How to brace your business for the digital skills shortage
Technological advances are transforming the way we operate at an astounding pace. However, employees are failing to keep up with the advancements, and slowly falling behind. As a result, we are seeing a growing digital skills shortage that is directly impacting businesses worldwide.
In this article, we will look at what the digital skills shortage is and provide sound ways employers can tackle it.
Digital skills shortage
The ongoing digitalization is changing how businesses operate. New technologies and rapid technological advancements are shifting the work environment. As a result, to remain employable, the modern employee is expected to possess basic digital skills which quickly become outdated.
While the demand for digitally skilled employees continues to grow, the number of digitally skilled employees remains low. In the UK, for example, 36% of the workforce could not complete one task of the five skill categories in Essential Digital Skills for Work. A similar issue arises in the USA, where one-third of workers lack the necessary digital skills.
The digital skills gap became more noticeable during the Covid-19 pandemic when businesses shifted their operations online. As operations moved to continue delivering services to customers, the need for digitally skilled employees increased.
When addressing the global digital skills gap, it is crucial to keep social inequalities in mind. The Digital Skills Gap Index 2021 found a strong correlation between socio-economic gaps and digital poverty, enhancing the disparity between high and low-income families.
Thus, businesses should approach the global digital skills gap holistically, addressing both digital and social inequalities. Organizations need to focus on making reskilling and upskilling available to all employees. Their strategic approach to building the right skill sets and governments’ transformation of education systems, will expand the digital economy.
The skills shortage is not a joke; it has real implications. As of January 2022, 71% of CEOs believe the growing skills shortage is one of the biggest business disrupters. For example, the USA, the leader in tech, could lose out on $162 billion of revenue annually unless itaddresses the talent shortage.
If businesses do not address this issue, then by 2030, there will be a global human talent shortage. The recent report published by Korn Ferry estimates that more than 85 million people will lack the necessary skills, resulting in $8.5 trillion of unrealized annual revenue.
There are steps you can take to address the global skills shortage.
Upskilling your workforce
The most obvious solution to the talent shortage is upskilling the existing workforce. If you are a business owner, prioritize your employees, and give them opportunities to become digitally savvy.
The Fortune/Deloitte CEO Survey of Summer 2022 found that 62% of CEOs believe that delivering training to empower and engage workers is crucial in tackling the digital skills gap. This applies to all employees, not just those in managerial positions.
To help workers stay employable, businesses should consider introducing lifelong training and upskilling programs. The digital transformation, with its new technologies, will continue to disrupt how we work, transforming business models, and resulting in lifelong learning being more critical than ever.
Upskilling initiatives should start with mapping the current skills landscape in your company.
Reskilling your workforce
Emerging technologies are great as they automate everyday tasks and simplify our workday. However, they are also making skills obsolete. Modern employers are seeking workers who are versed in digital technologies and possess different types of skills than previously sought.
It is becoming almost impossible for HR recruiters to find new employees with the right set of digital skills. As Gartner TalentNeuron™ reported, “Nearly one-third of the skills listed as part of a job posting in 2018 are obsolete in 2022.”
The World Economic Forum report identified the leading skills in the upcoming years:
- critical thinking and analysis,
- and active learning
The McKinsey & Company report expands on this, identifying 56 crucial skills needed to close the global digital skills gap. The digital skills are split into: digital fluency and citizenship, software use and development, and understanding of digital skills are among them.
To close the global digital skills gap businesses estimate that around 40% of workers will require reskilling. What is promising is that 94% of business leaders believe employees will pick up new skills on the job.
When it comes to closing the global digital skills gap, the resistance to reskill and upskill falls within the top three challenges. Thus, it is up to organizations and governments to create a work environment where employees are encouraged to learn new skills to close the skills gap.
How to remain competitive during digital transformation
As the saying goes, “a company is only as good as its people”. So, to remain competitive, companies need to focus their efforts on creating and expanding learning and development initiatives.
A recent Salesforce report found that employees feel more productive (74%), more engaged (72%), are happier with their work (69%) when their employers invest in digital inclusion efforts. Companies that invest in reducing the skills gap see a higher retention rate; even up to 66% of employees are more likely to stay.
We are living through the Great Resignation, an ongoing economic trend where employees are resigning en masse. The Society for Human Resource Management reports that on average it costs a company 6 to 9 months of an employee’s salary to replace them.
To put this into perspective, if the employee being replaced earns $60,000 annually, that comes to $30,000 – $45,000 in recruitment and training costs. On average, learning and development cost a company anywhere between $1,000 to $1,300 per employee.
Investing in digital skills needed, creating learning and development platforms, and engaging employees in upskilling and reskilling long-term become more cost-effective, and wise business decisions.
Here, we are only talking about the operational benefits, do not forget the positive effects of retention on employer morale and branding. Creating a positive work environment will attract more driven and motivated employees, meaning your organization will continue to grow and prosper.
Bridging the skills gap through tailored learning
An agile approach is the most effective way to address the growing skills gap. Organizations should begin by identifying the skills integral to their growth and lead with them. As a result, you are addressing the short-term needs without breaking the bank and creating solid foundations for a culture of learning.
TalentScore can help business owners and HR specialists quickly and seamlessly screen candidates through real-life work sample tests. As the global skills shortage continues to cause disruptions, DevSkiller TalentScore reduces Time to Hire. Instead of putting efforts into unnecessary interviews, focus on what is important, the candidates that are already a fit for the role or have prerequisite skills you can build on.
If the initiatives prove successful, organizations should begin scaling them, but always look at the broader picture of the whole company. Companies introducing new technologies should also introduce skills training to ensure workers feel confident in using the technologies.
Once you have hired the right staff at the correct levels, it is crucial to focus on upskilling and reskilling your existing staff.
One of the easiest ways a business can broaden employees’ digital expertise is through skills management solutions like TalentBoost. TalentBoost will help you assess employees’ digital skills, as well as identify and close skills gaps. As a business owner or HR specialist, you can quickly and seamlessly identify priority areas in which employees can upskill, to continue growing with the company.
Measured outcomes enable progression
Companies are result oriented, be it quantitative or qualitative outcomes, they want to see the added value of every project they sign off on. Learning and development are no different. This is especially crucial when it comes to budgeting, whether to cut or increase the budget.
Organizations need to identify measurable desired business outcomes before and after the learning and development program is introduced. This allows organizations to assess whether the learning and development program was successful. Measurable goals help tailor the program to achieve the desired outcomes.
It’s impossible to accurately track the effectiveness of your efforts without first mapping the skills landscape in your organization.
TalentBoost gives employers direct insight into employees’ digital skills development. Not only are you able to identify priority areas to upskill your employees, but you can also track their progress in developing new skills. As the owner, you have complete visibility into your employees’ progression, from the initial screening to earning new digital competencies.
No matter how good a business is, its success depends on the employee’s skill set. If employers do not act now, they will feel the negative impact of the global digital skills shortage. But you are not alone, DevSkiller can help guide you through the entire journey, from recruitment to reskilling and upskilling.
Find out more about how DevSkiller TalentBoost can help you prepare for the digital talent shortage