During recruitment, hiring managers often pay more attention to filling the open roles as quickly as possible. However, this leaves little room for vetting the quality of new hires and increases the risk of a skills mismatch. At the end of the day, the mismatch creates a skills gap that the business would struggle to fill.
Unfortunately, job skills mismatches are common among businesses today, but that doesn’t mean they’re unavoidable. In fact, several strategies exist to help you vet candidate skills and job fit to ensure perfect hires every time. But before we explore these strategies, let’s go over what a skills mismatch is, why it happens, and the different types of mismatches in recruitment.
What is a skills mismatch?
A skill mismatch is a difference between the skills required to excel in a role and the skills an employee filling the role or a successful candidate actually has. Put simply, it’s an imbalance between the skills an employee should have and the skills they have.
For example, a skills mismatch happens when a Data Analyst who should be well-versed with data representation, entry, and analysis has no Excel skills. Or when a Virtual assistant can’t complete administrative tasks efficiently. It also happens when an advanced social media manager is hired into an intermediate copywriting role with little room for career growth.
Although company hiring rates have increased significantly recently, skills mismatches have become even more prevalent as well. In early 2025, the Australian Bureau of Statistics recorded an employment-to-population ratio of over 64%, yet around 2.2 million people left or lost a job this same year. This data indicates that while companies are successfully filling roles, some of them still have to let go of employees due to poor job fit.
Types of skills mismatches
A skills mismatch is an overarching term that encompasses three main types of imbalances experienced in the workforce: horizontal mismatches, vertical mismatches, and skills obsolescence. Here is a breakdown of exactly what each one means:
Horizontal mismatch
Also referred to as a field of study mismatch, horizontal mismatches occur when a person works in a field different from what they studied or trained in. This might be a job they’ve fallen into after working in another industry, or one they may have worked their way up into in an organization.
Examples include a teacher who now works in HR, a journalist who is now working in marketing, or an actor who is now a sales representative.
Vertical mismatch
A vertical skills mismatch happens when an employee’s skill set isn’t on par with the level required by the job. This includes underqualified and overqualified people.
While the overqualified employee may experience disengagement and discontent, the underqualified employee is likely to feel disheartened by their inability to perform the main skills required by the role. Both types of vertical mismatches often result in dissatisfaction and a high employee turnover rate.
Examples of vertical mismatches include a qualified lawyer working in a customer support role where they’re technically overqualified for the position and may become disengaged. Or an executive assistant at a production company who’s now an associate producer. In this case, they may be underqualified and struggle under the pressure of fulfilling a role with significantly more responsibility.
Skill obsolescence
With the World Economic Forum recording that the average half-life of skills is only four years, it is evident that skills are becoming obsolete very quickly. Although this is a frightening statistic, it accurately describes skill obsolescence as a type of skills mismatch.
Essentially, skill obsolescence happens when an employee’s skills become outdated in the role they’re in. When this happens, their skills are no longer relevant to current job demands, technologies, or industry standards.
Skill obsolescence comes in multiple forms, like a knowledge deficit, where a software engineer, for example, needs to continually upskill and reskill to stay employable in their labour market.
It can also come in the form of a physical deficit where a construction worker, for instance, has 30 years of experience, but their physical strength is no longer at that level where they can efficiently perform their task. And with each year passing, their chance of injury or inability to perform the job tasks required by the labor market increases.
How do skills mismatches happen?
A skills mismatch happens when employees’ abilities do not align with the demands of their roles due to lapses in job descriptions, hiring processes, and talent pools. In this section, we will explain the causes of skills mismatches so you understand why they happen:
1. When job descriptions misalign with actual requirements
A frequent cause of skills mismatches is the development of job descriptions that do not accurately reflect the competencies needed for the role. When descriptions are vague, incomplete, or fail to capture critical technical and soft skills, candidates who lack essential qualifications may be hired.
This results in employees who are unable to perform key tasks effectively, leading to reduced productivity and the possibility of rehiring within a short period. Such inefficiencies not only increase operational costs but also disrupt organizational stability and long-term workforce planning.
2. When there are gaps in the hiring process
Even where job descriptions are well defined, mismatches can still emerge due to deficiencies in the recruitment process itself. Miscommunication between hiring managers and human resource teams, reliance on qualifications rather than demonstrable ability, and the absence of structured skill assessments are common factors.
