Skills shortage: how employers can respond.

A skills shortage happens when employers can't find enough workers with the specific qualifications, technical knowledge, or trade skills their roles require. But it's rarely a single problem. Employers can see it in the roles that stay open for months, the projects that stall because the right people aren't available, and the teams that absorb work meant for positions that haven't been filled. What most aren't sure about is what to do about it, and that uncertainty often leads to the same set of responses: post the job again, raise the salary offer, hope for a better candidate pool next quarter.

The problem with that approach is that "skills shortage" is a broad label applied to several distinct workforce challenges, each with different root causes and different solutions. Organizations that treat them as interchangeable end up investing in fixes that don't match the real problem.

I lead recruiting, sales, and operations for the science, engineering, and technology verticals at Kelly in Canada, with close ties to our U.S. and global accounts. Across all of those markets, I see organizations learn that diagnosing the actual workforce problem before choosing a response matters more than the response itself. This guide covers what's driving the shortage, how to figure out which type of workforce challenge you're facing, and the strategies that work once you've identified the real problem.

What's driving the skills shortage in 2026.

Three structural forces are working together to make the shortage in 2026 qualitatively different from prior years, and none of them are likely to ease on their own.

> Technology is changing faster than training systems can adapt.

The skills employers need today didn't appear on most university curricula five years ago. AI, cybersecurity, big data analytics, and automation have created demand for capabilities that traditional education programs weren't built to produce, and the distance between what graduates know and what employers need continues to widen. The World Economic Forum's Future of Jobs Report projects that nearly 40% of skills required on the job will change by 2030, with 63% of employers already citing skills shortages as the most significant barrier to business growth.

> Institutional knowledge is leaving faster than it can be replaced.

Roughly 10,000 baby boomers retire every day in the U.S. In Canada, an estimated 5.2 million boomers have already left the labor force, and the largest wave is still ahead as the final cohort reaches retirement age by 2030. Each departure takes decades of context, relationships, and operational understanding with it. The Kelly Global Re:work Report found that nearly 40% of global executives say they're worried retirements will deepen skill shortages, and the worry is about more than headcount. As boomer retirements accelerate across industries, what leaves with each senior engineer or experienced project manager is judgment built over years of problem-solving in specific environments.

> AI is compounding the problem from both directions.

Demand for workers who can build, manage, and oversee AI systems is surging, and the supply isn't close to keeping pace. AI skills are now the most difficult for employers to find globally. Many organizations aren't investing in AI literacy for their existing workforce either, which means the shortage deepens with each quarter of inaction. Simultaneously, generative AI tools are creating opportunities to rethink job design and expand talent pools, but most organizations haven't made that shift yet.

Industries where the skills shortage is hitting hardest.

The shortage doesn't hit every industry in the same way, but four sectors face the most acute pressure right now.

• Healthcare: A structural nursing deficit that retirement waves and limited faculty pipelines will only deepen. The Health Resources and Services Administration projects a roughly 10% shortfall in registered nurses in the U.S. in 2026, with the deficit significantly worse in non-metropolitan areas. Canada is facing similar pressure, with the nursing shortfall projected to reach roughly 117,600 by 2030 and more than 31,000 nursing vacancies recorded in the first quarter of 2025.
• Technology and IT: Cybersecurity alone accounts for more than 500,000 unfilled positions in the U.S. and an estimated 25,000 to 30,000 in Canada, and AI and machine learning talent remains in extremely short supply. Because every industry now depends on tech infrastructure, these shortfalls ripple outward.
• Engineering and skilled trades: Nearly one in five electricians is over 55, and apprenticeship pipelines are too thin to absorb the losses. The construction industry needs 349,000 net new workers in 2026 alone, rising to 456,000 in 2027. In Canada, the industry will need 306,200 new hires by 2034, with one in five current workers expected to retire within the decade and the incoming workforce still falling short by an estimated 34,300.
• Science and life sciences: The challenge here is less about volume and more about specialization. Employers need candidates with AI proficiency and data capabilities layered on top of deep domain expertise, and that profile is rare in the talent market.

How to tell if you have a skills shortage or a different problem

Before investing in a response, it's worth stepping back and asking a more basic question: is this really a skills shortage? Many employers assume the problem is a shortage of qualified talent when the real issue is something else entirely. Getting the diagnosis wrong means spending months and budget on a solution that doesn't address the root cause.

There are three distinct workforce problems that often get lumped together under the "skills shortage" label, and each one leaves different fingerprints.

> Signs of a recruiting problem

A recruiting problem shows up as a long time-to-fill, thin candidate pipelines, and high offer decline rates. Qualified candidates exist in the market, but the employer can't close them. Root causes tend to be compensation misalignment, a weak or unclear employer brand, or hiring processes that take too long. If your sourcing is turning up qualified candidates but you can't get them across the finish line, the shortage is in your offer, your process, or your positioning, not your talent pool.

> Signs of a retention problem

A retention problem looks different. The same roles keep being vacated and backfilled, or you're seeing high voluntary turnover concentrated in specific teams or functions. The causes are often internal and layered: management quality, salary misalignment where people accept the role and then get offered more elsewhere, limited career pathways, or cultural issues that don't surface in an exit interview. The Kelly Global Re:work Report found that 42% of global executives say worker satisfaction is improving, but only 27% of workers agree, and 27% of workers say their loyalty has declined. When leadership believes people are content and they aren't, retention problems go unnoticed until they show up in turnover data.

