Skills & talent shortages hinder business transformation

Skills and talent gaps have emerged as critical obstacles to business transformation. As organizations strive to modernize operations, adopt new technologies and enhance their customer experiences, they often find that their workforce lacks the necessary expertise to execute changes effectively.

An inability to meet evolving skills demands is slowing down progress across industries and creating new pressures for organizations and workers. What’s more, data suggests that most of the global workforce will need reskilling within the next five years. Put simply, talent and skills shortages are reshaping the global workforce, transforming industries and careers globally.

Skill gaps are the biggest barrier to business transformation

The World Economic Forum (WEF) recently published the Future of Jobs Report, compiling the findings of an extensive survey of more than global employers. Skill gaps were cited as the biggest barrier to business transformation by respondents, with 63 percent of employers identifying them as a major barrier over the 2025-2030 period. Accordingly, 85 percent of employers surveyed plan to prioritize upskilling their workforce, with 70 percent of employers expecting to hire staff with new skills, 40 percent planning to reduce staff as their skills become less relevant and 50 percent planning to transition staff from declining to growing roles.

AI and big data top list of fastest-growing skills

Analytical thinking is the most sought-after core skill among employers, with 70 percent of survey respondents considering it as essential in 2025. This is followed by resilience, flexibility and agility, along with leadership and social influence.

Artificial intelligence (AI) and big data topped the list of fastest-growing skills, followed closely by networks and cyber security as well as technology literacy. Complementing these technology-related skills, creative thinking, resilience, flexibility and agility, along with curiosity and lifelong learning, are also expected to continue to rise in importance over the 2025-2030 period. In contrast, manual dexterity, endurance and precision stand out with notable net declines in skills demand, with 24 percent of respondents foreseeing a decrease in their importance

Experts weigh in on global skills shortages

The biggest challenge in business transformation right now isn’t technology – it’s the inability to close critical skill gaps fast enough, says Kaveh Vahdat, founder and president at RiseOpp. “Companies are over-relying on AI and automation to compensate for missing expertise, but in reality, these technologies are exposing workforce deficiencies rather than solving them.”

Businesses still need employees who understand AI strategy, automation oversight and data-driven decision-making – skills that aren’t widespread, he adds. “Without prioritizing upskilling, transformation efforts will continue to stall because AI can’t fix what leaders don’t understand, at least not yet.”

For any large organization, the ability to rapidly and continuously transform and change is increasingly the most crucial competitive advantage and the most important deciding factor for whether a business is successful or becomes obsolete, says Andrea Schnepf, managing director at nepf LLC. “Finding talent with the skills to readily transform and enable change is becoming a significant challenge and a gap that leaders must address.”

Successful business transformation and readiness to adopt change requires three core components:

1. Leaders who can effectively sponsor and lead change: Strong leadership is at the core of any successful business transformation. Leaders must set the vision, communicate the purpose and actively champion the transformation and its goals.
2. A resilient workforce that can adapt and adopt: Employees must be equipped with the mindset, skills and support to navigate transformation and change effectively.
3. The organizational capability to manage transformation and change: A strong transformation and change capability means having systems, processes and a culture that enables change to be successfully managed and sustained over time.

A gap in any of those three components will have a significant negative impact on any attempted business transformation, Schnepf warns.

Watch Lisa Williams, global operations talent strategy and employee experience director at Dow, discuss the move to a skills-first workforce

Are skills gaps really what they seem?

What’s often perceived as a talent or skills gap in business transformations is, in reality, a breakdown in information sharing across departments – combined with technology that doesn’t truly support how people work, according to Amanda Russo, founder and CEO at Cornerstone Paradigm Consulting. “The most likely scenario is stakeholders purchased software without engaging the right people partnered with not mapping out or fully understanding their processes.”

Too often, organizations assume employees lack the necessary skills when the real issue is that they’re operating in silos, without access to the right data, insights or tools to make informed decisions. “When teams don’t have a clear line of sight into how their work connects with broader business objectives, inefficiencies emerge and transformation efforts stall.”

Furthermore, each department is under the impression that they wear the weight of the world on their shoulders. There is usually an imbalance of work distribution and compartmentalized data. “On top of that, outdated or misaligned technology forces employees to work harder, not smarter,” Russo says. Instead of enabling them to focus on high-value tasks, they’re stuck navigating clunky systems, duplicating efforts or relying on workarounds. Shadow IT also plays a major role in this misalignment. “This shows up front facing as frustration, disengagement and the false perception of a skills shortage.”

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Addressing skills and talent shortages

A major cause of current skills shortages are rigid, outdated hiring processes. Many companies still rely on strategies that aren’t built for today’s global, remote-first workforce, while others continue to search for ‘perfect-fit’ candidates instead of building talent internally. 

Look beyond local hiring. The best talent isn’t always in your city – global remote teams can close skill gaps faster,” says Damien Filiatrault, founder and CEO at Scalable Path. “Instead of only hiring for gaps, companies should invest in upskilling, training existing employees in high-demand areas.” Also, in technology, the best candidates don’t wait three months for approvals. Companies need faster, more flexible hiring processes.”

The companies that solve this talent gap first by investing in internal AI training, rethinking hiring based on adaptability and embedding learning into their transformation strategy will outperform competitors who are still waiting for the ‘right’ talent to appear, adds Vahdat.

The real solution isn’t just upskilling though – it’s breaking down silos first, says Russo. “Ensure seamless cross-functional collaboration by process mapping the current state and implementing technology that enhances efficiency rather than adding complexity. Organizations that are willing to do the hard work first will see that their people aren’t the problem in most cases – their systems and structures are!”

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