Many organizations fail to incorporate practical evaluations such as simulations, case studies, or scenario-based testing, which provide a more accurate measure of an applicant’s capabilities. Without such methods, employers risk selecting candidates whose formal qualifications appear suitable but whose practical skills do not meet the demands of the position.
3. When you test for outdated or out-of-practice skills
Another source of mismatch occurs when employees possess the required skills but have not applied them for an extended period, or have only used them with outdated systems. In fast-evolving industries, technological advancements often render prior knowledge insufficient for current demands.
Employees who are hired in such situations may require retraining, upskilling, or participation in continuous learning initiatives to ensure their competencies remain relevant. Without this investment, organizations risk retaining staff whose skills, while once valuable, no longer align with the realities of the modern workplace.
4. When there are knowledge gaps in niche industries
Skills mismatches are particularly evident in specialized sectors where workforce knowledge is accumulated over decades of practice. When highly experienced employees retire, they often leave behind a gap that newer entrants cannot immediately fill when they’re promoted to the role.
This skills vacuum can significantly disrupt operations and innovation, as the tacit knowledge of senior workers is difficult to replace. Addressing this issue requires deliberate succession planning, mentorship programs, and knowledge transfer strategies to preserve institutional expertise and ensure continuity across generations of workers.
6. Limited talent pools for specialized roles
In certain industries, the labor market for highly specialized skills is inherently small. This structural limitation often compels organizations to hire candidates who only partially meet the role’s requirements.
While training and professional development initiatives can gradually expand the pool of qualified workers, these are long-term solutions that do not immediately address urgent operational needs.
As a result, mismatches may persist despite best efforts, underscoring the importance of sustained investment in workforce development, partnerships with educational institutions, and targeted upskilling programs to build capacity over time.
What consequences do skills mismatches cause?
One of the most serious consequences of this phenomenon is the skill gap that mismatches cause in the workplace, which can affect how productive the company is. Beyond affecting the employer directly, it can lead to workers feeling unsure about the security of their job, career development, and income, resulting in lower productivity, poor quality work, and a loss in revenue. Below, we’ll expand on the effects skills mismatches have on a business:
1. Low business productivity
A 2020 analysis from Boston Consulting Group (BCG) found that more than 1.3 billion people globally are employed in either overqualified or underqualified roles. Putting this into perspective and comparing it with the population of employed people in the world, it means that one in every three hires is a skills mismatch.
This high ratio of imbalance means more employees would feel unsatisfied with their role, leading to a loss of motivation and drive for the role. As a result of the reduced motivation and skill inadequacy or overadequacy, employee productivity begins to decline. At the end of the day, this slows business processes and reduces overall efficiency, making it challenging to reach your company’s goals.
2. Increased turnover rates
As we’ve established, skills mismatches don’t just happen when companies hire unqualified candidates; They happen when you hire overqualified ones as well. Underqualified staff often feel demotivated because they can’t meet expectations. Overqualified staff may feel underutilized and leave for better opportunities.
Both scenarios end in increased turnover rates, which disrupts workflow and leaves skill gaps within the organization. This is one of the reasons why 73% of businesses are using temporary workers to fill skills gaps. Those who don’t follow this route have to redo the skill acquisition process, which requires more time, effort, and resources.
3. High training and recruitment costs
When employees do not possess the right skills, organizations often respond by investing heavily in additional training programs for new hires. While upskilling is valuable, these unplanned training expenses increase operational costs, particularly if the mismatch is widespread.
Similarly, when mismatches lead to high turnover, the costs of recruitment, onboarding, and integration multiply. Recruitment teams may also be forced to extend search timelines or turn to external consultants, further raising expenses.
Beyond the financial burden, repeated training and rehiring also disrupt business continuity, delaying projects and weakening customer satisfaction. In effect, skills mismatches drain both financial and human resources that could otherwise be directed toward innovation and strategic growth.
4. Strategic limitations
When the workforce does not possess the necessary capabilities, organizations are often unable to adopt new technologies, expand into new markets, or pursue complex projects. This inability to act strategically prevents businesses from responding effectively to market changes or competitive pressures. Over time, it restricts organizational agility, leaving companies vulnerable to competitors who have invested in better workforce alignment.
