Skills Shortages Insights & Research
Explore the latest research on global skills shortages, why they persist, and how organisations are responding through workforce capability, internal mobility and workforce readiness.
What is a Skills Shortage?
A skills shortage occurs when employers are unable to find enough people with the knowledge, skills, qualifications or experience needed to perform specific roles. As a result, organisations may struggle to fill vacancies, experience longer recruitment times, increase recruitment costs, or delay business growth.
Skills shortages can affect individual occupations, industries or entire regions. They are driven by a combination of factors including technological change, demographic shifts, changing workforce expectations, and evolving business requirements.
According to the World Economic Forum’s latest Future of Jobs Report, skills gaps remain the single biggest barrier to business transformation, with 63% of employers identifying them as a major challenge. In response, 85% of employers plan to prioritise workforce upskilling, while many also expect to hire people with new skills, redeploy existing employees, and redesign roles as workforce requirements continue to evolve.
The report also estimates that 59% of the global workforce will require training by 2030. Of these workers, 29% are expected to need upskilling within their current roles, 19% will require reskilling to move into different roles, and 11% may be unlikely to receive the training needed. At the same time, employers expect 39% of workers’ core skills to change by 2030, reinforcing the need for continuous workforce capability development.
The latest Randstad Global In-Demand Skills Dashboard also highlights continued demand across technical, digital and operational capability areas, demonstrating that skills shortages remain a global challenge rather than a temporary labour market issue, including;
- AI & Automation
- Cloud & Infrastructure
- Data & Analytics
- Software Development & Project Delivery
- Risk, Audit & Compliance
- Customer Experience & Services
- Engineering, Maintenance & Technical Operations
- Finance & Accounting
- Marketing, Content & Digital Communications
While organisations cannot control external labour market conditions, they can strengthen their ability to respond. Improving visibility into existing workforce capability, identifying critical capability gaps, supporting internal mobility and investing in targeted development all help organisations build greater workforce resilience in the face of ongoing skills shortages.
4 types of skills shortages
High Demand
There is a high demand for certain skills, but not enough qualified individuals to meet that demand. This situation is found in rapidly evolving industries or in fields where technology advancements have outpaced the availability of skilled workers.
Over qualified candidates
Candidates possess qualifications, experience or capabilities well above the requirements of the role. While they may fill vacancies, they often seek higher remuneration and may present a greater retention risk if more suitable opportunities become available. Overqualification is more common during economic downturns or in regions with limited employment opportunities.
Under qualified candidates
Candidates lack the knowledge, skills, qualifications or experience required for the role. This may result from limited access to education and training, or from a mismatch between workforce development and changing industry requirements.
Skills Mismatch
Candidates possess skills and experience, but these no longer align with employer demand. Skills mismatches often occur as industries adopt new technologies, occupations evolve or sectors decline, requiring workers to develop new capabilities or transition into different roles.
In practice, organisations often experience more than one type of skills shortage at the same time. For example, an organisation may struggle to recruit people with high-demand technical skills while also receiving applications from candidates who are either underqualified or whose skills no longer match current workforce requirements.
Main Causes of Skills Shortages
Technology, AI and Changing Work
Advances in AI, automation and digital technologies are reshaping many occupations. Some tasks are becoming automated while new roles and responsibilities are emerging. Demand is increasing for technical expertise as well as human capabilities such as critical thinking, judgement, adaptability and collaboration. Organisations must continually update workforce capability requirements as work evolves.
Education and Workforce Readiness
One of the more uncomfortable realities behind today’s skills shortages is that education alone is no longer enough. In many sectors, employers report that graduates arrive with qualifications but require significant additional development before they are ready to perform effectively in the workplace. As technology continues to evolve, education systems struggle to update curricula at the same pace, increasing the responsibility placed on employers to develop workforce capability.
Global competition
Many organisations now compete in a global labour market. Remote working, international recruitment and improved workforce mobility mean highly skilled professionals can often choose between employers, regions and even countries.
Healthcare, engineering, technology and education continue to experience intense international competition for experienced workers. Countries and organisations unable to offer competitive remuneration, career opportunities or quality of life may experience an ongoing “brain drain”, making local skills shortages even more difficult to address.
Regional Labour Markets
Skills shortages are rarely distributed evenly. Urban centres often attract larger numbers of skilled workers and businesses, while specialist industry hubs create strong demand for particular capabilities.
