CEOs are more concerned about the impact of a skills shortage on their business than at any point in the last six years, according to new research by PwC.
CEOs are now finding it so difficult to find people with the skills they need to grow their business that three quarters of the 1,300 CEOs interviewed by PwC rank skills shortage as the biggest threat to their business.
This represents a 10 percentage point jump from 2014 and is up from less than half (46 per cent) six years ago, says PwC.
In New Zealand, 84 per cent of respondents (up from last year’s figure of 80 per cent) say the availability of key skills is a threat to their organisation’s growth prospects.
Businesses desperately need hi-tech innovators and ‘hybrid’ workers who understand not only their own sector, but complex digital technology as well, says PwC in the report People strategy for the digital age.
CEOs are fully focused on the role digital technology plays in engaging customers; so why are they ignoring its value when it comes to engaging employees? PwC
“The digital age has transformed the skills shortage from a nagging worry for CEOs into something far more challenging,” says Scott Mitchell, PwC Partner and business adviser.
“Despite rising business confidence and ambitious hiring plans, businesses are faced with a complex and shifting world where technology is driving huge changes,” says Mitchell.
“People with strong technology skills that can adapt and work across different industries are desperately needed, but these people are difficult to find and can afford to charge a premium for their skills. New places, geographies and new pools of talent must be looked at – organisations can’t afford to recruit people as they’ve always done,” says Mitchell.
An overwhelming majority – 81 per cent – of the CEOs say they are looking for a much broader range of skills.
Unsurprisingly, the report states, tech skills are in high demand, with three-quarters of business leaders believing that specific hiring and training strategies to integrate digital technologies throughout the organisation are essential for success in the digital age.
This is creating a ‘gig economy’, where workers with the most in-demand skills can dictate where and when they work, and who they work for.
Global and virtual working continues to alter understanding of how and where work is carried out, but now a newer development has added to the mix – the rise of ‘workers on demand’, the report states.
A third of CEOs said they had greatly increased their use of contingent workers, part-time employees, outsourcing and service agreements. In other words, ‘talent’ no longer means ‘employees’ – and that has far-reaching consequences for people management
Filling talent gaps is also a major driver for mergers and acquisitions, with over a quarter of CEOs saying that access to top talent is the main reason for collaborating with other organisations.
Organisations are likewise rethinking their talent mix and exploring the potential of automation. In addition, CEOs have woken up to the value of diversity – of thinking and experience – to create value in the digital age, reports PwC.
Businesses feel that governments play an important role in solving the skills gap – six in 10 CEOs, both globally and in New Zealand, said creating a skilled and adaptable workforce should be a top priority for government.
The report, meanwhile, finds less than half of organisations consistently use analytics to provide insight into how effectively skills are being deployed.
It asks, “CEOs are fully focused on the role digital technology plays in engaging customers; so why are they ignoring its value when it comes to engaging employees?”
“The abundance of information – from both internal and external sources – is the richest possible mine when it comes to understanding the employer brand, employee engagement and what employees want and need from the organisation. The vital, and apparently missing, step is to transform the data collected into strategic advantage.”
The report calls on CEOs to make “bold decisions” and look for an HR function that “is innovative, analytical, predictive and supportive”.
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