Furthermore, skills mismatches can undermine long-term planning by creating uncertainty about whether the business has the human capital required to deliver on its vision. In this way, mismatches extend beyond immediate performance issues, posing a significant threat to sustainable growth.
How to avoid skills mismatches in your recruitment
Given its complex nature and varying types, there’s no ‘one size fits all’ approach to solving the skills mismatch problem. However, there are simple steps all organizations can take throughout the pre-hiring, hiring, and post-hiring process to help drastically reduce the chances of this occurring and feeling the full weight of yet another hire gone wrong. Here’s a breakdown of how you can avoid skills mismatches in each stage of your recruitment:
Pre-hiring stage
To a large extent, how well you prepare beforehand determines how well the recruitment process will go. As such, in the pre-hiring stage, you’d put in the hard work to prepare the job details, craft the job description, map out what an ideal candidate looks like, and bring it to fruition in your job postings. Here are some things to consider at this stage of the hiring journey to avoid any confusion about the requirements to succeed in the role, thus helping to minimize the risk of a skills mismatch:
1. Write skills-based job descriptions
When writing a job description, specificity is always key. Be clear and thorough about the skills you’re searching for and the requirements a candidate will need to meet to flourish in the role. After all, this is your first opportunity to minimize the risk of a skills mismatch.
While it’s good to inject some color into your job description to accurately reflect your brand and sell the benefits of working at your company, you shouldn’t let that distract from the information that matters. Keep the important details about the skills required plain, straightforward, and presented on a mandatory to preferred scale, so there’s little room for misinterpretation.
Of course, for a full understanding of what skills to assess, you should perform a job analysis beforehand as well. Then, you can continue to draft your job description, ensuring it includes the following:
- An accurate job title that clearly describes the position in as few words as possible.
- An ideal candidate profile that lists their responsibilities, requirements, and what a day in the life of this role will look like.
- A list of the must-have hard skills required to perform the job.
- A list of the soft skills that are critical to succeed in the role.
Finally, think deeply about the requirements that are actually important to the role’s success, rather than leaning on commonly used recruitment phrases. If skills obsolescence teaches us anything, it’s that years of experience aren’t always the best indicator of efficiency or job fit. For example, writing “requiring a person who has experience operating X program” is more effective than writing “3-5 years of experience needed.”
2. Create a strong employer brand
An employer brand is the first idea a candidate has about the average employment experience at an organization. Strong employer brands communicate a company’s identity and reputation in a way that creates a narrative that potential job candidates would resonate with. This branding should make it easy to understand a company’s mission, culture, and reputation.
When you have a strong employer brand, and job seekers perceive your company as a desirable place to work, it helps to:
- Reduce the workload to market job vacancies: Candidates who admire an organization and want to be part of the culture are more likely to apply for a position within the company, thus increasing job applications.
- Widen your talent pool: With more applicants, there is a broader selection of people to choose from to ensure you select the most qualified candidates with the right skills rather than settling for an available option. This means you can thoroughly assess all your candidates for the required skills and hire the best fit.
3. Use a recruitment firm or RPO
Partnering with a recruitment firm can be a valuable step in strengthening the hiring process. These firms bring an informed perspective on labor market trends and candidate expectations, allowing organizations to attract qualified talent more effectively.
Recruitment firms have access to wide networks, advanced sourcing tools, and specialized expertise to help build a pool of candidates whose skills align closely with role requirements. This reduces the likelihood of mismatches while also making the hiring process more efficient.
So, if you’re focused on improving both quality-of-hire and time-to-hire, working with a recruitment firm is a good idea. It helps enhance lead generation efforts and ensure that positions are filled by candidates who can support organizational objectives and long-term success.
Hiring stage
During this part of the process, your primary goal is to adequately analyze, verify, and assess your candidates’ skills. While the pre-hiring phase sets you up for success, the recruitment process requires the most attention to detail to avoid a skill mismatch. Consider the following when approaching the hiring phase:
4. Use an AI-powered skills-based assessment
The reality is that, though companies try to avoid it in traditional recruitment processes, most people don’t tell the whole truth during the hiring process. In fact, in Australia alone, nearly half of the population of job seekers have lied during the job application process, and almost 20% have lied more than once.
