Many companies are complaining about talent shortages, which means it's time for alternative ways to combat this issue by focusing more on skills-based hiring, permitting flexible work options such as hybrid and remote schedules, and looking towards existing staff capable of upscaling to another level.
While unemployment is a growing concern among Americans, 46% of employers report that finding qualified candidates is their main challenge, according to Jobscore. Many experienced and highly qualified people have been laid off, while other hidden talent can't even get an interview, thanks to being pre-screened out by AI. By only sticking to traditional methods of acquiring new talent and misusing technology, many companies can expect open roles to remain so for a long time.
What Are the Main Causes for Talent Shortages?
The cause for the gap between talent acquisition and the workers available to work is complex. An aging workforce, issues with AI screening, location, and a greater need for a balanced life have all affected what companies consider talent and how they can get it.
Aging Boomers
Modern talent acquisition has taken a hit as an aging workforce is retiring in large numbers. This transition is leaving a huge gap in unmet skill sets, particularly among the trades.
Rapid AI Adoption
The rapid advancement and adoption of AI have made it hard for the current workforce to keep up, which creates an even larger skills gap as opposed to an actual worker shortage. AI has also affected talent acquisition as it's often used to prescreen candidates on job applications. Therefore, lots of hidden talent aren't given a chance to prove themselves because they didn't use the right buzzword on a résumé or cover letter.
Need for Flexibility
The pandemic created lingering shifts in what many people look for in a job. Those two years of working at home allowed more people to adjust their priorities and understand the meaning of a work-life balance.
People who never worked remotely before got to see the possibilities that come with a remote or hybrid lifestyle. Therefore, more people are simply unwilling to put up with office politics, long commutes, and reduced benefits to work in person.
Location
Location also matters, as there may be an overabundant surplus of talent in one area and an extreme lack in another. For example, talent often clusters around specific industry hubs, such as San Francisco and Seattle for tech, Los Angeles for acting, or New York for fashion, leaving other areas sparse.
Cost of living also matters, as high rents can make it hard for talent to move to an area to be found unless they already have a job in place. Areas that don't have the proper transportation infrastructure can further make it harder for those to commute to other areas or be available for various shifts.
Why Companies Should Consider Reskilling Options
Effective talent management isn't about just bringing in new blood, but helping existing employees reach their potential and beyond. Allowing people to upskill can:
- Improve retention
- Fill skill gaps
- Save on recruiting expenses
- Increase innovation
Assessing current employee abilities against future needs can be more cost-effective and less time-consuming than doing months of interviews and screenings for people who may only possess a few of those capabilities. Plus, when employees have greater development opportunities, there's a greater chance they'll stay at a company longer.
How Can Companies Diversify Talent Pools?
Companies that allow more flexibility with their staff won't miss out on talent living in a different city, state, or country. Without the need to have everyone in one location, they can also save on company overhead by reducing the need for expensive commercial property and related utilities. Whether bringing on remote domestic talent or hiring overseas, companies can ensure they remain in compliance with Contractor of Record (COR) services.
Don't forget to expand your recruitment channels to include:
- Universities and Community colleges
- Job boards that target underrepresented groups
- Career fairs
- Alumni groups
- Trade journals
- Industry events
- Social media
As you bring on more diverse staff, you can have an employee referral program that further taps into a varied workforce. Build partnerships with professional groups like the National Society of Black Engineers and community organizations.
What Can Businesses Learn from the Trades?
From plumbers to electricians, those who work in the trades utilize practical hands-on skills that are relevant to a particular industry. Any business can take on this lesson to manage talent shortages by emphasizing mentorship and apprenticeships that let younger employees learn from more experienced workers before they retire.
Additionally, the trades involve:
- Diagnosing and fixing problems on the spot
- Mastering technical skills for industry-specific tasks
- Explaining technical repairs clearly to customers
- Attention to detail
- Teamwork and individual accountability
Frequently Asked Questions
Why Is Gen Z Struggling to Get Jobs?
The job market is tough, and as CNBC reported in 2025, many graduates from last year are still trying to find jobs that match their actual skill set. Hiring has been down for most of the past year, and people who have jobs are clinging to them.
Over 2 million people graduated with bachelor's degrees in the spring of 2025, and only 30% of them reported finding a full-time job in their field, according to a Cengage group survey. Additionally, many businesses overhired in the post-pandemic years between 2021 and 2022, with higher salaries to compete for more talent. As people have not moved on from those positions, companies are not opening up to fill more jobs.
Which Skill Is in High Demand Now?
Those who want marketable, in-demand skills may want to focus on:
- Artificial intelligence and generative AI
- Development operations and cloud computing
- Cyber security
- Data analytics
- UX design
- Digital marketing
Businesses Need a New Talent Approach
With businesses complaining about talent shortages and skilled workers still trying to find compatible jobs, more companies must change their approach to meet somewhere in the middle. After all, there's talent out there, and much of it is already at these companies.
By adjusting their talent-seeking approach, such as applying more flexibility, offering benefits like mentorship, and diversifying recruiting strategies, companies may begin to fill those gaps sooner rather than later.
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