As artificial intelligence (AI) becomes more important in the workplace, employers still need employees with strong foundational literacy skills. Unfortunately, many adults continue to struggle with reading, writing and comprehension, and these gaps make it harder for workers to be job-ready. Employers’ concerns about job readiness include whether workers have the relevant skills, communication abilities, adaptability and AI literacy needed to be productive and meet changing job demands. Employers need candidates and employees who can:
- Understand verbal directions and written instructions
- Listen to and speak clearly with managers, coworkers and customers
- Follow safety rules and workplace procedures
- Understand company policies and employee benefits
- Build the skills needed for changing workplace demands.
Recruiting candidates with the above skills is proving difficult. In 2026, many industries are finding their hiring slowing, making the interview process more focused and intentional with a heightened level of scrutiny compared with previous years. Every aspect of recruiting must be efficient to allow hiring for the right roles at the right time. Workforce planning is getting a fresh look as employers struggle to find candidates who meet their needs.
Low Workplace Literacy
Low literacy affects everything from health and wellbeing to personal confidence, making it more difficult for workers to both get hired and remain employed. According to Alison Howard, executive director of ABC Life Literacy Canada, “Nearly half of working-age Canadians struggle with low literacy, and that is a major barrier to full participation in a knowledge-driven economy.”
According to the National Literacy Institute, 54% of U.S. adults read below a 6th grade level. Reading literacy also affects financial literacy such as when employees work with a bank for auto loans, credit cards or a mortgage, as well as with financial companies for workplace retirement plans.
A report titled “Valuing Skills in Canada” from The Conference Board of Canada and Future Skills Centre identified reading comprehension amongst the top five most valued skills for the workplace:
- Troubleshooting—Determining causes of operating errors and deciding what to do about it
- Operations monitoring—Watching gauges or dials to make sure a machine is working properly
- Time management—Managing one’s own time and the time of others
- Reading comprehension
- Monitoring—Watching the performance of people or organizations to make improvements or take corrective action
Reading comprehension helps with productivity and efficiency at work and allows employees to effectively learn as new technologies are introduced. In addition, the report continues explaining that “another important characteristic of high-level reading comprehension is that it cannot be easily replaced by computers and AI, making jobs that utilize advanced reading comprehension hard to automate.”
Low workplace literacy matters to employers because it directly affects whether workers can be hired, stay employed and keep up with changing job demands.
AI Literacy
In addition to basic literacy skills, employers are also highly focused on AI literacy. In February 2026, the Department of Labor (DOL) released a framework to help guide employers and educators saying, “In an increasingly AI-driven economy, every worker will need baseline AI literacy skills to succeed, regardless of industry or occupation.” The DOL defines AI literacy as, “a foundational set of competencies that enable individuals to use and evaluate AI technologies responsibly, with a primary focus on generative AI, which is increasingly central to the modern workplace.”
Solutions Review describes AI literacy as a “composite of technical fluency, critical judgment, ethical reasoning, and practical adaptability that, together, determine whether a person can function productively in environments where AI tools are embedded in daily work.” Business + Higher Education Roundtable puts AI literacy together with AI fluency, saying, “AI literacy is the ability to use the tools; AI fluency is the ability to go beyond.”
A recent Robert Half Canada survey found that nearly 57% of hiring managers report skills gaps, and 58 percent say “the gap is more noticeable than it was one year ago. In addition, only five percent say they have the necessary skills and headcount to complete high-priority projects, and 53 percent say that finding skilled talent has become more challenging in the last year, with AI contributing to the problem.” Other recent reports contain similar results. According to a survey from DataCamp and YouGov, company leaders are “increasingly considering data and AI literacy foundational to business performance, on par with skills like writing.”
Understanding that workplace skills gaps come with the lack of literacy, the federal governments in both Canada and the U.S. addressed AI literacy, specifically. In 2026, both countries released AI strategies encouraging AI training and initiatives for workplaces and education systems.
Takeaways for Employers
Employers should assess the skills gap within their workforce and provide training that fits their workplace and industry. Some ideas for employers to consider include:
- Inventory the kinds of skills gaps employees and managers are reporting
- Offer employee benefits focused on continuous learning opportunities to attract quality candidates and retain current employees such as tuition assistance and reimbursement, specialized credential programs and financial education training
- Partner with education providers in the area like community or technical colleges to improve teaching models and customize lesson plans addressing the skills gaps in prospective employees
- Treat AI literacy as part of job readiness by giving employees practical, role-based training on how to use AI tools responsibly, evaluate AI-generated information and apply those tools to everyday work.
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.
