Sounding the Alarm on Talent Gaps

Workday's Global State of Skills report reveals business leaders' growing concern about impending talent shortages. Rapid technological advancements and shifting workforce dynamics have caused more than half of leaders to be "somewhat or very concerned" about a skills shortage in the near future, the report notes. Only one-third of respondents strongly believe their current workforce possesses the skills needed for future success.

The global study surveyed 2,300 business leaders in 22 countries in director-level positions or higher from organizations employing at least 100 people.

The report highlights the significant challenge of the lack of visibility into existing skills within companies; only 54 percent of leaders have a clear view of their employees' capabilities. Such obscurity hampers effective talent development and strategic planning. The research also emphasizes a widening gap in digital competencies, noting that while 60 percent of current roles require digital skills, that demand will rise to 65 percent in the future.

Broader economic implications underscore the urgency for employers to address skills gaps. A 2024 International Data Corporation study, Enterprise Resilience: IT Skilling Strategies, estimates that IT talent shortages could cost organizations $5.5 trillion by 2026. The damage stems from product delays, loss of business, and the inability to compete. Skills gaps in IT operations, cloud architecture, data management, and software development have triggered digital transformation delays of up to 10 months for nearly two-thirds of companies.

Moreover, artificial intelligence and automation are reshaping skill requirements. Employers are increasingly seeking employees with AI-related skills, notes the Global State of Skills, to stay competitive. Therefore, job applicants and companies must focus on developing both technical and soft skills, including adaptability and problem solving.

For TD professionals, Workday's findings highlight a critical need for proactive upskilling and reskilling initiatives. For instance, a 2025 Financial Times article, "Is the UK Failing Its Graduates?" reveals that despite 77 percent of UK workers expressing a willingness to learn new skills or retrain, only 34 percent believe their organization offers skills development opportunities.

Adopting a skills-based approach to talent management is gaining traction, with more than half of businesses worldwide transitioning to the model and an additional one-quarter having plans to start in 2025. Such strategies prioritize individual capabilities over traditional credentials, enabling more agile hiring and development processes.