Europe is losing the skills race. McKinsey's research shows why.

The gap between knowing and doing

Europe's skills problem isn't new. What's new is how fast it's compounding.

The World Economic Forum projects that 59 out of every 100 workers globally will need substantive retraining by 2030. Meanwhile, McKinsey's 2026 Next Era of Work Survey covering 8,000 employees and 1,000 employers across seven European countries found that 90% of European leaders believe capability building is urgent. But, only 5% feel their organization is adequately equipped.

That gap between acknowledgment and action is where European competitiveness risks falling behind.

Why Europe is especially exposed to skills gaps

Europe faces structural disadvantages that make the skills gap more acute here than elsewhere:

• An aging workforce. Slower workforce renewal compared to North America and sub-Saharan Africa means the pipeline of new skills is thin.
• Slower AI adoption. European companies lag behind the US and China in technology adoption, particularly AI. McKinsey's survey found that 17% of European organizations are investing in AI tools without investing in the capability building required to use them effectively. You can't extract value from tools your people don't know how to use.
• Short-term planning horizons. While 73% of HR leaders in Europe claim to plan strategically, McKinsey's 2025 HR Monitor Survey found that only 12% are planning three years out or beyond. That's not strategy, that's extended operational management.
• Skills assessment blind spots. OECD research across five European countries found that less than one in four companies regularly assess their skill needs. You can't close gaps you haven't measured.

The result: organizations that intellectually accept the challenge but structurally aren't set up to meet it.

The disconnect between leaders and employees

Here's what makes this harder to solve: European employees are also underestimating the shift.

McKinsey's survey found that European leaders and employees are roughly ten percentage points less likely than their North American counterparts to expect their current role to meaningfully change in the next one to two years. Of those in Europe who do anticipate change, only 11% believe skills will be the primary driver compared to 17% in North America.

This matters because workforce transformation doesn't work top-down if the workforce doesn't feel the urgency. L&D programs land better when employees understand why the skills gap is a personal problem, not just a corporate one.

What leaders consistently name as blockers

McKinsey's research identifies three recurring blockers to capability building at scale in European organizations:

1. Time: Nearly half of leaders cite lack of time as the biggest barrier to in-house capability development.
2. Resources: Financial and human capacity constraints prevent most organizations from building at scale.
3. Senior leadership support: Capability building gets deprioritized in favor of short-term operational demands.

This isn't new. A 2024 European Commission report on workforce skills confirmed that capability building consistently loses out to immediate operational pressure. The consequence is a system where training exists, but never at the scale or continuity the moment requires.

What the data from 196 enterprises tells us

Lepaya's State of Skills 2026 report, built on training data from 196 global enterprises, 27,746 learners, and 204,111 hours of upskilling practice, captures what organizations are actually doing, not just saying.

Three findings are particularly relevant to the European context:

1. Empowering leadership training surged 126%

Investment in empowering leadership grew 126% from 2024 to 2025 and now accounts for over half of all training investment across Lepaya's client base. This isn't a trend about making leaders feel good. It's a structural response to organizational flattening. As management layers disappear and AI handles more routine cognitive work, the ability to activate, coach, and align teams becomes a core business capability.

The European organizations doing this well aren't running one-off leadership programmes. They're building leadership capability as a continuous, measurable system.

2. Ownership became a top-five skill for the first time

Taking ownership entered the top five most-trained skills in 2025-2026, a 40% increase in training investment. Three forces drove this: organizational delayering, permanent remote and hybrid work, and AI democratizing specialist-level capabilities.

When a senior analyst's tools are available to every mid-level employee, the competitive differentiator shifts from access to judgment. Employees who take initiative, manage stakeholders proactively, and operate without constant oversight become the ones who generate disproportionate value.

3. The three strategic skill bets leading companies are making

Lepaya's data shows that high-performing organizations are concentrating investment on three intersecting capabilities: empowering leadership, commercial judgment, and ownership. They're the human capabilities that determine whether AI investments actually translate into performance gains, or just generate usage statistics.

“Work itself is becoming less about task completion and more about judgment. The value people bring now lies in how they interpret information, connect dots, and decide what matters. You can’t meaningfully separate “doing the work” from “owning the work” anymore. Finally, organizations are starting to rethink work design, not just roles. Instead of asking “who should do this?”, they’re asking “how should this work exist at all?” That naturally favours people who can take ownership of systems, processes, and outcomes — not just job descriptions.”

-- Missy Strong, Senior Lead of People Experience at Pigment

The planning problem is structural, not motivational

One thing research consistently shows is that the problem isn't ambition, it's architecture.

Most L&D functions still operate in reactive mode: a request comes in, a program gets built, impact is loosely tracked. That model worked when the pace of change was slow enough that a skills program could remain relevant for three to five years. Today, a skill can go from scarce to commoditized in 18 months.

What replaces it is a continuous learning model: identifying skill priorities from real data, designing learning that connects directly to performance outcomes, tracking behavior change and business impact, and feeding that back into the next cycle. Lepaya's own client data shows that organizations making this shift, treating L&D as a continuous loop rather than a calendar of events, build capability faster and can demonstrate strategic impact more reliably.

“We prioritize leadership because in leadership, everything comes together: the development of the individual employee, the strength of the team, to make the tasks of our clients possible. The leader is the one who supports employees in achieving both collective and individual goals in a world of change.”

-- Marjolein de Groot Aertssen, L&D Program Manager at Croonwolter&dros

Three things European L&D leaders can do differently

Drawing on both McKinsey's recommendations and Lepaya's data, three actions create meaningful traction:

1. Start with a skills assessment, not a curriculum.
If fewer than 25% of European companies regularly assess skill needs (OECD), your first competitive move is knowing what you actually have. Lepaya's Skills Gap Analysis Tool takes under three minutes and gives team-level visibility on where gaps are widest. That data shapes everything else.

2. Shift from short-term planning to multi-year skills strategy.
Only 12% of European HR leaders plan three years out. That means 88% are building capability for a version of their business that already exists, not the one they'll need to compete in. A multi-year skills roadmap, tied to business strategy, changes the conversation from training budgets to strategic investment.

3. Invest in the human capabilities AI amplifies, not the ones it replaces.
Lepaya's State of Skills 2026 is direct on this: AI raises the floor of technical capability. It doesn't raise performance by itself. The organizations seeing real returns are the ones building leadership, ownership, and commercial judgment on top of their AI infrastructure, not instead of it.

“AI works best as a scalpel, not a sledgehammer. Many reps will point it at their entire sales process, automating every touchpoint until the human connection disappears. The real pros will use it to cut out the busywork and protect the parts of selling only humans can do — and in the future, sales leaders will measure those moments just as closely as activity metrics, with clear rules for where AI isn’t allowed to replace a person.”

-- Ashleigh Early Chief Executive Officer at Other Side of Sales Consulting

The window is narrowing

McKinsey's conclusion on European organizations is clear: those that continue to plan short-term and react rather than build will find themselves competitively exposed as AI transformation accelerates.

The skills crisis isn't coming. It's been accumulating for years. What's changed is that the cost of delay has become large enough to show up in business results, in slower AI ROI, higher talent attrition, and widening gaps between organizations that invest in human capability and those that don't.

The good news: the organizations that move now have a durable advantage. Skills infrastructure takes time to build. That means starting sooner is itself a competitive position.