How companies can save millions by fixing skill gaps

While the Covid-19 crisis has intensified the need for new skills at work in recent times, the process of skilling, like existing skill sets, has remained vastly heterogeneous. This was true even before the pandemic, as a 2019 Deloitte report illustrated the breadth of this problem in the context of manufacturing alone, with an estimated 2.4 million positions to be possibly left unfilled between 2018 and 2028, with a potential economic impact of $2.5 trillion. However, Covid-induced changes including organisations en masse investing in digitisation and remote work on an unprecedented scale have inevitably complicated the skill gulf.

Furthermore, this is not just with regard to digital skills, but also emotional skills, leadership, adaptability and teamwork, with new ways of working taking center-stage. Employees are now braving new realities of death, disease and restriction, causing mental distress to seep into the workplace in unique ways and patterns. At the same time, the difficulty in delivering results when conventional channels are compromised and the market turned upside down have created new skills gaps, with certain employees being more open to new challenges than others.

The skills gap obviously has to be dealt with, and it is something that firms have taken cognizance of. As per a McKinsey report, skill building is more prevalent than it was prior to the pandemic, with 69 per cent of organizations doing more skill building now than they did before the Covid-19 crisis. However, the answer to this problem is not simply imposing a broad regime of reskilling and skill building. The skills gap, to begin with, has to be understood, particularly in the context of an organization to its molecular detail.

To start with, self-assessment is the key to a comprehensive approach in alleviating the skills gap. In studying your own organization, several performance indicators, such as the time taken by employees to deliver results in the online mode, customer satisfaction, efficiency of teams in meeting deadlines and so on can be crucial.

Alongside these assessments, internal surveys and quizzes that allow employees to articulate individual concerns and problems can supplement the performance indicators. These two combined will give you a holistic view of the situation and cognizance of the exact interventions needed vis-á-vis the skills gap.

Once the extent and the nature of the skills gap(s) has been identified, the organization must go on a skilling and recruitment drive to solve what plagues organizational productivity and cohesion. These remain real challenges, as a report from The Brookings Institution and The National Center for the Middle Market illustrates. As per the study, many middle market firms lack a clear process for recruiting new employees; 59 per cent wait until there is a specific position to be filled rather than drawing upon ongoing outreach efforts. In addition, the report describes how a lack of systematic, internal training programs can make it difficult to develop talent internally.

Many firms thus find it difficult to create a 'deeper bench'–while 55 per cent of middle market firms have an ongoing training system, 45 per cent do not. In addition, 61 per cent of middle market firms do not have systems in place for internal career advancement and only 30 per cent of firms partner with educational or training organizations,

The problem is easy to discern: skills gaps barely get the budgetary attention and time allotment they merit. From self assessment to strategic recruitment to reskilling current employees, employers need to carve out chunks of the organizational funds for developing, retaining and recruiting talent. This does not need to be a particularly gigantic allocation, but a sustained investment in developing employees' skills, as McKinsey notes, in leadership, critical thinking, decision making, managing others, and advanced data analysis.

A process of skilling like this can set in motion, a powerful chain reaction that shall remedy the existing skill gaps and also decimate future emergences of the same. For instance, a critical thinking employee with effective leadership skills can be an active partner in dealing with the company's problems and can serve as both a mentor and a template for others to follow. A one-time investment in developing such soft skills and technological proficiencies can build a workforce which can empower all current and future employees through leading by example, allowing the organization to become as self-sufficient as possible.

On the whole, skills gaps need the effort they warrant. Prioritizing skilling, reskilling and hiring worthy talent is certainly an endeavour that pays off for the long-term prospects of a firm. Addressing, resolving and curbing skills gaps is a foray into augmenting the very scope of an organization, bolstering its resilience and self-sufficiency and optimizing the results sought. Thus, it is time to build new capabilities and strategically close all gaps that hinder the future of rewarding work.

(The author is Chief Impact Officer at Recykal Foundation)