Insights for Organisations

Addressing the Gen Z skills gap

Graduate Recruitment Team
11.01.24

Despite being considered ‘digital natives’, Gen Z feels unprepared for the demands of their working lives, specifically in digital literacy and soft skills.

Generation Z are known as ‘digital natives’ since they have grown up in a digital age, with technological devices and the internet having been part of their daily lives from birth. Gen Z use the internet for just about anything, from doing their weekly grocery shopping to dating online. It’s estimated that Gen Z spends a whopping eight hours or more online every day!  

Although Gen Z spend a lot of time online, a recent Salesforce survey reveals that just 32% feel adequately equipped for essential workplace digital skills. For more advanced skills like coding, data encryption, cybersecurity, and AI, the numbers drop even lower. Only one-fifth of Gen Z respondents believe they have skills in coding, 18% in data encryptions and cyber security, and 7% in AI.

It is predicted that Gen Z will make up approximately 27% of the workforce by 2025, which includes anyone born between 1997 and 2009. So, addressing these skill gaps is crucial for future team success.

We’ll explore the Gen Z digital skills gap and discover how you, as a business leader, can help address it.

What’s in this article?

Executive summary

Gen Z is experiencing a significant skills gap in both technological and soft skills. While there are numerous contributing factors to these skills shortages, disruptions to education and remote working as a result of the COVID-19 pandemic had a key part to play. As a result, Gen Z workers are faced with significant employability challenges and businesses are left dealing with these skills shortages, worrying that this will continue into the future. To combat this, business leaders have a responsibility to address the Gen Z skills gap through focusing on upskilling and inclusivity, among other methods.

H2: What is Gen Z’s biggest skills gap?

There are two significant skills gaps currently being faced by Gen Z: the soft skills gap and the digital skills gap. Let’s explore both in more detail…

Gen Z’s soft skills gap

Soft skills, crucial in any workplace, include communication, negotiation, leadership, public speaking, and conflict resolution. Gen Z, shaped by instant messaging and social media, may find traditional office communication less familiar. This gap in soft skills became more pronounced when transitioning from remote to in-person work. Remote work provides flexibility and a layer of autonomy over your time. However, starting a career in a remote setting without previous office experience may pose challenges adapting to a less flexible in-person environment.

The ‘digital native’ generation with a digital skills gap

Business leaders often assume that Generation Z has better digital skills, given their digital upbringing. However, one study challenges this belief, revealing that only 62% of Gen Z believe they possess the basic skills employers need, and merely 18% are confident in advanced digital skills. Basic skills include digital literacy, internet use, email, and office software, while advanced skills involve programming, data analysis, web development, cyber security, and project management.

This discrepancy in perception is mirrored among employers, with less than half (48%) confident in young people’s advanced digital skills upon leaving full-time education. The question arises: Why is Gen Z in this situation, and what impact might it have on the future workforce?

What are the key factors impacting Gen Z’s skills gap?

Gen Z’s digital skills gap is a result of both disrupted education and remote working caused by the COVID-19 pandemic. According to Gartner, 46% of Gen Z employees say the pandemic has hindered their educational or career goals, and 51% say their education has not prepared them for the workforce.

Millions of students experienced prolonged academic interruptions due to school and university closures. For many of Gen Z who are now part of the workforce, the years of lockdown coincided with their final years of university, which were forced to be completed remotely through online learning with minimal instructional time and in-person sessions.

The sudden shift to online learning also exposed gaps in digital literacy and proficiency among young individuals, with disparities in access to reliable internet, suitable devices, and the ability to navigate digital platforms. Thus, the very generation assumed to be adept in digital skills finds itself facing a digital divide, further widening educational inequalities.

This disadvantage extended to the workplace. Much of Gen Z began their working lives remotely. While there are many benefits to working from home, it does not come without its shortcomings, especially when it comes to acquiring new skills in comparison to in-person working environments.

Most significantly, the informal learning that occurs naturally in a physical workplace becomes more challenging to replicate in a remote setting. In a remote work setup, spontaneous conversations, informal knowledge sharing, and observational learning opportunities are often diminished. This can impact the organic development of skills that are crucial for professional growth. The digital skills gap, in particular, is exacerbated because remote work necessitates a higher level of self-sufficiency in navigating digital tools and platforms.

Additionally, the lack of face-to-face interactions can hinder the development of soft skills, such as communication, teamwork, and interpersonal dynamics, which are essential for success in any professional setting. Gartner calls it a ‘workforce-wide erosion of social skills’.

The impact of Gen Z’s skills gap

The impact of Gen Z’s soft skills and digital skills gap could have far-reaching implications for Gen Z workers, employers, and the economy as a whole – especially with a large proportion of the workforce estimated to be made up of Gen Z professionals in the near future.

For Gen Z workers

For Gen Z workers, the skills gap poses significant employability hurdles, making it difficult for them to secure jobs or advance in their chosen careers, thereby restricting their overall professional opportunities. In fact, 92% of businesses say that having basic digital skills is important for their organisation and a key skill they look for in candidates. This demand will grow in coming years with 60% of employers expecting their reliance on advanced digital skills to increase.

