Tag Archives: Skills Gap

Supply Chain Management: Closing the Skills Gap

Data Point TuesdayIt’s an issue that organizations seem consistently faced with today: a lack of skilled workers that can further their growth, success, and ability to compete with competitors. This “skills gap” is explained by the U.S Chamber of Commerce Foundation | Center for Education and Workforce’s new report, as a result of education and workforce systems in the U.S that are failing to keep pace with the changing needs of the economy. So how do we remedy this talent shortage and close the skills gap? This is a hot topic among organization leaders and management, and USCCF’s report offers an interesting strategy that, while different, may be an actionable way for organizations and institutions to start remedying this challenge. The strategy proposes to apply a supply chain management approach to talent, leveraging lessons learned from innovations in supply chain management and engaging employers to expand leadership roles, acting as “end-use customers” of education and workforce systems. USCCF’s approach, dubbed talent pipeline management, is expected to provide more effective transitions for students into the workforce and improved career advancement for current workers. Talent pipeline management foresees a demand-drive approach to closing the skills gap. This approach is intended to create and share value among all partners in the talent supply chain.

USCCF’s report states that 92% of executives believe there is a serious gap in workforce skills, and nearly 50% are struggling to fill jobs. If left unaddressed, they hypothesize that the skills gap could cause more than 5 million positions to go unfilled by 2020, an issue likely to be exacerbated by increasing retirements and a shrinking workforce. Employers, however, have substantial resources they can leverage to engage this demand driven system. Employers invest upwards of $486 billion each year on training that is almost exclusively focused on upgrading the skills of their current employees.Investment in Workforce Education and Training

USCCF points to a supply chain management approach to talent recruitment and development to help organizations stay competitive in today’s economy, explaining that, “The conditions driving that perspective—such as growing business uncertainty and longer lead times to fill positions—are similar to the challenges that led to innovations in supply chain management”.

Three key foundational principles are identified as forming the basis of a demand-driven system, and provide the framework for the “talent management pipeline”:

  1. Employers Drive Value Creation—Employers play a new leadership role as the end-customer in closing the skills gap for those jobs most critical to their competitiveness.
  1. Employers Organize and Manage Scalable Network Partnerships—Employers organize and manage flexible and responsive talent pipelines in partnership with their preferred education and workforce providers.
  1. Employer Measures and Incentives Drive Performance—Employers work collaboratively with their partners to develop measures and incentives designed to reinforce and improve performance across all partners.

For employers to be successful in this strategy for talent acquisition and development, they must link their talent strategy to their business strategy:Identifying Core Capabilities

Each capability may require a different sourcing method, and USCCF’s report urges organizations to move away from talent acquisition strategies of the past like “spot marketing” through job posting and screening:Talent Pipeline Strategies

Once organizations have developed talent pipeline strategies, they should decide what can be done in-house and what should be done through external partners:Simple vs. Extended Value Chains

Once a talent pipeline network and demand planning system is in place, organizations must measure performance the of this system based on whether they are meeting the needs of the end-customer and creating value across the full network of partners, looking at factors such as time, cost, and quality across all internal units as well as education and workforce partners. Organizations can additionally support their leading providers through incentives (such as work-based learning opportunities, performance-based funding, and equipment) as well as through continuous improvement strategies.

For more detailed information on the implications of the talent management pipeline on key stakeholders such as education and workforce providers, students and workers, and policymakers, make sure to check out the U.S Chamber of Commerce Foundation’s full report.

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Filed under business strategy, China Gorman, Data Point Tuesday, Talent pipeline, Workplace Studies

Good News From Your L&D Department!

Data Point Tuesday

A 2014 report from Bersin by Deloitte, “The Corporate Learning Factbook 2014: Benchmarks, Trends, and Analysis of the U.S. Training Market” relays some positive information regarding investment in employee development. Businesses increased training budgets by an average of 15% last year, reflecting the highest growth rate in this area in the last seven years, and also likely that as the economy continues to mend, organizations are able to reinvest in areas that experienced significant cost cutting during the downturn. At a time when there is discussion of a lack of specified skills in the talent pool, this would appear to be welcome news, particularly because this investment applies not only to short term training. For mature organizations this training budget involves identifying capability gaps now and into the future and combats them by developing a “supply chain” of skills to fill gaps in the long term.Bersin by Deloitte

How much are organizations spending on these increased L&D budgets? On average in 2013, businesses across the United States spent $1,169 per learner. This amount varies by company size and industry, with tech firms leading the pack in terms of amount invested per learner (spending an average of $1,847). As far as which areas of training and development organizations are focusing their increased budgets on, leadership development takes the largest share, with 35 cents on average of each training dollar going to leadership development at all levels. This certainly suggests this is an important strategic investment for companies in the coming year. As the study reports, “more than 60% of all companies cite leadership gaps as their top business challenge”.

