Skills Training Gap Among Employees Revealed

Skills Training Gap Among Employees Revealed

As technologies and business models continue their rapid evolution, companies are experiencing a step change in the workforce skills they need to thrive and grow. Previous research has shown that as many as 375 million workers globally might have to change occupations in the next decade to meet companies’ needs and that automation could free employees to spend as much as 30 percent of their time on new work.1 Now, in a new McKinsey Global Survey on future workforce needs, nearly nine in ten executives and managers say their organizations either face skill gaps already or expect gaps to develop within the next five years.2
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Although most respondents say their organizations consider it a priority to address skill shortages, few say their organizations understand how to equip themselves with the workforce skills they will need most. In fact, only one-third of respondents say their companies are prepared to cope with the workforce disruptions resulting from technology and market trends. Most respondents say their organizations are hiring employees in an attempt to prepare for potential skill gaps, and some have made efforts to build skills in their workforces: about one-third of respondents say their organizations have begun reskilling efforts.3 Among them, many report early progress and provide insights into what these programs look like.



Skill gaps have appeared, and companies are trying to close them
The findings from our survey suggest that companies lack the talent they will need in the future: 44 percent of respondents say their organizations will face skill gaps within the next five years, and another 43 percent report existing skill gaps . In other words, 87 percent say they either are experiencing gaps now or expect them within a few years.

Respondents expect to see skill gaps as market and technology trends alter organizations’ talent needs.
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Respondents expect market and technology trends to play a big part in these shifts. Three in ten say at least one-quarter of their organization’s roles are at risk of disruption in the next five years by these trends. Looking at respondents by industry, those in financial services and in high tech and telecom are the most likely to expect this level of disruption, while those in healthcare services and pharmaceutical and medical products are the least likely. (Explore the results by industry in “An interactive look at skill gaps and reskilling efforts.”)

Respondents see a need for their organizations to address potential skill gaps in a wide range of business areas. When asked where the greatest need exists, they most often say data analytics, followed by IT management and executive management (Exhibit 2). Similarly, when looking at the specific skills with the greatest mismatch between current supply and what will be necessary in the next five years, respondents expecting skill gaps to open during that time most often identify advanced data-analysis and mathematical skills.

Respondents report that potential skill gaps need to be addressed in data analytics and a wide range of other business areas.
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Nearly all respondents classify closing potential skill gaps as a priority for their organizations, and about one-third say it is among the top three priorities. However, relatively few indicate that their organizations are ready to respond. One-third say their organizations are prepared to address potential role disruptions, and a smaller share—28 percent—say their organizations make effective decisions on how to close skill gaps. A potential hurdle to effective decision making is a lack of visibility into the skills of the existing workforce and the effects that the disruptions will have on workers’ roles. Fewer than half of respondents say their organizations have a clear sense of their current skills, and just 41 percent report that organizations have a clear understanding of the roles that are likely to be disrupted.

Nevertheless, most organizations are taking steps to address their talent needs, often through a mix of actions such as hiring contract or freelance workers and redeploying employees into new roles.4 The survey suggests that the most common tactic for addressing skill gaps over the past five years has been hiring, cited by two-thirds of respondents. The second-most common tactic, cited by 56 percent of respondents, is skill building, as accomplished through reskilling programs and other efforts. On average, respondents say their organizations take at least two actions to close potential gaps.

Here’s how to conduct a skills gap analysis:

Step 1: Plan

You can perform a skills gap analysis on two levels:

• Individual: You can identify the skills a job requires and compare them to an employee’s actual skill level.

• Team/company: You can determine if your employees have the skills to work on an upcoming project or if you need to hire externally. This analysis can help you target your employee training programs to develop the skills you need.

Here’s an overview of skills gap analyses, including scope, examples of when to conduct a skills gap analysis and ways to close skills gaps:

HR can initiate team and company-wide skills gap analyses by holding a meeting with managers to explain the process. It can also be a good idea to hire an external consultant to conduct a skills gap analysis. Hiring an outside evaluator can make the process more objective and will free up staff time to focus on other relevant work.

Step 2: Identify important skills

Some employers say they have difficulty filling jobs because of skill gaps. But others argue that skill gaps are a product of unrealistic expectations. Identify the skills you need by answering two questions:

• What skills do we value as a company?
• What skills do our employees need to do their jobs well now and in the future?

Consider your company’s job desriptions, business objectives and company values. Think of the new skills your company might need in coming years. You could also survey team members on what skills they think are missing. Their insights could prove invaluable and involving your employees can help them feel that they’re contributing to your company’s growth.

Numerical rating scales can be a more practical way to assess skills gaps when you want to aggregate individual scores. You could use a five-point or three-point system. Ensure you have explicitly defined scales. For example, a scale of 1 to 5 could range from poor to excellent, or inexperienced to expert.

Step 3: Measure current skills

To measure skill levels, you could use:

• Surveys and assessments.
• Interviews with employees.
• Feedback from performance reviews.
• Skills management software, like Skills DB Pro and TrackStar that can make a skills gap analysis much less time-consuming.

Sometimes, a skills gap can result from limited experience, especially in the case of new hires. Consider on-the-job coaching as a way to close a skills gap, instead of formal training. An employee with the scores listed above probably doesn’t need training in Customer Relationship Management (CRM) software. But, they do have negotiation and Excel skills gaps. Negotiation skills are marked as more important than Excel, so employee training and development should begin there.

Step 4: Act on the data

There are two ways to fill skills gaps: training and hiring. Decide which approach (or combination) works best for each skill gap.

Train for skill gaps

More than half of companies train and develop their staff to fill open positions. Offer training for employees in skills you’d like to strengthen, for example using SAP or Excel. The right training can help you close gaps between current and desired skill levels.