Nearly a quarter of U.S. employers are facing a major skills gap in their company, and another 42% say it will hit them within the next two years, according to a July 25 report from Salary.com.

Employers named three top reasons for the current and developing skills gap: technology, employee turnover and labor shortages.

In response, 70% of organizations said they’re investing in employee learning and development initiatives. Although most employers haven’t fully decided how generative AI will affect the skills they need, almost a third said it’s already changing the type of skills they’re seeking now, and another third said it could affect the skills they seek in a year from now.

“Successful organizations will invest in training their teams on generative AI and other rapidly evolving technologies, proving the power of upskilling to mitigate employee turnover,” David Turetsky, vice president of compensation consulting at Salary.com, said in a statement.

“With a persistently tight labor market and a willingness among employees to simply move on from jobs that don’t pay well and aren’t fulfilling, upskilling represents a critical path forward for employers,” he said.

In a survey of 425 participants, including 80% who were HR or compensation professionals, respondents indicated that they’re placing a stronger focus on “soft skills” that generative AI doesn’t cover, such as problem solving, communication and decision making. The top five in-demand skills were effective communication (65%), problem solving (55%), critical thinking (47%), attention to detail (43%) and analytical thinking (41%).

In addition to upskilling and reskilling, respondents said they’re conducting skills-based hiring, reworking job descriptions and tweaking their hiring requirements. More than half believe a skills and competency framework is important and decreases bias in job definitions, yet only a quarter said they’ve implemented one. Only 14% have conducted a formal skills inventory audit.

“We strongly advise that organizations start with conducting a skills inventory. HR teams may be pleasantly surprised that they have critical skills they’re seeking in-house,” Turetsky said. “Our survey found that HR pros regard conducting a skills inventory and creating career pathways as their top challenges. Fortunately, software and data can play a key role in operationalizing the process.”

Overall, employers aren’t adopting skills-based hiring quickly enough to keep up with skills gaps and the changing labor market, according to a recent report. While talent acquisition teams catch up on the hiring end, nontraditional training approaches such as upskilling and apprenticeships appear to be helping.

As employers determine how to use generative AI in the workplace, digital and tech skills remain in high demand, as well as “human” cognitive skills such as problem solving, creativity, originality, imagination and the ability to learn. HR professionals are focusing on these skills, both in skills-based hiring and upskilling initiatives.

Read the full report here.