Soft skills are often cited as a major factor in why Sheryl Sandberg, the former COO of Facebook, has risen past her Harvard contemporaries. “She was so good at working with people, you couldn’t help but like her,” explained Lant Pritchett, her first employer. Economic modelling commissioned by McDonald’s UK and undertaken by Development Economics estimated that soft skills were worth over £88 billion a year in gross value to the UK economy (see the BBC’s summary of the campaign).
The same analysis projected that the annual contribution could rise to around £109 billion by 2025. Analysts have also long warned that a persistent soft skills gap in UK businesses risks eroding productivity, competitiveness and profitability if it is left unaddressed.
Development Economics reported that:
“The annual overall expected loss of production due to expected soft skills deficits is anticipated to amount to just under £8.4 billion per year by 2020…If the current weaknesses in the UK’s soft skills base are not addressed, we face an economic penalty that will impact on sectors, businesses, individuals and society as a whole.”
In 2023 the CIPD reported on Essential Skills Tracker research by the Skills Builder Partnership (with KPMG and the Edge Foundation), estimating that low levels of essential skills—including capabilities often grouped under “soft skills”—had cost the UK economy around £22 billion in 2022. Hiring surveys have also highlighted demand for stronger collaboration and communication among early-career employees, and many UK employers continue to say that soft skills matter more than ever—though exact figures vary by survey and year.
However, it begs the question of what these elusively termed ‘soft skills’ are. One definition is:
“Communication and interpersonal skills along with teamwork, time and self-management, decision making, initiative taking and taking responsibility.”
It has been said that the vague term ‘Soft Skills’ was coined by the US Army in the 1960s to refer to any skill that was not involving machinery. This term eventually found its way into the corporate world. In today’s world, soft skills are the traits that characterise the relationships with others, including what underpins effective leadership and management. The skills can link closely with an employee’s approach to life and work, having often been associated with emotional intelligence (often summarised as EQ). Other terms commonly used are “people skills,” “interpersonal skills” and “social skills.” Hard Skills by contrast are skills that are the minimum professional or technical skills required to be able to operate in a particular workplace.
Soft skills have often been undervalued, with much less training being provided than with hard skills, but the tide is now turning with many companies realising the importance of them and the increasing dangers of ignoring this gap. This is partially due to the revelation that soft skills such as communication skills, interpersonal skills, emotional intelligence and even conflict resolution are the foundations needed to underpin successful leadership and management. Many businesses and organisations are now championing soft skills with the aim to change people’s perceptions, including but not limited to: CIPD, Tesco, CBI, Aon, McDonald’s, LearnDirect, FSB and The Work Foundation, to name but a few.
So this begs the question of what companies can do to tackle the soft skills gap. Answer: firstly we need to address any left-over stigma that soft skills are of lesser value than hard skills. Soft skills are absolutely critical in helping a company meet its goals, objectives and core strategies. Namely people management, performance feedback, coaching, advanced communication, listening, teamwork and conflict management skills are high on the essential list. Soft skills are not restricted to any one field and are crucial for your people in an ever-changing, demanding world.
Secondly, identify what competencies are missing in your company and nurture your people by investing in training and ongoing coaching. Create a framework for defining, developing and assessing the skill sets. Use climate surveys with your employees to ascertain perceptions and attitudes, to help to instil positive changes. Incorporate psychometric tools along with a 360-degree feedback scheme for people managers and ensure you add the relevant questions to monitor the progress of soft skills.
Thirdly, take action to promote the desired skill set and make it part of your company DNA. Establish an internal competencies champion, ideally at executive level.
Simply put, let’s dispel the myth that soft skills are ‘soft’; there is nothing ‘soft’ about soft skills when building them helps a company achieve the desired results!
How soft skills convert into commercial advantage
Once leaders accept that soft skills matter, the next question is practical: where do they show up on a balance sheet? Rarely as a single line item—but repeatedly as the difference between smooth operations and expensive friction. Teams that communicate clearly waste less time on rework, handle handovers cleanly and resolve misunderstandings before they become complaints or project slippage. Managers who give useful feedback and coach in the moment help people reach competence faster, which matters when vacancies are costly and onboarding is stretched. In sales and service environments, the ability to listen, acknowledge concern and explain options calmly often decides whether a relationship survives a mistake or a tough renewal conversation.
Soft skills also shape how work feels day to day. Colleagues who can negotiate priorities without escalating every disagreement, and who can disagree without damaging trust, make collaboration sustainable. That matters in matrix structures, in hybrid teams and anywhere work depends on influence rather than formal authority. In that sense, “people skills” are not a polite add-on; they are part of how strategy turns into delivery.
None of this replaces technical expertise. It makes technical expertise easier to deploy: specialists who can negotiate scope, explain trade-offs and involve stakeholders constructively tend to deliver more value than equally capable experts who struggle to collaborate. That distinction becomes more visible as projects grow in complexity and as regulatory, safety and customer expectations tighten.
The moments that matter for customers and colleagues
Many organisations invest heavily in process, systems and brand guidelines—and still lose goodwill in a handful of human interactions. A curt email, a rushed explanation, a failure to acknowledge stress: small signals, large consequences when they accumulate. Conversely, staff who can read the room, adjust their tone and stay professional under pressure protect reputation in the moments customers remember. The same applies internally. HR cases, change announcements, performance conversations and project deadlines all test whether your culture is experienced as respectful and fair, or as brittle and transactional.
Training that focuses on these moments—rather than abstract labels like “communication”—tends to land better because it mirrors real constraints: time pressure, incomplete information, competing stakeholders and the need to stay within policy. When people rehearse realistic scenarios and receive specific feedback on language, pacing and body language, they build judgement they can call on when the stakes are real.
Soft skills, technology and the future of work
Automation and AI tools can remove repetitive tasks and support decision-making, but they do not remove the need for human judgement in complex situations. What changes is which skills attract premium value: sense-making, empathy within professional boundaries, ethical challenge, facilitation across disciplines and the ability to translate technical insight for non-specialists. Organisations that develop these capabilities position their people as partners in improvement rather than as operators who simply execute fixed routines.
Digital channels also raise the bar for clarity and tone. Written messages lack many cues available face to face; hybrid meetings demand sharper listening and inclusive facilitation so quieter voices are not sidelined. Soft skills here mean disciplined communication habits—summarising decisions, checking understanding, following up fairly—not charisma for its own sake.
Making development stick: practice, standards and line-led reinforcement
Frameworks, competency maps and engagement surveys help you see gaps; they rarely change behaviour on their own. Lasting improvement usually combines three elements: honest diagnosis of what your teams struggle with in real work, structured opportunities to practise with expert feedback, and managers who reinforce standards through how they run meetings, set expectations and recognise progress. When line leaders model respectful challenge, active listening and well-run conversations, the organisation signals that soft skills are part of performance—not an optional workshop topic.
Evaluation can stay proportionate: look for shifts in quality of conversations, customer feedback themes, repeat issues in employee relations, and whether cross-team initiatives move faster with fewer escalations. Pair qualitative signals with the priorities in your people strategy—leadership pipelines, retention hotspots and service standards—so development spend tracks what the organisation is trying to improve. The aim is not perfection on day one, but a steady lift in how people show up when the work is difficult.
Take Effect Training are a learning and development consultancy specialising in immersive, human interaction-led experiences for leadership, management and people skills. If you want soft skills development that feels relevant under real-world pressure—not generic slides—structured practice with expert facilitation and, where appropriate, professional actors can help your teams bridge from awareness to confident, consistent behaviour.