> Signs of a true skills shortage

A true skills shortage is what remains after you've ruled out recruiting and retention problems. The defining characteristic is extensive sourcing that yields few viable candidates. You're not losing people at the offer stage, and you're not churning through the same roles. The talent simply doesn't exist in the market at the volume or specialization you need.

But even here, it's worth pressure-testing the assumption. One of the most common patterns I see is employers who believe they have a skills shortage when they've actually constructed one through their own requirements, screening tools, or hiring process. Employers who pause long enough to ask whether their own process is narrowing the pool often find that the shortage is smaller than it appeared.

How employers can respond to a skills shortage.

Once you've identified that you're dealing with a skills shortage rather than a recruiting or retention problem, your response needs to match the specific nature of the constraint. Most employers I work with are combining several of these strategies at once, based on where their workforce plan has the biggest vulnerabilities.

> Redefine what "qualified" looks like,

A significant portion of the skills shortage is self-constructed. Before looking externally, it's worth asking whether your hiring process is filtering out people who could do the work. Here’s what I see most often:

• Overloaded job descriptions that list every possible qualification rather than the ones the role genuinely requires.
• Degree requirements for roles where hands-on experience or transferable skills would serve just as well.
• Slow hiring processes that lose qualified candidates to faster-moving competitors before an offer is made.
• AI screening tools that match keywords on a resume and filter out capable candidates who don't present well on paper.

Sometimes the best candidates don’t know how to present their hands-on experience or problem-solving ability on paper, or their career path doesn't follow a neat trajectory. If a screening process only evaluates what's written on a resume, it filters those people out before anyone talks to them. A phone conversation or a working interview will tell you more about whether someone can do the job than a keyword match ever will.

Skills-based hiring means evaluating candidates on demonstrated capability and aptitude rather than credentials. IBM did this at scale in 2016 by removing degree requirements from a significant portion of their roles and redesigning assessment tools to prioritize transferable skills. It worked because leadership committed to it as a structural change, not a pilot. They backed it with sustained investment and external partnerships to build candidate pipelines.

The principle applies broadly: review what you're requiring versus what the role needs. Interview candidates before screening them out. Organizations that remove outdated barriers to employment consistently find that their qualified talent pool is larger than they assumed.

> Upskill your current workforce.

Upskilling is most effective when the job function itself is stable but the tools and methods are evolving. Teaching finance staff to use AI analytics, for example, is faster and more cost-effective than recruiting externally for a combined skill set that barely exists in the market.

Consider whether the skill need is ongoing or project-specific. If your team needs a capability permanently, invest in developing it internally. If the need is tied to a specific project and your current team doesn't have the expertise, a statement-of-work engagement or project consultant is often a better fit than a permanent hire.

Upskilling only works as a retention strategy if it's paired with visible career progression. Conduct regular skills inventories to identify employees who are interested in developing new capabilities. Maintain relationships with universities, colleges, and apprenticeship programs to keep pipelines active. And make sure that people who invest in learning new skills can see where those skills take them inside the organization, because better-trained employees without a clear next step tend to find that step somewhere else.

> Partner for specialized and hard-to-fill roles.

When the talent pool for a specialized role is structurally small, the candidates you need are almost never actively applying to job ads. They're employed, engaged in their current work, and not browsing job boards. Reaching them requires access to passive talent networks and recruiters who understand the specific positions well enough to identify fit beyond what a resume shows.

This is where a workforce solutions partner adds capacity that most internal talent acquisition teams can't replicate across every specialty. At Kelly, our recruiters work within the verticals they hire for, including science, engineering, technology, and professional and industrial, and many have a decade or more of experience in those disciplines. A recruiter who understands what a bioprocess engineer actually does day to day can assess fit in ways that a generalist screening process won't.

But the value extends beyond filling individual roles. The employers getting the most from workforce partnerships are treating them as consultative relationships. That means using a partner for market intelligence, salary benchmarking, and long-term workforce planning, not just activating them when a req opens. In a market moving this fast, having a partner who can tell you where shortages are heading and how your compensation and requirements compare is as valuable as having one who can source candidates.

Build a workforce plan that prevents future skills shortages.

The strategies above address shortages that already exist. Preventing the next round requires a longer view. Identify which roles are at risk from retirements, market shifts, or emerging skill requirements three to five years from now. If three senior engineers are within five years of retirement and no one on the current team is positioned to step into those roles, that's a shortage you can see coming and build for now rather than scramble to fill later.

And in a market where skilled candidates have options, the hiring process itself is an interview for the employer as much as for the candidate. Organizations competing for top talent need to present a compelling case for why someone should join, stay, and grow there. That mindset tends to produce stronger pipelines and longer retention.

A workforce solutions partner can help at every stage, from providing real-time market intelligence on where shortages are heading to benchmarking compensation, identifying internal upskilling opportunities, and building workforce plans that keep organizations ahead of the next shortage rather than reacting to it.