Bridging the Skills Gap: How to Future Proof Your Workforce
According to Monsters’ Future of Work 2022 Report, 91% of employers are struggling to fill positions due to the “skills gap” and there’s no reason to believe this number will improve any time soon (it already increased by 3% from 2021).1 As business models continue to evolve in response to rapid digital disruption and technological advancement, the mismatch between the skills companies need and the ones that their employees have—i.e., the skills gap—will not go away. In order to survive, let alone thrive, employers must learn how to bridge this gap.?
Is your organization being negatively impacted by the skills gap? Statistically, there’s only a 9% chance that your answer is “no.” In the course of this article, we will look at its causes and effects, then move on to assessment and solutions.?
The Causes and Effects of Skills Gaps?
As stated above, a skills gap represents the disparity between the desired and actual skill sets in an organization, team, or individual. While this has always been an issue, technological advancements in the past decade has created new sectors, markets, modern workplaces, and more interconnected global economic systems than at any other time in history. As a result, workplaces and careers are changing faster than ever—many careers that didn’t exist decades ago are now flourishing and in high demand.?
In short, the skill sets needed by employers are constantly evolving. This problem is exacerbated by an educational system that focuses primarily on theoretical knowledge and hasn’t adapted to rapid digital transformation, meaning that even freshly graduated employees may not have the skills your company needs. Additionally, COVID-19 lockdowns, a massive shift to “work from home,” and the resulting Great Resignation have led to a modern workforce that’s constantly on the move.?
Skills shortage can have a significant negative impact, not only within organizations but also on the labor market and economy as a whole. The aftereffects include organizational revenue loss, increased costs of services, and loss of productivity or production due to limited competencies and unfilled jobs. One study predicts that by 2030, there will be a global human talent shortage of more than 85 million people, or roughly equivalent to Germany’s population. If left unaddressed, the shortage could account for about $8.5 trillion in unrealized annual revenues4.
It's important to understand that neither these causes nor effects of the skills gap are transitory—this problem will not solve itself. If your company does not take proactive steps towards bridging the gaps, it will undermine your productivity and overall bottom-line growth. Furthermore, bridging the gap ahead of your competitors will give you a significant advantage in your industry but failing to do so can put your company at great risk of losing revenue to them.?
Reducing the Skills Gap
Historically, the standard tactic has been to hire new talent. But, between the labor shortage, insufficient educational system, and growing skills gaps, this tactic is becoming less effective—there are fewer “plug and play” employees available. Today, there is no one fix. Organizations are now taking proactive steps to address their workforce needs through a mix of web-based freelancers, recruiting new talents, and upskilling/reskilling current employees into new roles.?
In this environment, we believe companies need to make the most of their already existing talent.2 It is frequently more cost-effective and productive than hiring new employees and existing team members possess the additional advantages of already knowing the company’s culture and having a track record.??
Skills Gap Analysis
By conducting a skills gap analysis, your company can bridge the gap by looking first at your existing talent and then determining where to hire and where to outsource. This can save you money while creating a more effective workforce.?
A skills gap analysis begins by assessing the scope of your gaps. Without this, you’re likely to spend a significant amount of time and energy plugging holes while ignoring underlying issues. Next, it evaluates your current talent capabilities, giving an overview of employees’ present knowledge and competencies. Next, it determines where and how they need to improve to meet pressing and future business needs.? Finally, it redesigns jobs and identifies learning and development pathways for individuals, teams, and the organization.?
Clearly, a skills gap analysis represents a significant investment of time and energy, so not every company needs to conduct one. It’s a question of how great of a gap you’re trying to bridge. If it’s the organizational equivalent of a ditch, just hiring one or two people will probably be the easiest. But if a major divide is preventing your company from moving into the future, failing to carefully evaluate and engineer big-picture solutions and assess your existing resources will almost certainly cost you far more in the long run.?
Steps to Conducting an Effective Skills Gap Analysis
An effective analysis cannot be accomplished by a single HR person making best guesses. Begin by identifying the key stakeholders who should be involved, creating a realistic timeline, and allocating necessary resources. Build a team to take responsibility for the analysis and that will present the findings and recommendations to management. If your company is larger or more complex, consider contracting with an external evaluator.
We strongly encourage engaging stakeholders at various levels to gain invaluable insights and foster “buy-in.” For instance, executives and management will typically have a clearer understanding of the big picture, the company’s current state, where it is going, what needs to improve, and the overall bottom line. Teams and individuals, on the other hand, will typically have a better sense of the skills needed, the actual state of the workforce, and how changes will be received.?
2. Map Business Goals
领英推荐
This step identifies the business’s current and future goals, then compares them with the skills of your existing workforce as a whole. The following must be taken into consideration:?
This step is complete when you have a clear sense of where the organization currently is, where you want to be in the future, and what you need to get there.?
3.? Future Proof Your Workforce:?
It’s impossible to predict the future, but making educated guesses allows you to remain competitive and thrive by anticipating trends, embracing new industry practices, and adopting technologies as they emerge. Evaluate what your industry is likely to look like in the next five years by both staying current on industry and tech news and also by observing the changes that have happened in the previous five years.?
There should be detailed and informed plans to make provisions for fast-paced digital adoption, technology evolution, and future work trends.
4. Evaluate Current Skills and Capabilities:?
After identifying the skills that your organization needs and considering the future, the next step is to evaluate each employee’s skill level.
5. Analyze and Identify the Gaps?
After all, the information is gathered, compare the gaps between existing skills and those needed to achieve your company’s goals. Analyzing this information will help you better understand your current challenges, identify hidden issues, and anticipate future problems.?
6. Act on Findings
Obviously, you’ll want to address these skills shortages as quickly as possible, but it’s prudent to create a priority list that accounts for both the urgency of the gap and the cost of bridging it. In some cases, you’ll find ways to automate the process or outsource it. In others, you may need to hire someone with the required skills. But be sure not to overlook your current team.? Can your urgent skills shortages be bridged through employee reskilling programs??
Looking Forward
Now more than ever, it’s crucial for organizations to evaluate and address current and future skills gaps to ensure their workforce remains able to achieve their business goals. A systematic process of continuous skills gap analysis can help your organization gather the necessary information to identify and bridge gaps while maximizing your budget. By being proactive, you’ll be able to protect yourself from hiring challenges by harnessing one of your great assets: current employees who have proven themselves and already know your company’s culture. Prioritizing their development will help your company thrive and also improve employee productivity and retention— 76% of employees are more likely to stay with a company that offers continuous training.5?
The skills gap is one of the greatest challenges facing many businesses, but, with deliberate analysis, it offers an opportunity to build a formidable team and future-proof your business.
***********
Kuvora is a professional services company that helps companies with their digital, human, and operational needs. We assist our clients in making informed decisions today that will impact the future. Find out more about what we do here: kuvora.com