Closing The Skills Gap: How Leaders Can Tackle The Scarcity Crisis

Consider this: Three out of four employers worldwide report they can’t find the skills they need, a dramatic increase from just 36 percent a decade ago. Contributing to this crisis are the accelerating pace of technological disruption, demographic shifts like an aging workforce and declining participation rates, and a growing disconnect between education systems and workplace needs. And let’s not forget the impact of AI and automation—making many skills obsolete overnight while creating demand for new ones.

The skills scarcity crisis is no longer a looming threat—it’s here, and it’s reshaping the future of work across industries. Leaders are discovering, often too late, that the strategies of the past won’t solve the problems of today.

If this sounds overwhelming, it is. But it’s also an opportunity—one that will define the next generation of leadership. Adapting to this new reality requires bold thinking and a willingness to step outside the way things have always been done. Most of all, it requires leaders to commit to human-centered strategies and invest in people on their way to profit.

How to Take on Skills Scarcity and Close the Gap

1. Prioritize Skills Over Roles

Too many organizations are stuck chasing candidates for narrowly defined roles instead of focusing on the skills they truly need. Stop creating “unicorn jobs” that no one can fill. Instead, embrace a skills-first mindset. Define your most pressing needs and look for adaptable, high-potential candidates who can grow into roles.

Next, broaden your horizons: Alternative work arrangements like freelancers and gig workers offer specialized expertise and flexibility but are often overlooked. With freelancers contributing $1.27 trillion to the U.S. economy last year alone, ignoring this talent pool means limiting your access to the skills you need.

2. Make Continuous Learning Non-Negotiable

Skills don’t stay relevant forever—especially in a world where AI and other technologies evolve faster than education systems can keep up. McKinsey reports that 87 percent of companies expect significant skills gaps within their organizations over the next five years. Leaders must create workplaces where continuous learning isn’t just encouraged; it’s expected and planned for.

Take Schneider Electric, for example. They used AI to identify skills gaps within their workforce and matched employees with new growth opportunities. This didn’t just improve retention; it saved millions in recruiting costs and built a workforce ready for the future. The message is clear: you can’t just hire your way out of a skills crisis—you have to build your way out.

3. Embrace Technology to Augment, Not Replace

AI is shaking up every industry, but it’s not here to replace people—it’s here to enhance what they can do. Leaders must use technology to empower—not replace—their teams. This means understanding the unique strengths of both artificial and human intelligences and how they can work best together.

Take Land O’Lakes. They’re using AI to help farmers make data-driven decisions, improving efficiency without sidelining human expertise. This is the model for success: pairing cutting-edge tools with skilled workers to unlock new possibilities.

4. Redesign Work to Retain Talent and Close the Gap

The skills scarcity crisis is exposing cracks in workplace structures that no longer meet employee needs. Burnout, inflexibility, and weak development pipelines are pushing talent out and worsening the gap. 

Women highlight the urgency: They experience 32 percent more burnout than men, driving them out of leadership roles and risking decades of progress. Retaining women is an economic imperative—they’ve added $2 trillion to GDP since the 1970s.

Gen Z workers bring a different challenge: over half feel unprepared for the workplace, especially in communication and collaboration, and 37 percent won’t stay in an organization with unsupportive managers. They also bring energy, digital expertise, and a purpose- and values-driven perspective that organizations need to thrive.

The lesson is clear: workplaces must evolve. Flexible policies, mentorship, and purpose-driven work environments aren’t perks—they’re strategies for success. Leaders who prioritize these will retain top talent and close the gap.

5. Redefine Leadership

The skills scarcity crisis demands a new kind of leader—one who sees their role not as a resource manager but as a coach and enabler. Leadership today is about building trust, fostering collaboration, and creating psychological safety.

In fact, Google’s Project Aristotle found that the most successful teams aren’t defined by their skills or experience but by their culture. Teams thrive when members feel safe to take risks and voice ideas. Leaders who foster this environment and show employees they are valued by investing in their growth will unlock their potential and build a pipeline of future-ready talent.

The Bottom Line on Skills Scarcity

The skills scarcity crisis isn’t going away, but it doesn’t have to derail your organization. It’s a challenge—but also a chance to rethink outdated systems and invest in building a workforce ready for the future.

With 75 percent of employers struggling to find the skills they need, the real question is: Will you rise to the challenge and lead boldly enough to turn this crisis into an opportunity—for your business and the people who drive it forward?

This article draws from the insights in Christie Smith’s book, Essential: How Distributed Teams, Generative AI, and Global Shifts Are Creating a New Human-Powered Leadership.