In contrast, rural and regional areas frequently face smaller labour pools, fewer training opportunities and greater recruitment challenges. Even where suitable candidates exist nationally, organisations may struggle to attract them to particular locations.
Demographic Change
Many developed countries are experiencing an ageing workforce alongside declining birth rates. As experienced employees retire, organisations risk losing valuable technical knowledge, operational expertise and leadership capability faster than they can replace it.
While automation and AI may reduce demand for some tasks, demographic change means many organisations will continue to face shortages in skilled and experienced workers for years to come.
Government policies
Government policy can significantly influence workforce capability and labour supply. Immigration settings, education funding, vocational training, recognition of overseas qualifications and incentives for regional employment all affect the availability of skilled workers.
Governments also play an important role in supporting workforce transition as industries evolve. Investment in reskilling, lifelong learning and workforce participation will be increasingly important as technology continues to reshape employment.
Organisational Capability Development
Not all skills shortages are created by external labour market conditions. In many organisations, capability gaps are made worse by limited workforce planning, poor visibility into existing workforce capability, insufficient investment in development and a lack of structured career pathways.
Organisations that understand the capability they already have are often better placed to respond to skills shortages. By improving workforce visibility, supporting internal mobility, accelerating targeted development and building workforce readiness, they can reduce reliance on external recruitment and strengthen organisational resilience.
Impact of Skills Shortages for Organizations
Persistent skills shortages can have significant operational and financial consequences beyond simply making recruitment more difficult.
Common impacts include:
- Higher labour costs as organisations compete for scarce talent through increased salaries, incentives and recruitment expenditure.
- Delayed projects and reduced productivity due to unfilled vacancies, longer recruitment times and limited workforce capacity.
- Reduced innovation and competitiveness when organisations cannot access the skills needed to adopt new technologies, improve products or respond quickly to changing markets.
- Increased operational and compliance risk where shortages affect critical roles, leaving organisations more vulnerable to quality issues, safety incidents or regulatory non-compliance.
- Greater pressure on existing employees, increasing workloads, fatigue, burnout and staff turnover.
- Increased reliance on contractors, outsourcing or offshoring, which may provide short-term relief but can introduce additional risks relating to quality, consistency, organisational knowledge and long-term capability development.
While organisations cannot eliminate labour market pressures, those with better visibility into workforce capability are often better positioned to prioritise development, strengthen internal mobility and reduce the operational impact of ongoing skills shortages.
Global skills outlook
According to the World Economic Forum’s latest Future of Jobs Report, global labour markets continue to experience significant change as technology, demographics, environmental priorities and economic uncertainty reshape workforce requirements.
Fastest Growing Occupations
AI, Data & Digital
- AI & Machine Learning Specialists
- Big Data Specialists
- Data Engineers
- Information Security Analysts
- Software & Application Developers
- FinTech Engineers
Green Economy
- Renewable Energy Engineers
- Environmental Engineers
- Autonomous & Electric Vehicle Specialists
Frontline & Essential Services
- Healthcare professionals
- Social workers
- Personal care workers
- Construction workers
- Skilled Trades
- Agricultural workers
- Delivery & logistics workers
Fastest Declining Occupations
Administrative and clerical occupations continue to decline as automation and digitalisation replace repetitive information-processing tasks.
Examples:
- Bank tellers
- Postal clerks
- Cashiers
- Ticket clerks
- Payroll clerks
- Bookkeepers
- Administrative assistants
Employment Outlook
The latest WEF report estimates that around 170 million new jobs will be created globally by 2030 while around 92–98 million existing jobs may disappear, resulting in a substantial net increase in employment. Although many occupations will decline, new roles are expected to emerge faster than old ones disappear.
Key Capability Trends
Employers increasingly value:
- technological literacy
- AI capability
- analytical thinking
- resilience
- adaptability
- leadership
- continuous learning
However the digitalization of almost everything is creating an exponential need for highly skilled engineering and IT staff. While historically this need has been filled by Indian and East European talent these sources are now dwindling.
Skills Shortage Projections for USA
The United States continues to face significant skills shortages despite a more stable labour market. Long-term demographic change, rapid technological advancement and persistent shortages in critical occupations mean many employers continue to struggle to recruit appropriately skilled workers.
The U.S. Bureau of Labor Statistics projects employment growth of approximately 5.2 million jobs between 2024 and 2034, with healthcare and social assistance expected to experience the fastest growth, adding around 2 million jobs. Strong demand is also projected for computer, mathematical and AI-related occupations, reflecting continued investment in digital transformation and emerging technologies.
