It’s a tale as old as time, we don’t have enough skilled workers for the tasks that need to be done. We often hear business leaders say that they don’t have the right talent for their digital transformations, cloud strategies, AI adoption and other technological revolutions. The importance of this issue cannot be overstated. For companies, it’s not merely about filling vacancies; it’s about fueling innovation, ensuring competitive positioning, and driving growth in an increasingly complex marketplace. A deficiency in skilled labour impacts productivity, stifles innovation, and constrains potential business expansions. With organizations pushing the boundaries of what’s possible, the need for specialized skills has grown exponentially.
Therein lies the crux. Specialist skills are particularly tricky to build, at speed (since their half-life is often shorter than transferrable power skills) and at scale, because businesses worldwide need technical skills.
Several factors have led to the current shortage of skilled workers including an aging workforce and brain drain, without enough skilled young workers to replace them. The rise of AI and other innovations is increasing the demand for specialist technical skills. There’s globalization too, which is intensifying competition for skilled workers around the world.
However, the biggest issue in many organizations is not knowing what skills they currently have and what skills they need.
It’s a foundational element that stops all other build/buy and automate decisions from being truly effective.
Identifying what we have and what we need
The large majority of companies worldwide (87%) are aware that they either already have a skills gap or will have one within a few years, according to McKinsey & Company. But where in the organization are these gaps?
A company’s first step in analyzing its skill gaps should be a meticulous evaluation of the required skills and present skills in an organization. Too often individuals are reduced to their resumés, their past positions, and their diplomas from over 20 years ago and not what skills this individual can put to work today. Hence, often the shortage is partially just on paper since individuals’ skill portfolios are reduced to their current role and they are not seen in what they could apply at work today. Many companies might think they lack key skills, while they are sitting undiscovered somewhere in their company.
A skill-based role design unlocks a lot of this potential because people are decoupled from the ‘job’ construct. Put another way, they are freed up to work on the projects and tasks that best suit their skills and career goals.
There are a host of software, tools and assessment methodologies that can power the skills-based approach. Consolidating this into a single source of truth, something that’s actionable by HR, managers and other leaders, is the key.
Once you understand the current state of skills in your workforce, you can then do some forecasting into what skills you’ll need to build and buy ready for 1, 5 and 10 years down the line. Strategic foresight combined with industry analysis and trend forecasting can give businesses a relatively clear picture of where the industry is headed and the skills it will demand.
Your next decision: Buy or build?
Many organizations fall back on ‘buying’ talent when facing a shortage. But this is unsustainable in the long run because every employer is doing it. In fact, 9 out of 10 employers are struggling to fill jobs – so the ‘answer’ is already failing many businesses.
Of course, hiring will always be a partial solution, combined with upskilling and reskilling from within and accessing the contingent workforce. But it isn’t the be-all anymore. Organisations need to be creative in getting the right skills in the right place at the right time.
4 fresh ways to solve the skills shortage
- Unlock alternative talent options
Skills-based hiring approaches can uncover hidden talent you otherwise may not have considered, such as someone with the right skills built through a side gig, or someone who has been upskilling outside of work through coding bootcamps and virtual IT labs.
- Validate skills beyond the CV
The CV offers a snapshot of someone’s potential skills but it’s up to you to ensure they genuinely possess them ready to hit the ground running. Interviews can’t really tell you this with full confidence. Nor can qualitative assessments of work by hiring managers. The only way to truly know if someone is job-ready is a performance-based scenario that tests their skills in the real-world applications they’re going to be using every day.
- Bring in external expertise when needed
When strategy and market conditions change faster than you can hire, it can help to quickly get in firepower in the form of consultants and other experts who can immediately weigh in with their expertise, a good example is the engineering firm Zühlke. Many innovation-driven businesses turn to such firms to extend their R&D teams temporarily to explore new business fields and to build core competencies for the business. This collaboration allows them to build novel products, remain agile, and later transition the project back in-house once the capabilities are more defined.
4. Upskill with the real world in mind
Companies are spoilt for choice when it comes to training in the 21st Century, but not all learning is equal. Employ an experiential approach where learners can practice their skills over and over again, getting feedback to improve and then be offered further opportunities to stretch their skills. It’s a more active learning style that gives learners confidence that they can apply their new skills to their jobs.
Automate = Enhance, not Replace
Deloitte research suggests that smart, data-driven machines could replace up to 90% of known jobs by 2030, transforming our work and augmenting workers.
Humans will continue to work in the age of AI, but their skills will look very different to what’s needed today. The WEF already defined a few around AI and I am sure many others will soon follow.
Automation, when appropriately implemented, doesn’t replace workers but complements their efforts. It allows companies to streamline processes, increasing efficiency and reducing the dependency on highly specialized skills for repetitive tasks.
When looking to automate tasks in the workplace, again skills come to the forefront as a deciding factor. Can the task be easily computerised or does the algorithm lack the ‘skill’ to complete it? Human/machine teams will be all the rage in the coming decade, but only when their combined abilities work seamlessly together.
Of course, that means human skills need to keep up with AI advances and new features.
A multi-faceted challenge requires a multi-faceted solution
The skilled worker shortage is a multifaceted challenge that demands a proactive and strategic response from organizations. It’s not just a macroeconomic issue but a call to action for companies to reassess and reinvent their talent management strategies.
Understanding the skills within the organization and how effectively individuals can perform them is crucial. By identifying and validating skills, anticipating future needs, and adopting a blend of ‘Buy, Build, or Automate’ approaches, businesses can navigate this shortage with greater clarity and resilience.
