How To Tackle The Global Skills Shortage

How To Tackle The Global Skills Shortage

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Overview

Employers are increasingly struggling to find the skills they need among the global talent pool. The inability to attract and retain talent ranked fifth on Aon’s global 2015 Global Risk Management Survey, and came in second place in North America and the Asia-Pacific region. It is a growing challenge worldwide, affecting industries from construction to finance, with jobseekers lacking the required skills, and those with the desired capabilities and experience facing increasing competition for their talents, putting pressure on wages and benefits.

At the same time, young people around the world – most notably in Europe – have been finding it harder to get onto the career ladder. A recent UN study found that youth unemployment worldwide has stabilized at around 13 percent – well above pre-crisis levels. But this doesn’t give the full picture – almost 43 percent of the global youth labour force is either unemployed or working, yet still living in poverty.

These twin challenges are prompting new approaches to workforce planning that may help tackle both problems. To find out more, The One Brief spoke to Usha Mirchandani, Partner, Talent Analytics at Aon Hewitt.

In Depth

The skills shortage

The inability to match those seeking jobs with vacancies available is in large part because jobseekers’ skills don’t match employers’ needs. As new technologies emerge and impact multiple sectors, employers are increasingly seeking people with skills and experience in digital and data and analytics. “The nature of work has been radically changing. And the tools for the work have been radically changing,” says Mirchandani.

Increasingly, businesses are in of need people with skills, and frequently combinations of skills that have not previously been aligned, like analysts with coding abilities, or medics who understand statistics. “They are looking for super-specialized skillsets. They are not looking for traditional people,” Mirchandani says.

Banking and financial services are good examples of sectors that have seen an increasing demand for people with more than one set of skills and experience. Organizations are increasingly in need of people who aren’t just experts in their respective fields, but who also understand technology and data analytics. “The convergence of these two skills is seeing the way businesses deliver their services start to change,” says Mirchandani. The new approach is driving a revolution in the way organizations are approaching their operations, but the lack of a candidate pool with this combination of abilities can threaten an organization’s ability to adapt, grow and compete.

Growing and ageing populations are also increasing demand for skilled workers in healthcare and construction, says Mirchandani. “These are the areas where organizations need specific skills. But comparing that to the kind of workforce that’s entering the job market now – we’re starting to see a continuing and ever-increasing gap.”

Millennials and Generation Z: Challenges and opportunities

Today’s graduates continue to move away from Science, Technology, Engineering and Mathematics (STEM) fields that are most in demand by employers. As a result, competition for those with the in-demand skillsets is booming, while those without the necessary training are finding it harder than ever to find jobs.

Compounding the challenge for young jobseekers is the rise of a more mobile and global workforce. Now that an increasing number of skilled jobs can be done remotely, and emerging markets are increasingly focusing their education systems on exactly the STEM skillsets that are in demand, competition for work is becoming increasingly tougher.

There is hope, however. “Today’s early career individuals are entering the workforce with these emerging skillsets,” says Mirchandani. Millennial and Generation Z jobseekers are digital natives, with a built-in knowledge of skills that are increasingly in demand from employers. These groups have the potential to educate an aging workforce that may still struggle with digital technologies.

The need for these skills is unlikely to go away. To keep up with new technologies and approaches requires continual learning and adjustment, which makes ensuring that employees of the future have the necessary skills and mindsets to adapt, increasingly important.

New approaches to building a talent pool

When it comes to workplace skills, it can take some time for supply to adjust to demand. Education and training can take years, and the rise in demand for digital and analytical skills in recent years has been so rapid that even today’s digital native graduates have found themselves leaving education without the skills employers are looking for.

As such, businesses need to rethink their talent acquisition strategies.

Many of the world’s largest companies and technology firms are starting to look beyond the next hire. Mirchandani explains, “It’s not a passive ‘We’ll figure it out when we get to it,’ as we may have experienced with the current skills shortage. Instead, it’s ‘We know there’s going to be a skills shortage – what can we do differently to address it?’”

This can mean looking as much as a decade into the future, using sophisticated analytics to project both future needs and future availability of skills across multiple locations. If certain markets are more likely to see an availability of skills, companies are more open to having this data influence and guide their location plans to better ensure their access to these increasingly in-demand resources.

Some firms are also actively looking to adapt and evolve their existing knowledge by setting up programs to share expertise between generations.

Another approach – and one that is likely to become far more common over the coming years – is to get more actively involved in encouraging the students of today to develop the skills that organizations will need in the future.

This goes far beyond on-the-job training or apprenticeships – although these are also likely to become increasingly popular. It can be about businesses spotting talented young people far earlier than career development work has traditionally been conducted to encourage the next generation to develop the skills that our future will need.

“Companies looking for sophisticated skillsets are starting to look to foster skills and relationships with future employees among high school age students through contests and scholarships,” Mirchandani says. And while you may not need to go to these extremes, “If you’re not already thinking five to ten years ahead for your talent needs, you need to.”

With the pace of technological change as fast as it’s ever been, if your organization isn’t already doing this, it may be time to start investigating a more proactive, further-reaching talent strategy.

Talking Points

“We know that today’s youth do not face an easy labor market transition, and with the continued global economic slowdown this is likely to continue. But we also know that greater investment in targeted action to boost youth employment pays off. It is time to scale up action in support of youth employment.” – Azita Berar Awad, Director, International Labour Organization Policy Department

“We’re working… to get children interested in coding at an earlier age. That doesn’t mean that everybody will become a programmer, but introducing coding to younger children helps to improve their maths and English skills. You can introduce the concept of an algorithm to a five year old by talking to them about putting sentences in order or how you need to follow the steps in a recipe one after the other in order to bake a cake. If children like computers then you can tease them into becoming more interested in maths too.” – Steve Beswick, Senior Education Director, Microsoft UK

Further Reading