There is a looming threat to your business. No, not a bad Glassdoor review. It’s the dreaded skills gap! This employer issue is a much larger problem than you might think, and unless your business is an Influencer factory, there is a good chance that you will be affected by the skills gap in the very near future.
In fact, you might already be feeling it now. Deloitte found that “labor and skills shortages” was a top factor affecting businesses. McKinsey found that 43% of executives and managers are seeing a skills gap problem at this very moment, and another 44% see it coming within five years.
What is the Skills Gap Problem?
For such a hefty employment issue, the concept of the skills gap is an easy one to grasp: businesses simply cannot find or hire enough qualified workers to fill open positions.
Because of the lack of skilled workers, businesses see slower growth even as wages skyrocket (in order to retain talent). Some businesses may even be forced to shrink or shut down altogether due to the lack of people who have the ability to do certain specialized jobs.
Industries that are affected by the skills gap tend to lean tech and engineering: cybersecurity, data analytics, supply chain, robotics, and advanced manufacturing are just some of the afflicted.
But many traditional sectors are seeing a lack of qualified hires as well: construction, nursing, teaching, marketing, and finance. Even the army is facing the most dire recruiting situation in 50 years.
What’s Causing these Skill Gaps?
It might be easier to ask what isn’t causing a skills gap.
- Baby Boomers are retiring en masse and taking their skills with them.
- The pace of tech requires new and specialized skills constantly.
- Every industry needs skilled tech workers and colleges can’t keep up with demand.
- Colleges aren’t even teaching the right skills in many cases.
- Big brands are taking all the qualified candidates, leaving few for SMBs.
- The pandemic sparked the Great Resignation for quality-of-life reasons.
- Gen Z is wary of corporate jobs.
- 4-year colleges have seen a steep decline in enrollments.
- Hiring managers can’t figure out how to hire Gen Z at all.
All these reasons contribute to a skills gap problem that threatens to cost the global economy $8.5 trillion by 2030. The United States alone is projected to lose $1.75 trillion of that total amount.
Of course many of these reasons are external factors. What’s also contributing to the skills gap is the lack of internal change and proactive initiatives to address the talent shortage. Like many difficult business problems, business leaders have a tendency to kick the can on the hiring gap. Yet the longer they wait to address the issue, the larger the gap becomes.
In fact, it took a global pandemic for managers and executives to “wake up” to the dire need for skill building. According to McKinsey, 69% of respondents said they saw an increase in skill building after 2019.
And while helping current employees build new skills (reskilling) is important, employers should also be building a pipeline of young talent that can be molded into the effective workers needed. In other words, while you are reskilling, don’t forget skilling in the first place.
Why Internships Help Close the Skills Gap
The World Economic Forum estimates that the cost to reskill a single employee averages $24,000. While that’s a fair price to pay for more skilled employees, that is also 2-3X the cost of a paid intern. And since you’re forced to train someone in a new skill regardless, having a pipeline of interns to train for necessary roles can be an extremely cost-effective way to start closing the skills gap.
Internships are the best way to teach the most relevant skills that your specific company needs from young talent, and one of the most cost-efficient ways to maintain a talent pipeline that can serve your hiring needs for years to come. According to the National Association of Colleges and Employers, the conversion rate for the class of 2020 interns was over 66%, showing that investing in internships lead to qualified entry-level employees the majority of the time.
Training interns also have the added benefit of hiring Gen Z workers, who will be the future of our workforce, who bring inherent knowledge of how to attract both Gen Z hires and Gen Z consumers. This is key to your business staying relevant for the next decade, and being a known brand that’s friendly to young professionals which will continue to make your hiring process easier in the future.
How to Use Interns to Help Close the Skills Gap
Of course, all this takes intention when hiring interns and planning their responsibilities. Gone are the days of using interns for cheap, repetitive labor. Instead, your business should approach internships as a bootcamp to mold eager young workers into talented professionals that are already loyal to your brand.
Start by making your intentions clear by putting your money where your mouth is. Paying interns allows for more serious applicants, more diverse applicants, and an inherent contract to perform and learn on the job. Furthermore, more and more companies are offering Pre-Placement Offers (PPOs) for interns about to graduate. By explicitly saying that you offer PPOs for interns who perform, you can start securing that talent pipeline.
Map out the skills that are lacking at your company and attack that gap with willing interns. Give them the best chance to succeed with a thoughtful training program and great mentors who check in with them often. Also, make sure that the onboarding process is positive, as well as the perks, to keep interns engaged and happy.
Finally, celebrate their successes. Your interns shouldn’t feel like they’re just plugging a skills gap for your company; just another cog in the wheel. They have the potential to be future leaders, so make them feel a part of your culture by announcing successful projects they were a part of, or just providing positive feedback when they learn new skills. This will help endear these young professionals to your company and become quality workers in the near future.
Are you an employer looking to hire interns to help close your skills gap? PathMatch helps companies build talent pipelines for employers and helps students connect to modern careers. Click here to start accessing our nationwide network of interns and recent grads today and to learn more about how PathMatch connects with students early in their journey to help them learn about relevant careers and companies.