The deficiency in essential skills also acts as a hindrance to career advancement, limiting Gen Z’s ability to assume more complex and higher-paying roles within the workforce. The repercussions extend beyond career paths, impacting job satisfaction and well-being, too.

For businesses

Surveys reveal that 76% of businesses agree that a lack of digital skills would affect the profitability of a business, which means the Gen Z digital skills gap could be detrimental. For example, these gaps can lead to reduced overall productivity within the workplace, as Gen Z employees may struggle to efficiently carry out tasks or adapt to dynamic work environments. Furthermore, the lack of advanced digital skills among this demographic poses constraints on innovation, limiting their ability to contribute novel ideas and technologies that enhance a company’s competitiveness in the market.

Additionally, the retention of Gen Z talent becomes a significant concern, as these workers may feel stagnant in their roles due to a perceived lack of opportunities for skill development and career growth, potentially leading to higher turnover rates within organisations. The collective impact underscores the critical importance for businesses to proactively address and bridge the skills gap among their Gen Z employees to ensure sustained productivity, innovation, and talent retention.

It’s also important to recognise that the skills gaps among Gen Z talent may present a shortage of skilled workers to fill the workforce, which could result in understaffing issues, too.

For the wider economy

A significant skills gap, especially in digital competencies, not only hinders individual careers but also slows economic growth, increases unemployment rates (especially among Gen Z), and widens socioeconomic disparities. Globally, countries with skill-deficient workforces struggle to compete in digital industries. Closing this gap is crucial for economic growth, reducing unemployment, and ensuring global competitiveness in our increasingly digital world.

5 Ways businesses can address the Gen Z skills gap

1. Upskilling

Upskilling is an effective method to resolving skills gaps within your workforce or it can even be used when hiring under-skilled staff and moulding them to the role requirements. Implementing targeted upskilling programmes focused on digital skills, such as programming, data analysis, or proficiency in any other relevant tools for your business can be a game-changer. Best of all, this is what your employees want! Surveys reveal that 70% of young people want their employers to invest in their digital skills.

The same can be done for soft skill development through workshops and training sessions, and can be highly effective for fine-tuning communication, teamwork, adaptability, problem solving – you name it,

2. Apprenticeships

Apprenticeship programmes have many benefits for both employers and apprentices. Notably, this includes the learning opportunities available that enable the apprentice to upskill themselves, while at the same time providing your business with highly-skilled talent. Since apprenticeships are specially designed to be training-focused, providing Gen Z talent with hands-on experience, solid support systems, and additional learning aids, they are the ideal environment for individuals to learn – even more so than on-the-job training in an entry-level or regular job. And in the realm of technology, apprenticeships could even be the answer to helping close the skills gap!

Another great thing about apprenticeships is that they provide opportunities for those without experience to enter the workforce, enabling improved social mobility for those who do not have access to higher education or similar opportunities. As a result, various workforces become more accessible, welcoming more talent from various backgrounds and improving skills diversity.

Read our top tips on how to best support your apprentices as an employer or our guide to flexi-job apprenticeships.

3. Job shadowing opportunities

Job shadowing offers individuals the opportunity to observe an employee carrying out their daily tasks, giving them an insight into their roles and responsibilities, and the skills required. When beginning in a new role, job shadowing is crucial to learning the ropes, including the all-important soft skills you gain from face-to-face interactions. However, when starting in a remote environment, job shadowing is not always possible and is a common experience among many Gen Z professionals.

Consider facilitating job shadowing experiences where Gen Z workers can observe and learn from experienced employees. This exposure provides insights into workplace dynamics and helps them acquire soft skills through observation.

4. Mentorship programmes and cross-generational collaboration

Establish mentorship programmes pairing Gen Z workers with seasoned professionals to impart digital skills knowledge. In fact, these mentorship programmes facilitate a valuable cross-generational exchange of skills in all shapes and sizes. So, mentorship can also address soft skills development, offering guidance on effective communication and professional conduct.

This also works the other way around. Simultaneously, younger workers offer fresh perspectives, keeping mentors abreast of other evolving technologies and modern communication styles, fostering a mutually beneficial learning environment that bridges generational skill gaps.

5. Focus on inclusivity

It is important to take an inclusive approach in everything you do. Business leaders should prioritise training managers to be inclusive and adaptable to different generations, recognising that a diverse and inclusive workplace is key to closing the Gen Z skills gap. After all, everyone is different with various backgrounds and learning styles!

Training managers in inclusive leadership ensures that they understand and appreciate the unique strengths and perspectives of Gen Z workers. By adapting management styles to cater to diverse generational needs, leaders can create an environment where Gen Z feels valued and understood.

Learn more about understanding Gen Z in the workplace.

How FDM is closing the Gen Z skills gap

At FDM, we recognise the value that Generation Z brings to the workforce and are committed to nurturing their talents in our clients’ teams. We recruit talent from all backgrounds and generations, providing them with expert training, encompassing both soft and technical skills, and placing them within our client teams, ready to make a real difference in your projects.

Are you looking for the top Gen Z talent to join your teams? Learn more about FDM’s consultant services or get in touch for more information.