Recent research from the Wharton School, in collaboration with Accenture, helps explain why this issue has proven so persistent.

The Labor Market Has Shifted to Skills

The January 2026 Wharton–Accenture Skills Index shows that the labor market has moved from a role-based system to a skills-based one. Job titles still dominate hiring conversations, but they no longer reflect how work actually gets done. As a result, many candidates emphasize broad, widely accepted traits such as communication, leadership, and problem-solving. These skills are not unimportant, but they are now so common that they no longer differentiate candidates.

Where the Mismatch Appears

At the same time, employers consistently struggle to find execution-critical capabilities. Skills tied to operational expertise, technical depth, compliance, and execution-level management appear more often in job postings than in worker profiles. These are the skills required to move work from intent to outcome, yet they remain undersupplied.

Why Labor Quality Remains a Top Concern

This imbalance signals a growing gap between how skills are presented by candidates and how work actually gets done by the employer. It also helps explain why labor quality remains such a persistent concern. According to the National Federation of Independent Business (NFIB) December 2025 survey data, labor quality is the second most frequently cited concern among small business owners.

Part of this challenge lies in how candidates think about presenting their experience. As the labor market becomes more skills-based, continuing to highlight broad traits can limit alignment. Clearer signaling of operational, technical, and execution-level skills could improve hiring outcomes and mitigate some of the perceived labor shortage.

In our next post, we will explore what small businesses can do differently to adapt to a skills-based labor market without increasing headcount or payroll risk.

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