What Is a Skills Gap?

Key takeaways

A skills gap is the difference between the skills or qualifications employees have and those that employers require to meet their business objectives.

• The International Data Corporation (IDC) predicts that by the end of 2026, over 90 percent of companies will face the challenges of skill shortages, which may lead to delays in digital transformation, reduced competitiveness and revenue, and low product quality [1].

• Skills gaps result from a lack of experience in the current workforce, inadequate training, decreased labor force participation, and an outdated educational system.

• You can overcome skills gaps in your organization by conducting a skills gap analysis and using this knowledge to develop tailored learning programs, refine your talent and recruitment strategies, and adopt appropriate technological solutions.

Discover why skills gaps exist, their extent and impact, along with ideas on how to overcome the skills gap with training and other strategies. As you work to close critical skills gaps in your workforce, consider Coursera for Business to deliver targeted, role-based learning across your organization. With curated content in areas like data, information technology, and AI, your teams can develop practical skills aligned with evolving business needs.

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What are skill gaps?

A skills gap is the difference between the skills or qualifications employees have and those that employers require to meet their business objectives. A shortage of essential competencies can hamper employee performance and productivity, in addition to making it difficult for employers to fill open positions. The International Data Corporation (IDC) predicts that by the end of 2026, over 90 percent of companies will face the challenges of skill shortages, which may lead to delays in digital transformation, reduced competitiveness and revenue, and low product quality [1]. 

Understanding and assessing skills gaps in your workforce can help you better plan workforce succession, improve employee retention, provide targeted training and development opportunities, and align employee skills with business objectives.

What are the different skills in the skills gap?

Various skills, including workplace and technical skills, across multiple industries combine to make the widening skills gap. The World Economic Forum (WEF) projects that 39 percent of workers’ current skills could become transformed or obsolete between 2025 and 2030 [2]. 

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Global Skills Report

The World Assessment Council identifies the in-demand skills contributing to the widening skills gap [3]:

• Critical thinking

• Artificial intelligence (AI) and machine learning

• Adaptability and continuous learning

• Data analysis and visualization

• Digital literacy

• Cloud computing

• Cybersecurity

The WEF predicts that advancements in AI, information processing, robotics and automation, and energy generation and distribution will have a transformative effect on in-demand skills by 2030, with technology-related skills like AI, big data, networks, cybersecurity, and technological literacy seeing significant rise in demand [2].

Read more: Tech Skills for Business Success

Why does the skills gap exist?

What drives the continuing skills gap? In truth, it’s a multifaceted issue linked to various factors, including the following:

• Lack of experience: Many workers with extensive experience are planning to retire. The Alliance for Lifetime Income estimates that over 11,200 Americans will reach retirement age daily, amounting to 4.1 million US citizens reaching 65 years of age each year through 2027, many of whom work in senior-level roles [4]. Skills, knowledge, and know-how accumulate over time, and these workers take a lot of technical and institutional know-how with them when they go.

• Inadequate training: You could rename the skills gap a “training gap.” You can often attribute the problem to poor on-the-job training and supervisors and mentors failing to provide robust training. Instituting programs to nurture employees and support reskilling and upskilling can help close the gap.

• Decreased labor force participation: According to the US Bureau of Labor Statistics, 53.1 percent of the US population aged 16 to 24 years were employed in July 2025, down from 54.5 percent in July 2024 [5]. Additionally, the longer young workers remain in entry-level roles or are kept out of the workforce, the more challenging it is to get the needed skills.

• An educational system that doesn’t keep pace: A lack of training at work isn’t the only concern. Many academic institutions can’t keep up with the rapidly shifting technological advances and the changes in the economy. Schools can rectify the situation by offering more hands-on experience and education through internships, real-world instruction, and partnering with employers to create comprehensive educational programs that give learners the skills employers need most.

Research remains ongoing to further identify the causes of skill gaps and the challenges they pose across industries. Employers and educators can work together to provide insight and solutions to address the skills gap now and in the future.

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The global extent of the skills gap

A skills gap can not only decrease employee performance and productivity, but it can also reduce your company’s profits and competitiveness, increase employee turnover, and hamper your business’s economic growth. 

A persistent and extensive skills gap makes it difficult for individuals to find jobs and for employers to find the right workers with the proper training for the job. According to the World Assessment Council, 87 percent of employers worldwide struggle with finding candidates with the right skills, while 72 percent of employees fear their current skill set would become outdated in the next five years [3].

Professional services firm PwC examined the skills gap for the 2026 World Government Summit. The researchers found a widening gap between formal qualifications and the skills the labor market needs, placing increased focus on demonstrable skills, adaptability, and continuous learning. 

“Stakeholders in education, business and government need a new and structured framework to think through how to assess where they stand in terms of need and capability, and how to design solutions that are evidence-based and aligned with emerging or recognized standards” [6]. 

Additionally, 63 percent of employers in the WEF’s Future of Jobs report identified skill gaps as the biggest barrier to business transformation between 2025 and 2030 [2].

How to overcome the skills gap

To close skill gaps, 85 percent of employers in the WEF survey reported adopting upskilling and reskilling strategies, 70 percent planned to hire staff with the necessary skills, and 50 percent planned to move staff from declining to growing roles [2]. The first step to overcome skill gaps in your organization is conducting a skills gap analysis to identify your employees’ current skills and compare them against the skills you need to reach your organizational goals. You can then use this knowledge to develop tailored learning and development programs, refine your talent and recruitment strategies, and adopt appropriate technological solutions.

• Conduct a skills gap analysis: A skills gap analysis involves assessing the skills your workforce currently has and the skills your organization needs, and comparing them to identify areas of shortage. You can do this by conducting surveys and interviews with your staff or utilizing skill assessments and competency frameworks.

• Develop a tailored learning path: Upon understanding individual employees’ skill gaps, consider investing in reskilling and upskilling strategies that take into account each employee’s learning styles and career goals. This may involve on-the-job training, access to online learning platforms, certifications or workshops, digital apprenticeships, etc.

• Improve talent and acquisition: Adopt effective hiring practices by clearly outlining your organization’s current and future skill needs for a role, which will help you better identify qualified candidates. Use methods like skill-based hiring, behavioral interviews, and partnerships with education institutions to align curriculum with industry needs.

• Leverage technological solutions: Tools like AI-driven platforms, labor market intelligence, learning management systems, and people analytics can simplify the skill development process. Such technological solutions can continuously identify employee skill gaps, recommend tailored learning solutions, and track skill development progress in real time.

Upskill your team with Coursera

With Coursera for Business, your employees will gain access to content from 350+ leading universities and industry partners, where they can build real-world experience with innovative skills, tools, and technologies while earning globally recognized credentials. Our customizable, scalable learning solutions balance workplace and technical skills training in diverse formats, from video clips to Guided Projects and Professional Certificates.

• Success Stories: Hear from business leaders and Enterprise learners about Coursera’s impact on driving career outcomes.

• Global Skills Report: Discover the critical skills people need in today’s jobs, with insights drawn from 170M+ Coursera learners and key economic indices.

• Coursera for Teams: Training a smaller team? Explore Coursera for Teams, designed to meet the needs of teams with five to 125 employees.

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