IDC Roundtable Executive Briefing: Tackling the skills gap

The following content was discussed during an IDC Virtual Roundtable in November 2021 in association with Pluralsight.

Introduction
Digital transformation has been a driving force for European organisations over the past few years, and it has by no means been stopped by COVID-19.

What is interesting, though, is that the pandemic has made organisations realise that having access to the right tech and digital skills at the right time is critical for a digital transformation journey. And that to attract and retain talent, it is important to have a professional development culture.

A lack of skills has a negative effect across a whole range of business
performance indicators. An IDC survey from April 2021 of more than 500 European organisations, showed that profit growth, innovation, and employee productivity to name a few are all impeded by the lack of skills and that, on average, organisations' transformation journeys have been delayed by more than 8 months. There are potential dire financial consequences of this. If nothing dramatic changes to narrow the skills gap, IDC estimates that by 2025, the lack of skills will cost European organisations €188 billion, which is roughly the GDP of Greece. This comes from delayed product releases, reduced customer satisfaction, and general loss of business.

However, when an enterprise has resolved the resource issue for an effective digital transformation program, the benefits can be significant in terms of growing revenues, improving customer satisfaction, driving operational efficiencies, and accelerating innovation.

So, what needs to be done?
What actions should be considered? The Roundtable discussions focused on some key questions:

• How do you ensure that you create a close link between your skills
  strategy, the business strategy, and your digital transformation road
  map?
• If you lack specific tech talents, where can you source these? Is
  recruiting and reskilling talent from the line of business a viable
  option?
• What tools and methodologies do you use to assess and match the
  skills you have available in your organisation, ensuring that these
  align with the strategic priorities of your business?

The discussions showed that it's not easy to ensure that there is a close link between the skills strategy, the business strategy, and the digital transformation road map. But to be successful, it's essential that there is a strong connection to the organisation's overall people strategy. As a participant from a utilities company put it: "What's important is how to connect the business strategy with the people strategy from HR and the learning strategy to answer the following questions: What can we recruit? What do we augment (with contractors)? And what can we build?"

Organisations are exploring all avenues to find the tech talent that's needed. Most are looking to hire for some positions but are finding it hard. So, the predominant strategy for the participants was to upskill current employees — but also look at the potential to reskill employees from other parts of the business.

It is also clear from the discussions that the topic has high priority. Leaders recognise the problem, and there is strong support for change managers in HR and lines of business to implement the necessary tools and cultural adaptations. IDC has observed three best practices from organisations that have successfully launched reskilling programs.  

It was also clear from the conversation that many organisations are not using specific tools and methodologies to assess and match the skills that are available in the company. As one participant from a bank stated: "We're not using tools for skills assessment. We leave it to the people managers to assess."

However, structured skills assessment — and being able to use the data for planning purposes — is one of the elements that sets a mature skills development approach apart. IDC has developed a maturity framework for technology skills development to help guide enterprises on how to establish a mature IT learning and development organisation that connects strategic and operational IT objectives with a development program. It covers a range of dimensions including vision, process, technology application, and robust use of skill assessment. The maturity stages are illustrated below:

To progress through the stages, IDC has the following guidance:

Source: IDC MaturityScape: Technology Skill Development 2.0, IDC #US47596821, April 2021

Most organisations are in the early stages of exploring how best to leverage their internal skills, and the challenge is often that organisational boundaries prevent staff from being used outside their normal roles. Employees with skills beyond their roles cannot easily be leveraged for new projects, products, or services. A trend in recent years has been to implement agile organisational forms, to facilitate innovation, flexibility, and change, and thereby also facilitate the reuse of skills outside of current role. Even for enterprises where an agile
organisational form does not fit, the learnings and methods for the reuse and leveraging of existing skills should be considered.

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