Technology-related roles remain among the most difficult to fill, particularly those involving:
- Artificial Intelligence and Machine Learning
- Data Engineering and Analytics
- Cybersecurity
- Cloud Infrastructure
- Software Development
- Systems Architecture
Healthcare continues to experience significant workforce shortages, driven by an ageing population and increasing demand for medical, mental health and aged-care services. Nursing professionals, home health workers, personal care aides and healthcare managers remain among the fastest-growing occupations.
Demand for skilled trades is also increasing. Recent Randstad USA research suggests demand for
skilled trade workers is growing substantially faster than many professional occupations as investment in manufacturing, energy infrastructure, data centres and AI-enabled facilities accelerates. Electricians, maintenance technicians, welders, mechanics and other skilled trades are increasingly recognised as essential to supporting technology-driven growth.
Many organisations are also shifting towards skills-based hiring, expanding apprenticeships and increasing employer-led learning as traditional recruitment alone is proving insufficient to address ongoing capability shortages. As AI continues to reshape work, organisations are placing greater emphasis on adaptability, continuous learning and demonstrable workforce capability alongside formal qualifications.
An American Action Forum report has suggested the skill shortage for jobs requiring a college degree may reach close to 9 million over the next decade with a further three quarters of a million short for jobs requiring at least some college education. This is approaching 6% of a workforce declining due to aging, lower work participation rates and slower population growth.
Skills Shortages in the UK
The ManpowerGroup UK Talent Shortage Survey 2025 found that 76% of employers continued to experience difficulty filling vacancies due to a lack of skilled talent. While this represented a slight improvement from 80% in 2024, skills shortages remain widespread across the UK economy.
The most difficult capabilities to recruit continue to be in:
- Information Technology and Data
- Engineering
- Logistics and Supply Chain
- Healthcare
- Skilled Trades
Like many developed economies, the UK faces the combined impact of an ageing workforce, rapid technological change and increasing demand for digital, technical and healthcare capability.
As a result, many UK organisations are placing greater emphasis on workforce planning, internal mobility, upskilling and capability development to reduce reliance on an increasingly competitive external labour market.
Skills shortages in Australia and New Zealand
Despite some easing in labour market conditions, skills shortages remain a significant challenge across Australia and New Zealand.
Jobs and Skills Australia reports that 36% of assessed occupations remain in national shortage, with persistent shortages across healthcare, education, construction, engineering and many skilled trades. Healthcare, aged care, teaching, electricians, drivers and childcare workers continue to experience particularly strong demand.
The Hays 2025 Skills Report also found that skills shortages continue to affect organisations across Australia and New Zealand despite a moderation in overall employment growth. Employers identified ongoing shortages in accountancy and finance, human resources, procurement and logistics, information technology, engineering and healthcare.
Long-term demographic change, infrastructure investment, digital transformation and an ageing workforce continue to drive demand for skilled workers.
While it is commonly thought that skills shortages are mainly in technical roles, in fact 74% of businesses reported they are affected by low literacy and numeracy skills. They reported managers and professionals as having the greatest development needs in generic skills.
In 2025 the Industries most affected by skills shortages continue to be Mining and Construction, affected by shortages of skilled trades, technicians and operators, Healthcare across most roles and in ICT those roles focused on data and cybersecurity.
Overall shortages of experienced tradespeople, healthcare professionals and technology specialists are increasing the importance of workforce planning, capability development and internal mobility across both countries.
Skills shortages in Asia
Asia presents one of the world’s most diverse labour markets. While many countries have large working-age populations, skills shortages continue to affect both emerging and developed economies for different reasons.
Research from the Workforce Analytics Institute WAI, together with more recent workforce studies, highlights that many emerging Asian economies continue to experience shortages of skilled labour despite relatively young populations. A key challenge is ensuring education and vocational training systems keep pace with rapidly changing industry requirements, particularly in digital technology, advanced manufacturing and engineering.
In contrast, developed economies such as Singapore, Japan and South Korea generally have highly skilled workforces but face increasing pressure from ageing populations and declining birth rates. These demographic trends are reducing labour supply while increasing demand for healthcare, technology and specialist professional skills.
