Lowering the Talent Bar: 78% of Organizations Forced to Modify Job Requirements Due to Lack of Skills

Betterworks’ original research uncovers the critical need for strategic upskilling and verifiable skills data in today’s talent landscape.

Betterworks, the leading performance management software company, announced compelling new survey results revealing that while many organizations are taking steps to assess and develop employee skills, the talent shortage persists and jeopardizes the ability of organizations to execute 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 US, confirms that 8 in 10 organizations have lowered hiring standards because they cannot find candidates with the right skills.

“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”

Companies are challenged to find both best-fit outside candidates and identify and cultivate existing talent. 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. Without the right skills in their workforce, companies are unable to transform to keep pace with change, let alone innovate to stay ahead.

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“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.

“To truly capitalize on their workforce’s potential, companies must focus on enabling managers to verify employees’ skills with up-to-date data and use individualized employee skilling plans to connect the skills needed to ones under development,” Dennerline added. “AI-assisted skill identification and validation 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, Betterworks Chief Product and Technology Officer. ”By embracing continuous performance management and integrating AI to capture insights from reviews, feedback, and goals data, businesses can keep skills data up-to-date and empower managers to drive employee development and performance with accuracy.”

Key findings 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:

• 98% 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 use performance evaluations for measuring skills and competencies; but over half are doing those assessments only 1-2x per year
• 74% believe adding verified skills data into performance processes could improve internal mobility.
• 1 in 3 employees receive occasional or no manager guidance for skills development.
• No.1 barrier to skill development is lack of time: 44% 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.

A skills-based approach that is 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. While companies invest heavily in recruiting and talent management processes, the foundation remains weak without up-to-date, accurate, and verifiable skills data.

This data is essential for internal skill-building efforts. By effectively integrating talent development data with learning and development initiatives, organizations can reveal hidden skills, strengthen their internal talent pipeline, and more efficiently achieve their strategic goals.

To address skills data gaps and verifiability, Betterworks will soon launch its Talent Profiles for employee skills tracking and development. Talent Profiles will leverage AI technology to extract skills data from performance reviews, peer feedback, goals, and HRIS or talent marketplaces to create a verifiable skills inventory, providing companies with transparency into the skills they have and those under development.

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