Skills Gap Report 2025

The skills gap is real but narrower, more specific and more self-inflicted than headlines suggest. Drawing on about 270 studies, official statistics and surveys, this first WAC Skills Gap Report finds genuine shortages in care, trades, energy and AI, weak and stagnant foundational skills, and widespread under-use of talent. Much of the gap lies in how employers measure, recognize and build skills. The report introduces the WAC Skills Readiness Framework and ten signals to watch in 2026-2027.

The report in numbers

Key findings

1. Seventy-two percent of employers in 41 countries report difficulty finding talent in 2026, down from a 77 percent peak in 2023 but roughly double the 2014 level.
2. Official data show shortages easing: UK skill-shortage vacancies fell from 36 percent of all vacancies in 2022 to 27 percent in 2024, and US job openings fell to 7.1 million by August 2026.
3. Under-use of skills rivals under-supply: 26 percent of workers in the OECD Survey of Adult Skills say they are over-skilled for their job, against 10 percent under-skilled.
4. Foundations are weak and not improving: 26 percent of adults in OECD countries score at Level 1 or below in literacy and 29 percent in adaptive problem solving, and only Finland and Denmark significantly improved adult literacy over the decade.
5. Employment of 22- to 25-year-olds in AI-exposed US occupations is 19 percent below where it would have been had it kept pace with less-exposed peers, while economy-wide effects remain small.
6. Only 39 percent of workers using AI at work had received AI training from their employer, while 66 percent of leaders said they would not hire someone without AI skills.

The report has 12 key findings in all, 12 chapters of evidence, an original framework and recommendations for five audiences.

Inside the book

1. 
   Chapter 1

   What the skills gap is, and how it is measured

   One phrase covers shortages, proficiency gaps and mismatch; each is measured differently, and the method often decides how large the gap appears.

2. 
   Chapter 2

   The global picture: what employers, workers and tests show

   Employer complaints doubled in a decade and are easing only slightly, while tests show adult basic skills stagnating in rich countries and lagging from childhood in poorer ones.

3. 
   Chapter 3

   AI and the reshaping of skill demand

   Generative AI lifts novices, squeezes entry-level hiring in exposed jobs and pays a premium for AI skills, while employer reskilling lags its rhetoric.

4. 
   Chapter 4

   The skills in shortest supply

   Real shortages cluster in AI, cybersecurity, trades and health care, while the human and foundational skills beneath them are both prized and thinly spread.

5. 
   Chapter 5

   The skills gap around the world: a regional analysis

   From graduate surpluses in Asia and North Africa to demographic shortages in Europe and East Asia, the gap takes different shapes and needs different responses.

6. 
   Chapter 6

   Sector by sector: where the gaps bite

   Shortages in care, trades, energy and teaching are driven by demography, pay and slow pipelines, while technology and finance face changing entry-level work.

7. 
   Chapter 7

   Skills-based hiring: promise and practice

   Employers and governments have stripped degree requirements from postings, but hiring has barely moved; valid assessment, not edited job ads, is what changes outcomes.

8. 
   Chapter 8

   What works: evidence on closing skills gaps

   Randomized trials favor sector-focused training tied to employers; broad vouchers, generic training and self-paced online courses have weaker records.

9. 
   Chapter 9

   Who gets to upskill: workers, learners and inequality

   Adult learning flows to those who already have the most skills, in the largest firms, and in their prime working years; money alone has not reversed that.

10. 
    Chapter 10

    What the gap costs

    Trillion-dollar estimates of the skills gap are model scenarios, not measured losses; the firm and worker evidence shows real but smaller and more specific costs.

11. 
    Chapter 11

    The WAC Skills Readiness Framework

    A practical tool, synthesized from this report's evidence, for finding where a skills gap really lies and what universities, employers and governments should do next.

12. 
    Chapter 12

    Outlook 2026-2027: what to watch

    Ten signals will show whether the skills gap is narrowing, shifting or widening, and what evidence would change the picture.

A chart from the report

One recommendation for each audience

This report is desk research: a synthesis of about 270 published studies, official statistics, employer and workforce surveys and management-journal analyses. WAC ran no survey or trial for it. Every chapter was checked against its sources by an independent fact checker before publication. The photographs are AI-generated illustrations. Send a correction