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Skills shortages are costing employers time, productivity, and talent retention, with new research also pointing to a widening disconnect between what employers need and what employees believe will help them succeed at work.
Employers are losing valuable time and productivity as workforce skills gaps continue to widen, according to new research from Chegg.
The company's Frontline Workers Skills Index, based on a survey of 1,000 employers and 1,005 employees across ten frontline-heavy industries in the US, including retail, manufacturing, and finance, found that three in ten employers (30%) now spend more than eight hours a week, essentially a full working day, compensating for gaps in their workforce's skills. In manufacturing, that figure climbs to 46%.
This report is based on the US market, but HRO believes the findings are just as relevant to employers across Asia, where many of the same frontline sectors are grappling with rapid AI adoption and stretched training budgets.
Employers referred to in the survey are those fully or partly involved in hiring decisions at their organisation, while employees are those with no hiring responsibility.
The hidden cost of the skills gap
Beyond the lost hours, the research points to a broader operational toll. Employers cited increased mistakes and rework (34%), rising stress and burnout (33%), heavier workloads or having to cover for colleagues (31%), and more overtime or longer shifts (29%) as some of the most common consequences of skills shortages.
The strain is also spilling into retention. Nearly half of employers (45%) and more than a third of employees (35%) said they had considered quitting because of stress linked to understaffing or capability gaps. Food services and hospitality came out worst hit, with 57% of employers and 43% of employees saying they had thought about leaving their role, the highest of any sector surveyed.
Training is not landing the way employers think it is
The problem appears to start well before staff even walk through the door. More than half of employers (56%) said entry-level workers are not adequately prepared for work, and over a quarter (26%) described the skills gap in their sector as "serious" or at "crisis level".
It does not get much better once employees are in the job. While 77% of employers said their training programmes are effective overall, only 58% of employees agreed, and 71% of employees said training had led to no change in their pay or role at all.
The disconnect seems to come down to relevance rather than a lack of effort. Among employees who found their training ineffective, 51% said it was too generic or too disconnected from their actual day-to-day work. Others pointed to a lack of hands-on practice (39%), insufficient coaching (34%), and weak support from managers (27%).
Employers and employees do not agree on what is missing
Both groups agree there is a capability gap, but they see very different problems. Employers put AI and automation skills (36%) and digital or IT capabilities (24%) at the top of their list, reflecting the pressure to keep pace with fast-changing technology.
Employees, on the other hand, pointed to leadership and people management (25%) as the biggest gap, followed by communication and teamwork (24%). For many workers, the issue isn't purely technical, it's about management and workplace culture too.
Interestingly, when employers were asked what skills matter most for long-term success, problem-solving and critical thinking (36%) and communication and teamwork (34%) topped the list, suggesting that even employers know durable, human skills matter just as much as technical ones.
AI confidence is racing ahead of employee readiness
Nowhere is the employer-employee gap wider than on AI. While 83% of employers said they feel confident using AI tools in their current role, only 44% of employees said the same.
The gap widens further when it comes to career stakes: just 3% of employees believe AI proficiency is becoming critical to getting ahead in their role, compared to 18% of employers. More than half of employees (52%) said AI isn't used in their role at all, leaving them little chance to build familiarity with the technology on the job. Among employers, only 14% said the same, while a quarter (25%) said AI use is already becoming an expectation in their role.
Taken together, the findings suggest the bigger issue may not be a skills gap in the narrow sense, but an awareness gap: many employees simply do not realise how fast expectations are shifting around them.
A widening perception gap, not just a skills gap
According to Dan Rosensweig, Chief Executive Officer, Chegg, the research's biggest takeaway is that while employers and employees recognise the same workforce challenges, they often have different views on what is causing them. He said employers tend to prioritise AI readiness, adaptability, and operational performance, whereas employees are more concerned about career mobility, leadership, and opportunities for advancement. As a result, many existing training programmes are not designed to address the differing expectations of both groups.
Rosensweig added that the findings also show employees are looking for training that delivers practical workplace application and supports measurable career progression, rather than generic learning programmes.
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