China continues to experience the combined impact of an ageing workforce, slowing population growth and rapid digital transformation. Demand remains particularly strong for AI, data, cybersecurity and advanced manufacturing capability, while many employers report increasing difficulty finding experienced technical professionals.
India has one of the world’s youngest workforces and remains a major source of global technology talent. Rapid growth in AI, software engineering, cloud computing and cybersecurity continues to drive strong demand for highly skilled professionals. At the same time, many employers report shortages of experienced workers, reflecting the challenge of developing advanced capability at the same pace as economic growth.
Across Southeast Asia, countries such as Indonesia, Vietnam, Malaysia and the Philippines continue to invest heavily in workforce development to support expanding manufacturing, technology and digital services sectors. While technical capability is improving, employers increasingly report a need for stronger leadership, communication, problem-solving and other human capabilities alongside technical expertise.
Across the region, geopolitical uncertainty, supply chain realignment, digital transformation and AI adoption continue to reshape workforce capability requirements. Organisations are placing greater emphasis on continuous learning, workforce agility and capability development to remain competitive in rapidly changing markets.
Core Skills for 2026 and Beyond
According to the World Economic Forum’s latest Future of Jobs Report, analytical thinking remains the most important workforce capability identified by employers. As AI and automation take over more routine work, organisations increasingly value human capabilities that complement technology rather than compete with it. Technology is becoming an essential tool, but human capability remains the key differentiator.
1. Analytical skills
Analytical thinking remains the most highly valued workplace skill. As organisations face increasing complexity, employees need to evaluate information critically, identify patterns, understand cause-and-effect relationships and make sound decisions based on evidence rather than assumptions. AI can support analysis, but human judgement remains essential for interpreting results and making decisions in context.
2. Resilience, Flexibility and Agility
Rapid technological, economic and organisational change means employees must continually adapt to new systems, processes and ways of working. Resilience helps people respond positively to change, while flexibility and agility enable them to learn quickly, solve unfamiliar problems and remain effective in changing environments. Of critical importance is the ability and openness to learning new skills, to taking on new roles.
3. Leadership & Social Influence
Leadership is no longer confined to management roles. Organisations increasingly value people who can influence others positively, build trust, collaborate across teams and guide change. Strong interpersonal skills help create engagement, encourage knowledge sharing and improve communication and organisational performance.
4. Creative Thinking
As routine tasks become increasingly automated, creativity becomes a key competitive advantage. Organisations need employees who can solve complex problems by analysing root causes, thinking creatively (outside the usual boundaries) to generate new ideas, challenge assumptions, identify opportunities and develop innovative solutions to complex problems.
5. Motivation & Self Awareness
Employees who understand their strengths, remain motivated and take responsibility for their own development are more productive and better able to adapt to changing workplace requirements. Self-awareness also supports resilience, continuous improvement and more effective collaboration with others.
6. Technological Literacy
Technology is now part of almost every occupation. Employees need confidence in using digital tools, understanding data and working effectively with AI-enabled technologies. Technological literacy is becoming a core workplace capability rather than a specialist IT skill.
7. Empathy and Active Listening
As technology handles more routine interactions, human relationships become increasingly important. Empathy and active listening improve teamwork, customer service, leadership and problem-solving by helping people understand different perspectives and build stronger working relationships.
8. Curiosity and Lifelong Learning
The ability to learn continuously is becoming one of the strongest predictors of long-term employability. Curious employees seek new knowledge, adapt more readily to change and are better equipped to develop the capabilities required for future roles.
9. Talent Management
Developing people has become a strategic capability for organisations. Managers who can identify potential, coach employees, support development and build future capability help create stronger, more resilient workforces.
10. Service Orientation and Customer Service
Providing excellent service requires more than responding to customer requests. It involves understanding customer needs, communicating effectively, solving problems and building lasting relationships. As products and services become increasingly similar, customer experience is becoming an important competitive differentiator.
How AI Is Changing Skill Requirements
Generative AI is reshaping many workplace tasks, particularly those involving information processing, content creation and routine analysis. Rather than replacing entire occupations, AI is changing the balance between the work performed by people and the work that can be assisted or automated by technology.
Tasks that AI can often perform effectively include:
- Drafting and summarising written content
- Language translation
- Basic software development and code generation
- Data analysis and pattern recognition
- Marketing content creation
- Administrative and documentation tasks
- Research and information retrieval
However, AI is generally less effective where work depends on human judgement, contextual understanding, creativity, ethical decision-making, leadership or interpersonal relationships. These capabilities become increasingly important as organisations adopt AI more widely.
