Finding qualified employees has long been a challenge for small businesses. A new report by WGU Labs suggests that upskilling existing staff could solve the problem.
The report, compiled based on two decades of market data and information from employers, revealed that 87% of companies worldwide are facing a skills gap. At the same time, millions of American workers without college degrees, which WGU Labs refers to as “rising talent,” are stuck in low-paying jobs that lack stability or opportunities for advancement.
Investing in rising talent enables these employees to build fruitful careers, and it helps companies solve their workforce challenges by creating “a more resilient, loyal and skilled workforce,” the report suggests. Fortunately, small businesses often have close relationships with employees and the flexibility to upskill their people to develop a local talent pipeline.
The workforce challenges facing small businesses
In the National Federation of Independent Business’ April 2025 jobs report, 34% of small business owners said they had job openings they couldn’t fill. And, 47% said it was because they couldn’t find qualified applicants.
Nearly 30% of small business owners also reported having openings for skilled workers, and 13% had openings for unskilled labor. Job openings were highest in the construction, transportation, manufacturing, and wholesale industries.
Creating a path for rising talent to advance can help businesses close their skills gaps while allowing these employees to become successful.
The benefits of ‘rising talent’
Rising talent makes up 15% of the U.S. working-age population, according to WGU Labs. These employees traditionally face a number of barriers to moving up the career ladder, including a lack of technology skills, food insecurity, inherited poverty, and no access to childcare. Many also enter the workforce immediately after high school, and, if they pursue higher education, it’s often later in life.
However, these workers often have overlooked skills that can benefit organizations and bring real-world experience that’s applicable to a variety of jobs. Creating a path for them to advance can help businesses close their skills gaps while allowing these employees to become successful. Employees actually seek out upskilling opportunities when looking for new jobs and are often willing to move to companies that offer training to develop skills.
How to upskill existing talent
The WGU Labs report highlights several challenges that companies sometimes face in upskilling rising talent, including time, costs, a lack of incentives, and not informing employees about internal job openings and opportunities.
The report’s authors asked employers for some potential solutions to these barriers. Here’s what they suggested:
- Work with other small businesses. Develop a network with other local employers to “share knowledge, resources, and talent,” WGU Labs says. These partnerships could incentivize local markets to upskill in which companies benefit from talent sharing.
- Partner with community organizations. Work with local nonprofits, academic institutions, and faith-based organizations for talent referrals and recommendations. It will also establish your business within the community.
- Rethink skills requirements. Instead of always seeking people with four-year degrees, identify the skills your organization truly needs. Then, take a chance on job candidates or existing employees with nontraditional backgrounds and track their progress.
- Create educational opportunities. Developing apprenticeship programs enables employees to learn practical skills on the job. Foster internal talent by offering educational opportunities as soon as they’re hired; doing so could build a pipeline of leaders who understand your business.
- Offer support. As much as you can, help rising talent address the challenges in their lives, such as by offering childcare during training sessions or flexible schedules to take courses. These benefits will solidify a culture of learning and employee well-being while enabling organizations to become more resilient with a well-developed workforce.
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