Spending on L&D initiatives is likely to be higher for organizations with a more “mature” L&D function. Those ranked at either 3 or 4 on Bersin by Deloitte’s maturity model spent an average of 37% more on training and development than the least mature organizations. Here at Great Place to Work, we can certainly attest to the fact that organizations on the FORTUNE 100 Best Companies to Work For list invest significantly in training and development programs. In 2013, companies on the list offered 66.5 hours of training annually for salaried employees and 53 hours of training for hourly employees, with close to 70% of those hours devoted to employees’ current roles and nearly 40% focused on growth and development. Though they display impressive training and development programs, many of these Best Companies cited employee development as remaining an area of focus, with 3 key areas highlighted: Leadership Development (reflecting the data from Bersin by Deloitte), Career Road-mapping, and Diversity Development.

This investment trend is good news for employers and employees alike. Employers will have greater inventories of skills in-house and may not have to turn to the marketplace as often – or expensively – in coming years to support basic business operations. Additionally, by providing skills development to younger workers who are arriving with significant skills deficits, employers may be staunching the early talent drain from their organizations. And employees of all ages continue to need growing support to expand their knowledge and skill bases as the world of work continues to evolve and certain skills het harder and harder to find.

But the opportunity to develop management and leadership skills may be the most valuable investment for both sides of the employee-management relationship. It prepares the next generation of organizational leaders, it communicates a commitment to employees’ futures and it strengthens the ties between these two sides of the employment equation. That high performing employers are spending 40% of corporate learning dollars on their future leadership talent would be a compelling component of any employer’s employee value proposition.

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Filed under Bersin, China Gorman, Data Point Tuesday, Deloitte, Great Place to Work, Leadership, Learning/Development, Skills Gap, Talent development

Careers and Learning: a New Reality

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This, from Kelly, really hits the nail on the head:  “The last two decades have radically altered the way skills are acquired and developed. Skills are no longer “front-end loaded” onto a career. Rather, they are characterized by lifelong development and renewal. Most skill sets have a finite life.”

Skills are no longer “front-end loaded” onto a career.

But who recognizes this really? Employers who lament that they can’t find the skills they need in the workforce? Students who report being less than adequately prepared to enter the economy? Unemployed workers who can’t connect to a new employer?

Most skill sets have a finite life.

This has never been truer than today – and the “lives” will be getting shorter and shorter.

In their recent Global Workforce Index™ report, Career Development and Upskilling, Kelly looks at survey data from 120,000 people (workers, presumably) in 31 countries and has some very interesting data to share.

For example, most workers believe they are proficient in critical “soft skills” but Bilingual skills, Leadership/initiative and Creativity/innovation were all seen as needing development. Employees believe this of their skill sets. And most business leaders would not argue with these areas of deficit. Of note, however, is the belief on the part of employees that they have good mastery over the most critical “soft skills.” If true, perhaps learning budgets (such as they are) could be better deployed. If untrue, some challenging performance conversations need to be held!

Kelly Global Workforce Index April 2013 Critical SkillsOf course, in terms of the skills gap, most attention is being paid to STEM workers.  Interestingly, these workers believe that their proficiencies in the most important skills sets of Analytical/critical thinking, Evaluation, analysis and troubleshooting, and Complex problem solving are solid (no lack of self-esteem in this group). Where they might need development are in the more complex technical side of things: systems, computer, software and mathematics, calculations, measurement and monitoring.

Kelly Global Workforce Index April 2013 Critical STEM SkillsIf lifelong learning really is the reality, then self-driven learning will be key.

And if self-driven learning is key, then a realistic assessment of current skill levels and actual skill gaps will be critical. For everyone:  employers, employees, learning providers – everyone!

These observations based on their survey responses seem common sense and almost obvious. Almost. I think most business leaders – and HR professionals in particular – would agree with Kelly that skills are no longer front-end loaded onto careers. They’d also agree that most skills have a shelf life.

But it doesn’t appear that we’re approaching the answers to the skills gap as a systemic shift in the nature of careers. We’re approaching it as a simple supply vs. demand dynamic – if we approach it at all. Perhaps this data can shift the conversation and approach to a more useful and motivating discussion:  the nature of careers has shifted and so the nature of education and employment needs to shift as well.

Then we might make actual progress in addressing the perceived mismatch between the jobs available and the skills in the existing talent pool.

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Filed under Career Management, China Gorman, Data Point Tuesday, HR Data, Kelly Global workforce Index, Kelly OCG, Skills Gap, STEM