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Overcoming the Skills Shortage
The skills shortage is about to be felt across most industries and yet
very few businesses have a training plan in place to counteract its
effects.
Compounding the problem of replacing existing skills is the probability
of changes to so many of the factors that will influence the future
skills needs of employers. Progress in technology and changes to
industrial processes are just two of the drivers that will demand a
wider and more accomplished level of skills in the near future.
Where are the Good People?
Managements often say they
‘don’t have enough good people’. If they take any action at all it is to
focus attention and developmental resources on employees whom they
consider have essential skills or will be difficult to replace. Training
is often seen as a reward for achievement or a ‘perk’ of certain
positions; the majority of their people are allowed to continue as
before until they leave, retire or their jobs become redundant.
Unfortunately this approach will never realize the potential of many
employees to develop the capabilities needed to meet future skills
requirements. It presumes that it will always be possible to go outside
the organization to recruit those with the experience and skills that
are required. Research shows the fallacy of this attitude.
A U.K. survey by the Chartered Institute of Personnel and Development
found that without more planning for the future there will be a large
gap between the types of skills demanded and those actually available.
About one-third of the organizations surveyed by the CIPD said they
expected to need a higher level of skills over the next three years.
Just over a quarter said they would require a 'broader range' of
capabilities, with management and leadership skills topping the list of
future needs.
It’s the same in most countries and most industries. Our economic
futures depend on having people with the right skills in the right
places, but unless employers take a different approach to training and
development these skills simply won’t be there.
Nurture and Develop your Talent
Most organizations already have the ‘good people’ they need – or at
least they have people with the ability to have their skills developed
to meet the future needs of the business. If that talent is not
presently good enough to meet changing requirements, it needs to be
nurtured and developed through challenging work experiences, effective
management and coaching.
What firms really need is the foresight to make an investment in
long-term development of these people as well as a management able to
identify future skills requirements and assess those within the
organization who are best able to acquire them.
Not surprisingly studies have consistently shown that businesses with
the highest rates of employee retention and low rates of employee
turnover have an organizational culture that values people and strives
to develop the abilities of every member of the team.
Managers Play a Crucial Part
These studies have also found that one of the most important factors for
commitment and retention is the effectiveness of immediate management.
Employees say it is an important element of the work environment;
research shows it highly correlated with commitment and retention
scores, and employees cite poor management as a key reason for leaving a
company.
The ideal manager views the care
of their employees as their primary responsibility. They take a personal
interest in the needs and expectations of their people and champion
individual development, not for those few with demonstrated high
potential, but for all. They should also be accountable for turnover and
for employee retention/commitment.
Yet most managers do little to retain and develop their people. Roger
Austin, Commercial Director of SHL, the world’s leading provider of
measurement services to HR, says: "While most managers fully endorse the
view that people are a company's most important asset, many only pay lip
service to this in their day to day operations."
The Solution is Better Management
Recent research conducted by SHL indicates that businesses will be able
to overcome the effects of the skills shortage by managing their
existing people better and making them more productive.
The study covered 1,250 large organizations in Europe and the UK in six
key business sectors; chemicals, engineering/manufacturing, finance,
retail/leisure, services and IT/telecommunications. It found that
organizations with a higher ratio of
The research found that organizations with a higher Human Investment
Ratio (a measurement of the ratio of value produced by an employee and
the cost of that employee) had:
- higher job offer acceptance rate
- shorter time to accept job offers
- lower resignation rates
- larger training functions
- more training hours per manager
The looming skills shortage is very real and managements everywhere face
the challenges of finding effective countermeasures. Research clearly
shows that major financial gains can be produced by enlightened and
forward-thinking people management, and that growth and wealth creation
are facilitated by making an investment in the people already on the
payroll.
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