Take a walk down any main street, shopping district, or mall in the United States or first-world country today and you’ll see a plethora of “Help Wanted” signs outside businesses. There is a chronic worker shortage. Much of this worker shortage is due to a combination of the Great Resignation and a Grey Resignation – predicted by Anthony C. Klotz – together with young entrants to the job market being reluctant to join companies in the formal employment sector. Businesses in the United States and around the world already saw a spike in voluntary resignation rates in the spring of 2021.
And it’s not just retail and service businesses that are losing employees and the valuable skills those employees bring. Companies across all industries and sizes are struggling to retain and hire knowledgeable workers with the right skill sets to run and grow their organizations. This is a business sustainability issue and blocker to business and digital transformation.
The pressure to retain and hire quality talent with strong digital skills in particular has intensified with the COVID-19 pandemic, as the business digitalization need was accelerated by five to 10 years. Suddenly, harnessing the Internet of Things (IoT) and investing in robotic process automation (RPA) and machine learning are urgent priorities, not long-range plans. This acceleration has created employee skills gaps where organizations that might have been one or two years behind in digital skills transformation have suddenly found themselves to be a decade or more behind. This puts them at high risk of being unable to tap into the new digital economy, which is an opportunity cost few can afford.
The growing digital skills gap has also highlighted current and projected future inequalities because the gap has widened at different rates in different geographical locations and industry sectors. The looming digital divide is potentially so serious that the World Economic Forum has launched the Edison Alliance, mobilizing a global movement, including a large number of SAP customers and partners, to prioritize digital inclusion as foundational to the achievement of their sustainable development goals. SAP has also prioritized its own digital literacy program.
To remain competitive and sustainable in the digital economy, businesses must have enough people with the right skills at the right time to help them accelerate their digital transformation. Every business and digital transformation is also a people transformation, but the key point is that the people transformation needs to happen first.
Embrace the “Unbound” Workforce as the New Normal
Today, it seems every employee might be a flight risk, especially those with the skills that are foundational to digital transformation and economic growth. One way to address the immediate skills gap is to stem the flood of people leaving your business for greener pastures – which, for many, are more flexible and less biased work environments. Retention has always been the best form of recruitment. During the peak of COVID-19, knowledge workers were freed from the office and became, at least in their minds, fluid, liberated, and free-range employees. Many don’t want to go back to full-time office work – especially women and people of color. As noted in a previous article, pulse studies have found that women, working parents, and employees of color are the most adamant about continuing to work remotely.
And it’s for good reasons. Most employees – especially women – found that they were able to sustain high levels of productivity working remotely while gaining more time for relationships, stress-reducing activities, responsibilities such as caring for children and aging parents, and more. They could work from anywhere, at any time that worked best each day, and do their jobs well. Most employees report that they are aren’t willing to give this up because an employer says so.
The benefits of working remotely have been even more significant for people of color. For example, Black men reported a massive improvement in their employee experience because, while working remotely, they felt they have not been subject to the same level of unconscious bias. In other words, they feel that they’ve enjoyed more equality working from home – which is critical to fostering a sense of belonging and increasing the likelihood of their retention.
This is why listening to and meeting the needs of remote and hybrid workers is massively important from both a sustainability and a diversity, equity, and inclusion perspective. It’s critical to develop flexible work environments that balance company and employee needs and create an employee experience they love. Because the fact is, every flight risk threatens your most valued digital skills, as the people with those skills are most likely to leave.
Empower Employees to Expand Their Capabilities to Advance Individual Growth
Another way to address skills gaps is to empower employees to work in cross-functional teams based on organizational tasks or projects. This notion of coming together with others to get work done and then disbanding when the work is finished is widely referred to as dynamic teams. They can be across hierarchies or lines of business and help to create an agile working environment while fueling skill development. By leveraging internal talent, managers and human resources do not have to create new positions, find budget, recruit, or support a team creation process with other time-consuming tasks. Instead, your business organizations can simply bring together employees to form optimal teams that can focus on short term tasks and priorities.
In addition to forming dynamic teams to bridge skills gaps, organizations can also take an employee-centric approach to development and growth by providing access to internal opportunities through fellowships, gigs, temporary assignments, mentor programs, and experiential learning. This allows an organization to build the skills needed for the future while empowering individuals to create a career completely their own. Connecting employees to meaningful work and new opportunities will drive the adaptability needed for better business outcomes.
Proactively Upskill and Reskill
Finally, invest in learning and development. Why? Because every digital transformation is also a people transformation where employers must upskill and reskill their employees to meet today’s changed needs and tomorrow’s capabilities demand. Not only must organizations provide the tools to help their workforce discover learning to upskill and reskill them, but they must create an environment supportive of continuous learning. For example, complementing formal training with informal, collaborative, and engaging communities of practice can offer easy access to experts and knowledge sharing to build up skills quickly. A dynamic environment of learning, feedback, and coaching empowers people to take charge of their development with confidence. Here, learning recommendations turn every employee into a proactive learner by giving guidance and nudging them to take action.
Undeniably, closing the skills gap and striving towards sustainable growth requires organizations to create a create a future-fit, resilient workforce that directly addresses its needs as well as those of each of its employees. This can be truly transformational.
To learn more, visit www.sap.com/people-analytics.
Tammie Eldridge is part of Solution Marketing at SAP SuccessFactors.