In the second installment of a new monthly series on employment and worker issues, SGB Media looked at survey results from performance management software company Betterworks. The results show that while many companies have taken steps to assess and develop employee skills, the talent shortage persists and jeopardizes their ability to execute on strategic initiatives.

Skill Fitness: Powering the Skills-Based Organization with the Right Data,  which contains findings from over 1,100 HR leaders and managers in the U.S., confirms that 8-in-10 companies have lowered their hiring standards because they could not find candidates with the right skills.

“Companies are challenged to find both best-fit outside candidates and identify and cultivate existing talent,” observed Betterworks in its survey summary report. “Concurrently, technological advancements are rapidly driving demand for new skills. Demographic shifts—the wave of baby boomer retirements and the influx of Gen Z into the workforce—contribute, resulting in a ‘perfect storm’ skills shortage.”

Betterworks reported that companies need the right skills in their workforce to keep pace with change and innovate to stay ahead.

“Accurately identifying and cultivating skills is the cornerstone of a growing organization, yet our research reveals shortcomings in how well organizations assess the state of their workforce,” said Doug Dennerline, CEO of Betterworks. “Every organization wants to unlock the full potential of their people, and that starts with understanding their skills — the ones they have and are developing, and hidden and adjacent skills.”

Dennerline said that to capitalize on workforce potential, companies must enable managers to verify employee skills with up-to-date data and use individualized employee skill plans to connect needed skills to those under development. He pointed to AI-assisted skill identification and validation, which can help organizations track skills across their workforce while supporting individual skill development.

“Organizations are increasingly recognizing the importance of skills discussions in performance management, but the data often becomes outdated due to infrequent reviews,” said Cheryl Johnson, chief product and technology officer at Betterworks.” By embracing continuous performance management and integrating AI to capture insights from reviews, feedback and goal data, businesses can keep skills data up-to-date and empower managers to drive employee development and performance with accuracy.”

Betterworks noted that key findings from its survey highlight the need for cleaner, up-to-date skills data and AI-powered mechanisms to align talent development with strategic goals, ultimately uncovering hidden skills and enhancing internal talent pipelines as follows:

  • Ninety-eight percent of respondents believe verified skills data, proof of skills through digital certification or badging, assessments, tests or review of past work and accomplishments, is essential for identifying hidden talent.
  • Nearly 7-in-10 of surveyed respondents use performance evaluations to measure skills and competencies, but over half perform those assessments only once to twice yearly.
  • Seventy-four percent responded that adding verified skills data into performance processes could improve internal mobility.
  • One-third of employees receive occasional or no manager guidance for skills development.
  • The No.1 barrier to skill development is the need for more time. Forty-four percent of employees don’t have enough time to develop their skills on the job, even though “setting aside time for employee training” ranked first or second in importance by companies of nearly every size.

Betterworks is promoting the notion that a skills-based approach built on a foundation of performance data is no longer optional but essential.

“As organizations face rapid technological changes, evolving market demands, and intense competition for talent, HR leaders are increasingly aware that a robust skills-driven model is critical for long-term success,” the company said. “While companies invest heavily in recruiting and talent management processes, the foundation remains weak without up-to-date, accurate, and verifiable skills data.”

To download the survey results go here.

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See below for the first installment of SGB Media’s monthly series on employment and worker issues.

Do U.S Office Workers Really Have a Strong Preference to Work in the Office?