Half of businesses lose competitive edge amid talent shortage

30 November 2022 Consultancy.uk 3 min. read
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Half of today’s organisations agree that this ‘digital divide’ is widening, according to a new survey. And a similar portion of corporate leaders believe talent shortages are seeing them fail to compete – with experts suggesting this demonstrates the importance of upskilling young workers as soon as possible.

With companies throwing billions of pounds every year at digital and analytic business transformations, it seems safe to say that the trend is showing no signs of slowing down any time soon. However, for all the promises of digital technology when it comes to improved efficiency and new opportunities, the majority of transformations still fail. A mounting body of evidence suggests that this is because, for all the world beating technology firms can now lay their hands on, they are failing to source the right human abilities to complement it.

Putting that into context, the World Economic Forum has previously estimated that 150 million new technology jobs will be created globally over the next five years, while 77% of all jobs will require digital skills from workers by 2030. However, businesses currently face a global shortage of digital skills, with only 33% of technology jobs worldwide filled by the necessary skilled labour.

More than half of organizations still face a shortage of digital talent and say it affects their competitiveness

To consider how that shortage might impact firms in the current economy, Capgemini and LinkedIn have carried out a global survey of businesses. What they found was that firms are already struggling to maintain productivity, and many are losing ground to competitors due to problems recruiting.

Asked if they were currently experiencing a shortage of talent, 51% of firms said they lacked individuals qualified in hard digital skills. A similar number said that gap had actually been widening in recent years, suggesting trouble ahead. Meanwhile, a worrying six-in-ten said their organisation lacked enough qualified individuals with soft digital skills. Soft digital skills include things like critical thinking, flexibility and creativity – all crucial attributes in a volatile market.

Without such skills, the majority of firms are noticing that they are unable to keep up with changes in the economy, and feel they will struggle to come out ahead in the future. Asked the impacts of this, 54% said digital transformation programmes had been held back by their talent gap – and the same number said they had ‘lost competitive advantage’.

Percentage of organizations responding to widening of digital talent gap, by geography

US and UK respondents came out ahead of the global average when it came to having a widening digital talent gap – suggesting those economies may find it harder than most to bounce back from the current recession by using digital technologies to stimulate growth. The global average was 55%, with the UK two points ahead – but the US was in by far the worst position at 70%.

Commenting on the study, Rehan Haque, CEO of metatalent.ai suggested that to overcome these problems, businesses need to consider upskilling Gen Z and Alpha workers sooner, rather than later. In particular, offering “upskilling mentorship platforms” targeting the future of work would not only helps today’s businesses to directly identify skills gaps in their current workforce, but “also helps them to equip their current and future workforce with skills-based training for the new and emerging job categories of tomorrow.”

Haque added, “Too many young people are ill-prepared for the jobs of the future, due to a lack of exposure to the digital tools and skills needed for the future of work. Generation Z and Generation Alpha will make up around a quarter of the UK workforce by the end of this decade, and nine-in-ten of their jobs will require digital skills as a minimum. The most immediate challenge for today’s businesses is how to empower these emerging generations with the tools they need for the future of the work. Providing employable skills training for the future workforce is critical for businesses to keep up with the increasing demand for digital skills over the next decade.”