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The skills gap is becoming a bigger problem than the talent shortage

Organisations keep describing a shortage of people when what they have is a mismatch of capabilities, and the two problems have opposite solutions.

Hiring7 min read

A shortage means the people do not exist. A mismatch means they exist and are doing something else, or could do the work with support you have decided not to provide.

Most organisations describe the first and have the second, which matters because the solutions point in opposite directions. A shortage says compete harder on pay. A mismatch says build, and stop filtering out people who could do the job.

How to tell which one you have

The diagnosis is not complicated and most teams have never done it.

  • If roles stay open for months and few applicants can do the work at all, that is closer to a shortage.
  • If plenty of applicants are near-misses who would be capable within a quarter, that is a mismatch, and you are choosing not to close it.
  • If you keep hiring for capabilities your existing people could plausibly build, that is a mismatch you are paying a premium to avoid.
  • If the same gap reappears every year, it is structural, and hiring will not fix it because it never has.
The diagnosis: a genuine shortage where almost nobody can do the work, against a mismatch where plenty of near-misses would be capable within a quarter and are being filtered out instead.
One says compete harder on pay. The other says build.

Why AI widens the mismatch specifically

The capabilities in demand are changing faster than people are being developed, which is the exact definition of a widening mismatch. Roles now expect judgement earlier, AI literacy as a baseline, and the ability to work alongside tools nobody was trained for.

At the same time the usual mechanism for building those capabilities, doing routine work under correction, is being automated. So demand is moving faster and the supply mechanism is being removed at the same time.

This is why the gap will not close on its own, and why the organisations that build deliberately will have an advantage that is genuinely hard to copy quickly.

Demand for capability accelerating while the mechanism that used to supply it, routine work done under correction, is removed by automation. The two moving in opposite directions is why the gap widens.
Demand speeds up as the supply route is taken away.

What closing a mismatch actually requires

It requires knowing what your people can currently do, which is the part almost nobody has. Most organisations know job titles and completed courses, and neither is a capability.

  • Assess capability rather than record attendance. Somebody who finished a course has not demonstrated anything.
  • Make the gap specific and personal. A gap somebody can name and act on is a plan; a gap described at the company level is a slide.
  • Give the work that builds the capability, because it is the only thing that builds it. Courses prepare; practice develops.
  • Hire for trajectory in the near-miss cases, and mean it by actually providing the support.

Common questions

What is the difference between a skills gap and a talent shortage?
A shortage means the capable people do not exist in the market. A gap means they exist but their capabilities do not match what is needed, which is usually solvable by developing people you already have. Most organisations describe a shortage and have a gap.
How do you identify a skills gap?
Compare what roles now require against what people can currently demonstrate, not what they have attended. If most applicants are near-misses who would be capable within a quarter, or the same gap reappears annually, it is a mismatch rather than a shortage.
Why is the skills gap getting worse?
Because required capabilities are changing faster than people are being developed, and the usual development mechanism, doing routine work under correction, is being automated at the same time. Demand accelerates while the supply route is removed.
Is it cheaper to hire or to train?
For a genuine mismatch, developing people is almost always cheaper, because you are competing for scarce hires against everybody else with the same gap. The catch is that developing requires knowing what people can currently do, which most organisations cannot answer.

PDP Quest exists because of the problem underneath all of these: when output stops indicating capability, you need another way to know who can actually do the work.

See how verification works →