The U.S. workforce isn’t running out of people, but it is running low on people with the right skills. Demographic shifts, lagging college completion, and the accelerating impact of AI are converging to create a workforce unprepared for the demands of tomorrow. Employers who act now by scaling experiential learning, accelerating their reach, and investing in AI fluency can close the gap.
Not a Labor Shortage—A Skills Shortage
The workforce pipeline is shifting in ways employers cannot ignore. Between 2024 and 2032, 18.4 million experienced workers with postsecondary education will retire, while only 13.8 million younger workers with equivalent education will enter the workforce. That leaves the economy 5.25 million skilled workers short including 4.5 million roles requiring a bachelor’s degree or higher.
This is not a labor shortage; the number of age-eligible candidates will continue to grow. The real problem is a shortage of prepared workers: people equipped to lead, solve problems, and adapt to rapidly changing demands.
While this shortage will impact the entire global workforce, disruption will be most acute in knowledge-intensive fields such as operations, finance, and technology, where expertise is accumulated and can’t be built overnight.
The numbers paint a worrying picture: 84 percent of hiring managers state that most high school graduates are not prepared to enter the workforce. Meanwhile, 40 percent of managers say graduates are unprepared, according to Forage’s recent study, “From Coursework to Careers.” Executives cite talent shortages as a major concern keeping them up at night.
Meanwhile, students are realizing too late that workplace expectations far outpace their own perceptions. Eighty-eight percent of students surveyed believe their coursework alone will prepare them for future roles. When asked, early-career accounting and finance employees rated themselves 7.4/10 in preparedness, compared to their managers, who rated them 4.9/10. However, once hired, career starters are admitting difficulty with interpreting feedback, conflict resolution, and additional abilities, realizing that their coursework alone was not enough to develop their professional competencies.
AI is reshaping the landscape further. While automation eliminates routine work, it also eliminates environments to learn at low stakes. Instead, it raises the bar for human decision-making, which now demands higher technical fluency, adaptive thinking, and ethical judgment.
The outlook is clear: Without new employees who possess vital communication, problem-solving, and analytical skills, employers are facing an increase in inefficiency, delayed productivity, and innovation bottlenecks. So what can companies do to raise readiness and ensure success?
What Leaders Can Do Differently
The skills gap is impending but not inevitable. Employers can take practical steps now to reshape how they identify, prepare, and support talent.
Three moves
1. Match Talent Where They Are
Most employers have gotten the memo to ditch credential bias, with less than 40 percent of companies screening candidates based on college GPA. But the next step is to prioritize exposure to real-life experiences for early-career employees to learn and practice critical skills. Internships are great, but they can be inequitable to candidates with additional responsibilities, such as those who are caring for children or aging parents or pursuing advanced degrees. Additionally, many companies lack the capacity to scale internship programs. Around 50 percent of employers mentioned lack of resources or lack of manager buy-in as obstacles to expanding skills-based hiring.
Employers who focus on skill tests have open access to larger pools of talent while ensuring candidates are educated on role expectations before day one. For instance, allowing a candidate to practice data trend analysis or compliance assessments can increase the candidate’s confidence and clarity.
2. Meet Candidates Earlier
Companies must meet talent earlier in the pipeline. Waiting until the interview stage is too late, and even the application submission process can delay locating prepared employees. Simulations, such as the ones offered by Forage, give candidates a way to try real-world tasks before applying and give employers visibility into how those candidates think and perform. A student can explore engineering by troubleshooting a design flaw before making a recommendation. These experiences not only build skills but also expand awareness of career options, especially for underrepresented groups.
Make AI Fluency a Must
Finally, employers should treat AI fluency as a core workplace skill. Few roles will require deep coding knowledge, but nearly every role will require the ability to use AI responsibly. That includes knowing how to prompt effectively, evaluate results critically, and apply outputs ethically. For operations positions, employers should protect future projects from delays and failures by utilizing process mapping and diagnostics simulations. Training in these competencies should begin at the earliest stages of career preparation, not years into the job.
By employing these three steps, companies will not only bridge the skills gap but also have a competitive advantage against peers who are slow to change. Only 15 percent of employers reported making changes to their recruitment programs in 2025; most are still relying on traditional strategies to surface talent, despite all evidence to the contrary.
Taking Action Means Better Outcomes
Left unaddressed, the gap in workplace readiness will widen, decreasing productivity, talent equity, and competitiveness. But employers can act now to close that gap in tangible ways. Forage partners report 20–40 percent faster recruiting cycles and 3.3 times higher hire rates among candidates who complete a Forage simulation. Ninety-five percent of students report a stronger understanding of a role after completing a Forage simulation. On average, Forage saves employers $1200 per hire by engaging and educating quality candidates.
Forage’s virtual simulations give students a way to learn and demonstrate their capability and give employers a way to measure readiness. Leaders who adopt these strategies will not just fill roles; they’ll cultivate a workforce that is prepared, motivated, and committed from the very start.
