McKinsey Global recently released their findings from a survey they conducted across 700 organizations to understand how they're dealing with the ever-increasing skills gap. To no surprise, the urgency of addressing the skills gap is shared across all organizations, in all industries.
While these leaders are addressing the skills gap with varying approaches that fit for their unique situations -- such as Redeploying, Hiring, Contracting and Releasing -- the action that stood out most in the survey results was Skill Building. In fact, 69% of the respondents said they increased their activities to build employee skills in 2020, compared to only 7% who said they were doing less of it.
So which skills are companies focusing on? McKinsey breaks them down into three categories: Social and Emotional (ex. leadership, adaptability, interpersonal), Advanced Cognitive (ex. critical thinking, decision making, project management, statistical skills, complex information processing) and Technological (ex. basic digital skills, advanced data analysis, advanced IT skills and programming). Of those, they highlight that basic digital skills are the clear priority, although advanced industries and industrial organizations had less of a focus on building basic digital skills in 2020, likely because the skills were already present. McKinsey also pointed out that organizations in public and social sectors, as well as healthcare and pharmaceuticals, were the ones especially interested in building interpersonal skills and empathy.
McKinsey uses the term Skills Transformation to describe the process of bringing your team's skills to where they need to be to meet the organization's needs. They say that those doing it well are seeing other positive impacts such as an increased ability to realize company strategy, increased performance and satisfaction among employees, plus and improved reputation as an employer. That said, the process is not simple to get right and the management consulting firm recommends a three-phase process consisting of Scouting (identifying your company's skills gap), Shaping (designing a program to close the skills gap), and Shifting (execution and delivery of skill building efforts).
What Does This Mean for Employers?
Given the skills gap that exist in the market as well as within organizations, it is important for organizations to be both aware and purposeful. Aware of their own team vision, hiring needs/plan and understanding the realities of the market. Purposeful in the sense that planning and execution of a labour strategy should meet the goals for both the skill sets hired as well as the timelines that have been set. Getting ahead of the hiring curve will be very important as time-to-hire for key skill sets may be more challenging and take longer than would be expected.
Some questions to consider that will help with workforce planning are: Do you know your own skills gap and what is your plan to address it? How do contractors fit into your plans? Are you best to build skills within your own team? And, is there an opportunity to shift people around within your team(s) to development them across multiple functions?
Of course, the other consideration beyond talent acquisition is talent retention. Eagle has posted blogs on this subject, including this one that covers hiring, firing and retention. Attrition can seriously impact workforce plans and jeopardize an organization’s ability to execute effectively. Competition locally, regionally, and globally will be a threat... one that will need to be managed.
What Does This Mean for Contractors?
For contractors and consultants, what this means is if companies want these skills for their employees, they are also going to expect them from their contractors. Most seasoned contractors have the technical skills nailed down, but what almost everyone can improve on is focusing on their leadership/interpersonal skills and working on their critical thinking/strategic capabilities.
Additionally, McKinsey’s research concludes that a top priority for companies is to develop and improve their team. While it may seem like a threat to contractors, it is actually an opportunity for you to build value by taking on more responsibility for providing skills transfer and training staff so that, when you have completed your assignment, you leave them with more knowledge than when you arrived. This is important to remember and should be incorporated into your “selling messages” when you are interviewing!