4 minute read 6 Mar 2020
Business people discussing project on laptop

How to nurture talent with new incentives and strategies

By Jim Little

EY Global Microsoft Alliance Lead and EY Americas Technology Strategy Lead

Technology enthusiast. Former CIO. Passionate about helping companies re-imagine their business, value propositions, customer and employee experiences using technology.

Contributors
4 minute read 6 Mar 2020

Leaders in digital transformation are taking the initiative through new recruitment strategies, but also by training existing employees.

The skills gap is real and ubiquitous. In a survey conducted by EY, Six habits of digital transformation leaders,  we found that 59% of all corporate companies believe there’s an industry-wide shortage of the type of skills that would help accelerate their digital transformation efforts.

This is a major barrier. Employees are the heart of any organization, and they’re the face of the brand. If employers are not making efforts to reshape and reskill their workforce for the Transformative Age, companies will fail to meet customer expectations.

Our research shows that companies are taking matters into their own hands when it comes to plugging the skills gap – but the differences in approach taken by leaders and laggards are significant. First, leaders are more aggressive in seeking to re-skill their workforces (figure 1): every leader is working to address the skills gap, while 7% of laggards admit to doing nothing. Almost half (46%) of the leading companies are trying a new recruitment strategy, compared with just over a quarter (27%) of laggards. Leaders also outpace laggards when it comes to new training programs and assessing existing staff.

It’s essential that companies focus on the human element of their enterprises – enabling their employees to help customers, the broader organization and external community stakeholders.

It’s essential for companies to take action to try and plug the skills gap, according to EY’s Global Future of Work Solutions Leader Liz Fealy. “Organizations that are not laser focused on humans at the center and solving the skills gap problem face serious competitive risks for productivity, innovation and growth,” she says. “Organizations are deliberately connecting their business strategy and workforce strategy (through capacity, capability, composition, cost), and are building agile organizations and teams in order to drive competitive advantage.

Leaders and laggards are almost equally focused on developing new incentives and mandatory training programs. This is significant, as these are both internal-facing options. This suggests that companies are keener to invest in their own employees over the long term, rather than rely on shorter-term fixes such as contracting or acquiring companies with desirable skills.

David Storey, EY’s EMEIA Workforce Consulting Leader, says that it is essential companies invest in their own people. “As the war for talent intensifies, companies need to compete to ‘outdevelop’ each other and focus on future-proofing their leaders and teams. They can do this by upskilling them, focusing on both future digital and adaptive skills, as well as reskilling from a technical and functional perspective,” he says. “The pace of change is so fast that it is often quicker and cheaper to seek to future-proof core elements of the current workforce than to bring in new talent from today’s labor market where everyone is chasing the same skills. Upskilling employees is also the right thing to do from a social and internal cohesion perspective.”

Investing to upskill existing staff is a human-centric approach, underscoring the fact that the Transformative Age remains driven by people, not technology. Kamran Malik, EY’s Global Learning Practice Leader, says this is a fundamental tenet of modern businesses.

“Companies are focused on creating cultures of innovation and continuous learning to encourage their workforce to retrain, reskill and change the way they work,” he says. “A fundamental part of this is putting humans at the center to create a learner-centric opportunity to develop future skills, both from a skillset and mindset perspective.”

Figure 1: Leaders address the skills gap more aggressively

People are the heart of any organization, and critical business decisions need to made with that in mind (for more, see Eight forces driving HR transformation right now1). The good news? Our research shows that digital transformation leaders appear to understand that.

  • Drive skills with a cultural shift

    Can you plug the skills gap through a cultural revolution? That’s the ambition of Spain’s Allianz Seguros. “We are hiring some external people with specific statistical skills,” says Chief Operating Officer Agustín de la Cuerda. “But the most important thing is the overall evolution of the company’s skills. That’s the approach we are following. The cultural evolution is a journey, and we are still in progress here.”

    Similarly, Keppel is looking to evolve the wider culture of the company to drive up the digital skills level and culture. Global CIO Jacob Tong says that although a mature digital culture is being nurtured across the business and people are determined to succeed, skillsets and mindsets remain an issue that will need determined effort, time and investment to resolve.

    “One way of getting around this is working closely with HR to ensure a digital skillset and mindset can be infused across the organization,” he says. “This includes compulsory digital and agile training as part of staff annual training and development, across both hard and soft skills. Also, leadership needs to be very supportive and encourage their staff to do this training – it will really help.”

Actions for the boardroom

In times of unprecedented change, businesses must ensure they are equipping themselves with the right talent and skills. Here are some ways to start:

  • Build out a deliberate, data-based workforce strategy, starting with knowing what talent you have and what talent you need going forward. Understand future talent skills gaps (and surpluses) and implement “build, buy and borrow” talent interventions to support the achievement of business strategy.
  • Create a culture of continuous learning and develop a learner experience that allows for the development of skills in a learner-centric way. This needs to be backed up by a consumer-grade learning experience and supporting technology. Employees are the lifeblood of any business, so it’s essential they have the skills they need to thrive and deliver real business value.
  • Understand that investing the bare minimum in skills is a false economy and will negatively impact customer experience.
  • Invest in skills across the organization. Link employee attainment to resourcing decisions and pay close attention to creating a workforce that encompasses a diverse set of skills at all levels of the organization.

Summary

More than half of the companies EY recently surveyed believe there is an industry-wide shortage in skills that would help accelerate their digital transformation efforts.

Digital transformation leaders are much more aggressively addressing the skills gap with new recruitment strategies. But both leaders and laggards are focusing on developing new incentives and mandatory new training programs. The data suggest that companies are keener to invest in their own employees over the long term, supporting the idea that the Transformative Age is driven by people.  

About this article

By Jim Little

EY Global Microsoft Alliance Lead and EY Americas Technology Strategy Lead

Technology enthusiast. Former CIO. Passionate about helping companies re-imagine their business, value propositions, customer and employee experiences using technology.

Contributors