Talent shortages remain one of the biggest barriers to growth, productivity and innovation. Our 2026 Talent Shortage report reveals that:
69% of U.S. employers report difficulty finding skilled talent
The picture varies by industry, but most employers are facing the same set of challenges.
Why Are Talent Shortages Still Challenging Employers?
Talent shortages persist because workforce demand is evolving faster than the available supply of skills.
Contributing factors include:
- Rapid adoption of AI, automation and digital technologies
- Retirement of experienced workers
- Competition for specialized skills
- Slower development of new workforce entrants
- Skills requirements changing faster than training programs can adapt
The pressure is unlikely to ease soon. According to the World Economic Forum,
Employers expect 39% of workers' core skills to change by 2030.
The challenge extends beyond hiring. Unfilled positions can increase workloads for existing employees, contribute to burnout and slow business growth. As talent shortages become a long-term workforce issue rather than a temporary labor market fluctuation, organizations need more sustainable solutions.
How Can HR Leaders Expand Their Talent Pool?
The most effective way to increase access to talent is to broaden the definition of who may be qualified for a role.
Hire for Skills, Not Just Degrees
Many organizations are shifting toward skills-based hiring. Rather than focusing exclusively on degrees, certifications or specific years of experience, employers evaluate candidates based on their demonstrated capabilities and potential to succeed.
This approach opens opportunities to individuals who may have developed valuable skills through alternative channels. It can also significantly increase the number of qualified candidates available for hard-to-fill positions.
Potential talent pools include:
- Veterans
- Career changers
- Returning caregivers
- Retirees seeking flexible work
- Apprenticeship graduates
- Community college graduates
- Workers from adjacent industries
Revisit Job Requirements
Many job descriptions inadvertently narrow the talent pool by requiring credentials or experiences that may not be necessary for success. Reviewing requirements through a skills-first lens can help organizations remove unnecessary barriers and attract a broader range of candidates.
Before posting a role, ask:
- Is a degree truly required?
- Could equivalent experience qualify?
- Are years-of-experience requirements realistic?
- Which skills are essential versus preferred?
Skilled Talent Can Be Created
Developing existing employees is often faster and less expensive than finding skilled talent in the market.
Investing in training and continuous learning helps organizations build needed capabilities internally while creating career growth opportunities for employees.
1. Invest in Upskilling and Reskilling
Upskilling programs strengthen existing skills, while reskilling initiatives help workers transition into entirely new roles. Both strategies can reduce dependence on an increasingly competitive external labor market.
Upskilling and Reskilling Benefits
Our research reveals that
60% of employers cite upskilling as a key driver of productivity growth, above AI technology or wage adjustments.
Organizations that invest in workforce development can:
- Fill critical gaps faster
- Improve retention
- Increase employee engagement
- Reduce recruiting costs
- Build future-ready capabilities
2. Create Internal Mobility Opportunities
Employees are often willing to take on new responsibilities if they can clearly see available career pathways. Internal mobility programs help organizations fill positions faster while improving retention and engagement.
By encouraging movement across functions, departments and business units, organizations can uncover hidden talent and maximize existing workforce capabilities.
3. Build a Skills Inventory
Many employers struggle to understand the full range of skills already available within their workforce.
A comprehensive skills inventory helps leaders identify strengths, uncover gaps and align workforce development investments with future business needs. This visibility enables more proactive workforce planning and reduces the likelihood of talent shortages becoming critical business disruptions.
What Workforce Models Can Help Organizations Stay Agile?
A more flexible workforce strategy can help organizations respond more effectively to changing business demands and talent availability.
Blend Permanent and Contingent Talent
Few organizations can meet every workforce need through permanent hiring alone. A combination of full-time employees, contingent workers and specialized contractors gives businesses greater flexibility while ensuring critical skills remain accessible.
This balanced approach allows organizations to scale talent up or down as business conditions change while preserving access to specialized expertise.
Leverage Project-Based Expertise
Project-based talent can provide immediate access to specialized skills that may be difficult or impractical to hire permanently. This model is especially valuable for transformation initiatives, technology implementations and short-term business priorities.
Offer Flexible Work Options
Flexibility continues to influence both recruitment and retention. Depending on business needs and job requirements, employers may benefit from offering flexible schedules, hybrid work arrangements, job sharing or phased retirement programs.
These options can help attract talent that might otherwise remain outside the workforce while supporting employee satisfaction and retention.
How Can AI Improve Talent Acquisition and Workforce Planning?
Workforce planning is increasingly shifting from reactive hiring to proactive talent management. AI-powered analytics can help organizations identify emerging skills requirements and anticipate workforce shortages before they affect business performance.
AI Can Help Employers:
- Forecast future skills gaps
- Improve candidate matching
- Identify internal mobility opportunities
- Analyze labor market trends
- Reduce time-to-hire
- Improve workforce planning accuracy
Questions AI Can Help Answer
- Which roles are likely to become difficult to fill?
- Which employees could be reskilled into high-demand positions?
- Where are future skills shortages likely to emerge?
- What talent sources are delivering the strongest candidates?
How Can Employers Improve Retention During Talent Shortages?
Organizations that successfully retain talent tend to focus on career development, leadership effectiveness, meaningful work and employee well-being. Employees are more likely to stay when they see opportunities to grow, develop new skills and contribute to an organization's long-term success.
Focus On:
- Career development
- Upskilling opportunities
- Internal mobility
- Flexible work arrangements
- Strong manager training
- Recognition programs
- Employee well-being
What Should HR Leaders Prioritize First?
HR leaders should focus on building a workforce strategy that balances immediate hiring needs with long-term talent development.
Successful organizations typically prioritize:
- Understanding current and future skills requirements
- Expanding and diversifying talent pipelines
- Investing in reskilling and upskilling initiatives
- Increasing workforce flexibility
- Using workforce intelligence to support better decision-making
- Strengthening retention through employee development and career growth opportunities
Key Takeaways
Rather than viewing talent shortages as a hiring problem alone, leading organizations are approaching them as a workforce strategy challenge that requires both creativity and long-term planning.
HR leaders can improve outcomes by
- Expanding the talent pool
- Embracing skills-based hiring
- Investing in workforce development
- Creating flexible workforce models
Combined with data-driven workforce planning and AI-powered insights, these strategies can help organizations build a more resilient workforce capable of adapting to future change.
How Manpower Can Help
Building a resilient workforce requires more than filling open roles — it requires a strategy for attracting, developing and retaining the skills your business will need next. Manpower can help organizations identify talent gaps, expand access to qualified candidates and create workforce solutions that support long-term success.