This means that for every 10 resumes you review, there’s a high chance that five of them are filled with fake experiences and skills. For this reason, 86% of hiring managers today are switching to more skills-focused assessment techniques for their hiring.
So, rather than relying on just resumes or virtual interviews, you can test for the necessary skills on a skill assessment platform like Vervoe.
Vervoe’s AI-powered platform allows you to create an assessment customized to your organization’s unique requirements and administer it to your candidates seamlessly. Once they take the test, our AI grades and ranks candidates according to their performance, reducing the risk of hiring errors or bias.
In the end, you get to see the top performing candidate at first glance, analyze their performance to ensure it aligns with your company’s standards, and hire within less time. This reduces the risk of skills mismatches and ultimately increases the efficiency of your hiring process.
5. Be intentional with your interview questions
The interview stage is essential for moving beyond technical capabilities and gaining a holistic view of a candidate’s potential. Once skills-based assessments have confirmed their technical competence, the interview allows employers to focus on qualities that drive long-term success.
At this point, you get to explore how well a candidate’s values and working style align with organizational culture, as well as their adaptability and growth potential. You can use targeted behavioral and situational questions to uncover how they handle real-world challenges, manage pressure, and collaborate with others.
It also provides an opportunity to evaluate communication, presentation, and problem-solving skills in a practical context. By shifting the emphasis toward cultural fit and soft skills, employers gain a clearer picture of whether the candidate can thrive in the role.
Post-hiring stage
Once you’ve found the right candidate for the job, it’s time to integrate them into your company with a proper onboarding process that sets them up for success. Doing this means establishing systems for ongoing support and training to ensure their skills are up-to-date and consistently relevant. Here are some techniques to avoid skills mismatches in the post-hiring phase.
6. Have an effective onboarding process
An employee’s first interaction with an organization after recruitment matters, so it’s essential to have a well-thought-through onboarding plan. The prefect employee onboarding plan ensures that your newly employed candidates integrate smoothly into your company by:
- Creating a social environment that welcomes the new hires into the company.
- Teaching the new hires how business operations and hierarchy run.
- Training them about how to use equipment and software vital to their role.
Throughout the onboarding process, you must look beyond technical skills to show he new hires how things are done in your company so they can settle in easily. Combined with their knowledge and skills, this would ensure they excel in the role.
7. Create a personal development plan with the employee
Generally, people are motivated by self-development, which includes professional development too. If an employee’s career progression and goals align with the organization, it improves overall satisfaction and willingness to continue fine-tuning their skills.
An effective way to keep an employee’s skills sharp is to have their manager work on a career development plan with them to combine personal and professional goals into an actionable plan. In doing so, you’re ensuring that your employee will grow along with the company and that their skills won’t become obsolete in a couple of years.
When working on an employee development plan, consider the following questions:
- What are the employee’s personal and career development goals? This can incorporate both soft and hard skills.
- What are the organizational needs and role development requirements? Consider how the employee’s goals might align with the organization’s needs and assess what the future of the role looks like to ensure the skill sets will align.
- How can these goals be turned into an action plan? Consider what formal training is required, and agree on a timeframe that suits both the candidates and the company.
By treating development as a shared responsibility between employer and employee, businesses create a culture of continuous learning and adaptability. This way, the employees feel valued, and the organization remains resilient, competitive, and well-prepared for the future.
8. Implement regular skills training
Knowledge and technology are constantly evolving, bringing new processes and techniques that shape how work is done. To keep up with the pace, employees must update their skills through regular training and development. Without this, their expertise risks becoming outdated, reducing their ability to contribute effectively to organizational goals.
Continuous learning not only ensures that skills remain relevant but also strengthens adaptability in the face of change. In addition, employees who see investment in their growth are more likely to feel valued and engaged, which boosts job satisfaction and performance.
Make your recruitment error-proof with Vervoe
A skills mismatch can have a detrimental impact on the success of an organization. Fortunately, with the right strategies and a reliable tool to make your recruitment skill-focused, you don’t have to worry about hiring imbalances.
So, if you’re ready to make the transition to skill-based hiring, Vervoe is the perfect place to begin. With features like skill testing anti-cheating measures and job simulations our platform ensures that your hiring process is fast and mismatch-free.
Book a demo today, and let’s show you the easy, yet efficient way to hire.
[Read More: Skill Test]
