How Can Employers Reconcile the Paradox of Reduced Demand and New Skill Development in Today's Labour Market?

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The labour market is currently facing a paradoxical situation, characterised by a delicate balance between reduced demand for certain skills (as highlighted in a recent report by KPMG and The REC), and the urgent need for new skill development and creation.

On one hand, organisations are experiencing a slowdown in hiring decisions amidst economic uncertainties, leading to a reduction in demand for certain roles and skills This is often accompanied by a culling of obsolete talent as businesses streamline operations and adapt to changing market dynamics.

However, amidst this reduction in demand, there is a pressing need for the fulfilment of new skill development and creation. Rapid technological advancements, coupled with evolving industry requirements, have resulted in a demand for novel skills and expertise across various sectors, particularly in STEM fields (not mentioned in the headlines but the KPMG report also makes reference to demand for engineering, medical and care professionals still outstripping supply). Organisations are faced with the challenge of identifying and acquiring these emerging skills to remain competitive in the ever-changing marketplace.

In response to this paradox, organisations must adopt a strategic approach to talent management and workforce development. This involves:

• Strategic Workforce Planning: Organisations need to anticipate future skill needs and align their workforce planning efforts accordingly. This may involve identifying emerging skill gaps, forecasting talent demand, and developing talent acquisition strategies to attract individuals with the required expertise.
• Reskilling and Upskilling: Rather than letting go of obsolete talent, organisations can invest in reskilling and upskilling initiatives to retrain existing employees for emerging roles and technologies. By providing continuous learning opportunities, organisations can empower employees to adapt to evolving job requirements and contribute to business growth. Many organisations are still unaware that funding can be drawn from their apprenticeship levy pot to finance degree and masters level apprenticeships for existing staff, not just new hires.
• Collaboration with Educational Institutions: Partnering with universities and educational institutions is essential for addressing skill shortages and fostering new skill development. As well as tapping into cutting edge training and development to upskill the existing workforce, there are also opportunities to collaborate on curriculum development, internship programs, and research initiatives. Symbiotic partnerships allow organisations to stay relevant, enable them to access instant talent and help to ensure that the future talent pipeline is equipped with the skills needed to meet industry demands.
• Emphasis on Soft Skills and Attributes: In addition to technical skills, forward thinking organisations are beginning to prioritise the development of attributes such as resilience, adaptability, and creativity. These skills are essential for navigating uncertainty and driving innovation in a rapidly changing business environment. At Coventry University, we’ve been through a process to create an “attributes framework” which has been embedded into all aspects of curriculum delivery and our service provision to students, so the entire university experience helps to instil these attributes, helping to ensure that Coventry University graduates offer the full package to potential employers. So successful is this approach that we are also working with a number of our industry partners to help embed the attributes into their talent acquisition process and across their entire organisational cultures.
• Diversity and Inclusion: Embracing diversity and inclusion initiatives can help organisations tap into diverse talent pools and foster a culture of innovation. By welcoming individuals from different backgrounds and perspectives, companies can leverage a wide range of skills and experiences to address evolving business challenges.

While changing employment landscape dynamics will continue to throw up ever more complex and ambiguous challenges, by embracing some of these strategies, organisations can lead the way in adapting to these challenges, fostering innovation and remaining competitive.