Do you have the skills to compete?

The world of talent, and the value of that talent, is changing. For several years, the need for people with highly sought specialty skills affected only some organizations—in particular, those seeking employees with backgrounds in science, technology and engineering. Today the news is that skills gaps—the disparity between the skills companies need to drive growth and innovation versus the skills that actually exist within their organizations and in the marketplace—are more prevalent across most industries. Executives are aware that they need to invest more in their people’s ongoing training so that workforces will have the skills their companies will need in the coming years.

These are among the findings of a new report, the Accenture 2013 Skills and Employment Trends Survey: Perspectives on Training. For the research, Accenture surveyed 400 executives at large US companies to assess their hiring, staffing and training strategies.

The survey shows that executives are aware that they do not have the right people in place to implement new strategies, especially in the age of digital business and at a time when competition—for customers and for talent—is coming from new players almost anywhere and everywhere across the globe.

Meeting the skills gap challenge will depend on strong commitment and action across the full spectrum of talent management and HR, from new approaches to learning and training, to better recruiting and hiring techniques, to better performance management. The right strategies and tools exist; now they need to be applied appropriately to make sure the right people with the right skills are in place to meet the future needs of the business.

The skills gap is real, and it can hurt

According to the Accenture research, nearly half of those surveyed (46 percent) confirm that a skills gap persists for their business—that they do not have the skills they need to compete effectively in the coming years. Not surprisingly, few will be looking to cut the size of their workforce anytime soon: Almost two-thirds (62 percent) expect their full-time employee headcount to remain the same, and nearly one-third (31 percent) expect it to grow.

Skills in greatest demand are in IT (44 percent) and engineering (36 percent), with R&D (29 percent) and sales (29 percent) close behind. Many companies are also looking for leadership, communications, people management and project management capabilities.

Executives in some industries are especially aware of the unique challenges they face in attracting and developing talent. The development lead for a global retailer told us recently, “We have many of the hard skills we need in aggregate across our entire workforce, but if you ask whether we have the right combination of hard skills in individuals, the answer would be no. And even if we did, it’s often the soft skills—like an entrepreneurial mindset or the ability to drive change—that are missing.”

What causes a skills gap? One answer is rooted in changes in both the marketplace and technology. Companies are often competing in multiple markets and expanding globally, thus facing more complexity in hiring and training. Transitioning to a digital business has also dramatically affected the skills needed by critical workforces. Take, for example, marketing professionals, who now must master complex capabilities such as digital data mining and social media. Just a few years ago, the role of “social media marketing strategist” didn’t even exist, but today, it’s in high demand.

Along with causes, there are consequences of a skills gap. The executives surveyed see a clear link between skills shortages and a variety of negative business results. For example, 69 percent believe that a lack of critical skills will result in increased operating costs. Two-thirds anticipate a loss of business to competitors, and 64 percent expect an impact both on revenues and on reaching revenue growth objectives.

But the No. 1 impact on the company? Employee performance and productivity. We found that 87 percent of those surveyed believe that a skills gap increases stress on existing employees, who need to cope with new challenges while lacking the appropriate toolset of skills. That situation clearly affects overall productivity, something that is a major concern of executives.

A commitment to learning

One of the most hopeful signs in the Accenture skills survey is that executives are committed to training as a means of strengthening workforce capabilities. More than a third of respondents whose companies are facing a skills shortage affirmed that they had not invested enough in training. Many expect investments in training to either increase (51 percent) or at least remain steady (43 percent).

How can organizations get the most out of those investments? Here are two recommendations:

Find the right blend between classroom-, digital- and experience-based training.

Various studies have found that most organizations (60 percent or more) still rely primarily on classroom training. The classroom has a place in an overall learning strategy, but it needs to be part of what we call a “learning chain”—a classroom environment that is carefully linked and integrated with other formats, from web-based training, to follow-ups through mobile devices, to social media and other channels. Retention rates are very low when it comes to classroom learning, so reinforcement of knowledge and the ongoing application of skills are critical.

Embedding learning in everyday work can be a key to success. Our survey revealed that learning most often occurs through on-the-job experience (74 percent) and that shadowing and observing others is also important (58 percent). A number of executives we spoke with indicated that they use an apprenticeship model to help newer employees learn from more experienced ones.

Use innovative new learning channels and techniques.

More organizations are beginning to include new technologies as part of the training experience. Seventy percent of executives reported that they are currently leveraging innovative learning developments, with 42 percent using mobile delivery for training, 35 percent using social media and 13 percent using gamification, or game-based learning.

Thanks to such innovations, employees can be immersed in real-life performance scenarios and encouraged to take part in collaborative learning—all on their own schedules, wherever they are.

New approaches to hiring

When asked about the biggest reason for skills shortages, the top answer from executives was that it is difficult to attract candidates with the necessary talent. Clearly, more innovative approaches to recruiting and hiring are needed.

An important insight in this regard is that it’s no longer helpful to screen candidates based only on key words in their résumés. Such application-based screening can skew the recruiting process and cause companies to pass up top talent. One organization mentioned in the secondary literature indicated that they had thousands of applicants for an engineering position, but the staffing people said none of them was qualified—something that would appear to point to problems with the screening process rather than with the applicants themselves.

A more sustainable approach is to hire on the basis of “developable fit.” Do employees have good general skills as well as an ability to learn and respond nimbly to new opportunities? Are they interested in ongoing training and open to pursuing varied experiences as part of their development within the company? Such characteristics are better predictors of success in many cases than overly restrictive skills profiles. With training and practice, many candidates—even those outside of the industry, in other geographies, or with adjacent or overlapping skill sets—can readily be developed to perform the job.

The mismatch between skills needed and skills available is forcing executives to rethink everything from how they define jobs, to how they mine their organizations for hidden talent, to how they recruit and evaluate candidates. The Accenture 2013 Skills and Employment Trends Survey shows that executives are acutely aware that a skills gap is likely to affect the sustainability of their business—and, just as important, they are willing to take steps to close that gap.

Accenture Outlook