipeline of talent equipped to meet future business challenges.
5. Embracing technological solutions
Using technology to identify skill gaps and deliver personalized training can boost the capabilities of an existing workforce. Artificial intelligence and data analytics can assess employee competencies and recommend targeted development programs, ensuring that training is efficient and effective.
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A 6th way: using contingent staffing to your advantage
Contingent staffing offers a flexible, cost-effective, and scalable approach to workforce challenges, including closing that skills gap. Instead of relying solely on permanent employees, businesses can tap into a growing pool of temporary and contract workers who have new skills to bring to the table.
This approach comes with a number of key benefits attached, including:
- Immediate access to in-demand skills: Traditional hiring processes can take weeks or even months to find the right candidate. Contingent staffing solutions, on the other hand, provide on-demand access to pre-vetted, highly skilled professionals who can step into roles immediately. Whether a company needs data analysts, IT specialists, warehouse operatives, or healthcare professionals, contingent workers bridge the skills gap without delays.
- Upskilling opportunities without long-term risk: Many contingent workers bring niche expertise and fresh industry knowledge that existing employees can learn from. Businesses can use these professionals to transfer their knowledge and upskill their existing teams, closing skill gaps internally. This creates a hybrid workforce that blends both internal and external expertise.
- Cost-effective workforce strategy: Permanent hiring is necessary, but also comes with expenses. Salaries, benefits, pensions, and training costs all add up. Contingent staffing allows businesses to hire talent only when needed, reducing overhead costs and ensuring that businesses remain within budget.
- Flexibility to scale up or down: Market conditions can change rapidly, so businesses need a workforce which can adapt accordingly. Contingent staffing enables businesses to scale their workforce based on real-time demand, ensuring they have the right people in place without the burden of maintaining an oversized permanent team.
- Increased innovation and diverse perspectives: A contingent workforce introduces new perspectives, experiences, and problem-solving approaches that can drive innovation across teams. Companies that rely on diverse talent pools are often more adaptive, competitive, and creative in their strategies.
Implementing a contingent staffing strategy
If closing the skills gap through the use of contingent staffing is the route your business would like to take, then you should carefully consider the following:
- Assess workforce needs: Identify which roles and skills are lacking and determine whether they require temporary or permanent solutions.
- Partner with a trusted staffing provider: Work with agencies or platforms that specialize in contingent staffing, to access pre-screened, high-quality talent.
- Use workforce technology: Implement Vendor Management Systems (VMS) to streamline recruitment, compliance, and workforce planning.
- Develop an integrated workforce plan: Blend contingent and permanent employees to generate long-term workforce stability.
- Monitor performance and adapt: Regularly assess workforce effectiveness and adjust staffing strategies as needed.
Closing the skills gap: the final word
Closing the skills gap in 2025 requires a multifaceted approach that involves strategic planning, targeted training, inclusive practices, the adoption of new technology, and giving serious consideration to bringing in a contingent workforce.
Businesses that look to contingent staffing as a solution will, more often than not, be better positioned to adapt, grow, and remain competitive — blending permanent and contingent talent for the ultimate hybrid workforce, with the right mix of skills.
Ready to close your skills gap? Get in touch with one of our staffing experts today and discover how a flexible workforce can transform your business.
