Question: what recipe can you make with the following ingredients?
- A record number of employees approaching retirement age in the next handful of years.
- A bunch of companies whose workforces were hollowed out by layoffs in the recent past, leaving them with record cash reserves, but struggling for battle-tested, promotable talent to meet future needs.
- Students graduating from college lacking the skills to hit the ground running in their careers.
- An unwillingness to spend money to bring said grads up to speed, for fear that they'll be poached by competitors.
A confession: while I count myself as fairly handy in the kitchen, the only thing I can assemble from that particular mélange is a steaming pile of dysfunction.
As it turns out, I'm not the only one: companies are increasingly realizing that their futures are at stake if they can't locate the appropriate talent to cope with the loss of key employees over time, not to mention having the ability to take advantage of growth opportunities and scale up.
Is there really a talent shortage?
Despite the still unacceptably high unemployment rate, talent apparently isn't easy to find: a recent Accenture study found that 46 percent of US executive at large companies are concerned they won't have the skills they need in the next one to two years.
The skills that are most in demand: IT, engineering, R&D and sales. And the consequences faced by companies that fail to acquire them are real: according to the study, 66 percent of executives anticipate a loss of business to competitors, with a further 64 percent anticipating revenue loss if they don't address the skills gap. Additional consequences include anticipated delays in developing new products or services (53%), eroding customer satisfaction (59%) and additional pressure and stress—likely coupled with falling productivity—on existing employees (87%).
Are companies stepping up?
When I last touched on this topic in this blog, I cited the following quote from Peter Cappelli of the Wharton School of Management: "The United States is at the moment the only country in the world where the notion that employers are simply the consumers of skills is seriously considered."
There's evidence in the Accenture study that those attitudes may—at last—be changing: 72 percent of executives polled for the study identified training as "one of the top ways for employees to develop new skills". While that suggests that the value of training employees isn't lost on executives, it also highlights the reluctance of firms to pay for it in recent years. Happily, the study also found that those attitudes may be changing as executives face up to the looming skills gap: 51 percent of executives signaled an intention to increase investment in training in the next two years.
A question of perception
One final note from the study raises the question of what actually constitutes workplace training, and how it is perceived by different parties within a company. Illustrating that divide: employers indicated in the study that 52 percent of their employees "receive company-provided employee training. By comparison, a previous Accenture survey of US workers found that only 21 percent of employees say they receive company-provided employee training."
While that may be something of a footnote in terms of the skills debate (if there is a shortage, it exists regardless of which party is correct), it does underline the differing priorities of companies and their employees—and which may go some way to explaining the gap in perception. Typically, firms want employees to have the skills and training that will enable them to do their jobs effectively and within any relevant legal or environmental frameworks, while employees want to learn new skills and capabilities that will help their careers—whether at that employer or elsewhere. Thus, that dull EEOC presentation you had to sit through might have felt like a waste of time, and likely won't make it onto your resume, but it probably shows up as training in your personnel file.
Is the future brighter?
For as long as there have been firms, there have been executives complaining about not being able to find the talent they need—a gambit that can be employed for everything from protecting the executive's own job, to putting pressure on governments and educational institutions to provide skills training for people prior to entering the workforce, in order to reduce corporate overhead. However, while the Accenture study isn't conclusive evidence, it does point to a willingness by firms to step up and shift from passive consumption of the skills currently on the market to active development of their own employees—a very positive sign.
The people most likely to benefit from that shift: current college students and recent graduates, who will likely be entering a workforce where employers are more receptive to the fact that they might not have every single skill they desire, and more willing to help them acquire them. With a current national unemployment rate of 12.4 percent among 20-24 year olds, that's good news indeed.
What's your take on the training issue? Do companies have a responsibility to train employees, or should it be down to the individual to ensure that they have the necessary skills to compete? Let us know in the comments section.
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