As routine tasks become automated, the value of uniquely human skills—including analytical thinking, creative problem-solving, adaptability, communication and leadership—is expected to continue growing. Organisations therefore need to develop both technological capability and the human skills required to apply AI effectively and make informed decisions.
Responding to Skills Shortages
Improve Workforce Visibility
Understand the knowledge, skills and capabilities already available within the organisation. Better workforce visibility helps identify hidden capability, critical gaps and opportunities for redeployment before recruiting externally.
Invest in Continuous Learning
As workforce requirements continue to evolve, learning must become an ongoing process rather than a one-off event. Development should focus on building both technical skills and the human capabilities that enable employees to adapt and grow.
Strengthen Internal Mobility
Creating career pathways, cross-training employees and supporting internal movement between roles can reduce reliance on external recruitment while improving employee engagement and retention.
Skills Based Hiring
Many organisations are broadening recruitment criteria to focus more on demonstrated skills and capability rather than qualifications alone. Skills-based hiring can expand the available talent pool and improve access to candidates with transferable capabilities. However, it works best when combined with structured assessment, ongoing development and clear capability requirements.
Prioritise Critical Capability Areas
Not every capability carries the same level of organisational risk. Identifying business-critical roles and prioritising development where shortages have the greatest operational impact helps organisations use development resources more effectively.
Support Managers
Training completion alone does not demonstrate workforce capability. Organisations increasingly need confidence that employees can apply their knowledge effectively, supported by appropriate assessment, evidence and ongoing development.
Build Workforce Readiness
Managers play a key role in identifying development needs, coaching employees and planning future workforce capability. Providing managers with better information and tools helps improve workforce planning and more targeted development decisions.
Support Employee Wellbeing
The World Economic Forum’s latest Future of Jobs Report found that supporting employee health and wellbeing is now one of the most common strategies organisations plan to use to improve talent availability. Flexible working arrangements, hybrid work and policies that support employees with caring responsibilities can improve workforce participation and help organisations retain experienced staff who might otherwise leave the workforce.
Integrate Workforce Capability Management
Rather than managing recruitment, learning, assessments and workforce planning separately, many organisations are taking a more integrated approach to workforce capability management. Bringing together capability requirements, assessments, development activities, evidence and workforce readiness provides better visibility into organisational capability, supports more informed workforce decisions and helps organisations respond more effectively to ongoing skills shortages.
Conclusion
Skills shortages are likely to remain a defining workforce challenge throughout the remainder of the decade. While organisations cannot control external labour market conditions, they can strengthen their resilience by improving visibility into workforce capability, investing in targeted development and creating opportunities for employees to learn, adapt and grow. Those organisations that develop their existing workforce as strategically as they recruit new talent will be best positioned to respond to future workforce challenges.
FAQs
What is a skills shortage?
A skills shortage occurs when employers cannot find enough people with the knowledge, skills, qualifications or experience needed to fill specific roles.
What causes skills shortages?
Skills shortages are typically caused by a combination of technological change, demographic shifts, changing business requirements, education and training gaps, and competition for skilled workers.
Which industries are most affected by skills shortages?
While shortages vary by country, they are most commonly reported in healthcare, engineering, construction, manufacturing, information technology, logistics, education and skilled trades.
What skills are expected to be most important in the future?
Current research consistently identifies analytical thinking, resilience, leadership, creativity, technological literacy and continuous learning as among the most important workplace skills for the remainder of the decade.
How is AI changing workforce skill requirements?
AI is automating many routine tasks while increasing demand for skills such as critical thinking, judgement, creativity, communication and technological literacy. Rather than replacing all jobs, AI is changing the mix of capabilities organisations require.
How can organisations respond to skills shortages?
Organisations can reduce the impact of skills shortages by improving workforce visibility, investing in continuous learning, supporting internal mobility, adopting skills-based hiring where appropriate, and strengthening workforce capability management.
What is the difference between a skills shortage and a skills gap?
A skills shortage refers to a lack of suitably skilled candidates in the external labour market. A skills gap exists when current employees do not yet have the capabilities required for their roles or future business needs.
Why is workforce capability important in addressing skills shortages?
Understanding workforce capability helps organisations identify existing strengths, prioritise development, support career mobility and build workforce readiness. Better visibility into workforce capability enables organisations to respond more effectively when external recruitment becomes difficult.
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