March 29, 2023

In the digital world,

you can’t win the war for customers if you can’t win the war for talent

The Digital Skills Gap: Is your talent keeping up with you technology?

One of the biggest challenges leaders face from unprecedented waves of new digital technology disruption is to accurately assess what are the new and ever-changing skills and capabilities their companies need to successfully compete as a digital enterprise.

Here is some recent data that highlights the impact and cost of not closing the digital skills gap in your organization:

  • A recent PwC study estimated that by 2030, the talent shortage and skills gap in the U.S. alone is expected to cost companies $8.5 trillion in lost revenue.
  • A Monster survey documented that nearly one-third of employers surveyed agree that the skills gap has increased from a year ago because of the difficulties of sourcing qualified candidates. 87% of employers said they have trouble finding qualified talent.
  • A Salesforce survey of hiring managers identified digital technology disruptions like AI,  ML and other forms of workplace automation will cause a major shift in the kinds of skills they will need employees to possess.
  • A Degreed survey showed that employees are similarly concerned about the widening skills gap, with 46 percent of those surveyed believing their current skill set will become irrelevant by 2024.
  • Yet unfortunately, a recent study by MIT & Deloitte showed that only 34 percent of workers surveyed feel supported by their organization’s skill development opportunities.
  • Lastly, a Citrix report highlighted that hiring is only the first step toward filling the skills gap for companies. According to their recent report, 82% of employees and 62% of HR directors said they believe that workers will need to reskill or upskill at least once a year to maintain a competitive advantage in a global job market.

What do you need your organization to do tomorrow that it can’t do today?

To tackle this challenge of closing the digital skills gap, I have worked with CIOs and their senior leadership teams on a talent assessment program that uses the chart below to identify the gaps between the talent they have in the left-hand column and the talent they need in the right -hand column.

To fill the gaps, they develop a workforce plan to recruit, develop and retain a whole new set of skills and capabilities that don’t currently exist within their organizations.

For example, the skills required for traditional inside-out user interface design are completely different from the outside-in skills for user experience design. Moving from a Waterfall development model to an Agile, Lean or DevOps development model requires a whole new set of skills and capabilities.

These are the core questions we use:

What do you want your organization to do tomorrow that is can’t do today?

  • Current talent skills and assessment

What skills and capabilities are necessary to do that new work?

  • Future skills and capabilities talent gap assessment

What is the most efficient & effective way to close the talent gap?

  • Upskilling current employee skills & capabilities
  • Recruiting new skills & capabilities

The Talent Recruiting & Development Challenge: Filling “Hybrid Jobs” with hard and soft skills from different domains

A number of the workforce plans that I’ve developed have highlighted the emergence of “hybrid jobs” that require a combination of cognitive skills, social skills and deep technical domain expertise. Needless to say, the talent pool with these multiple skills is extremely limited and much sought after. College and University curriculums aren’t teaching these combined skills while company development and leadership programs aren’t steeped in them either.

Companies that want to accelerate their transformation into digital enterprises will need to fill these types of hybrid jobs:

  • Product managers who can clearly communicate key customer touch points to development teams and discuss how digital interaction will enhance them
  • Project managers who can lead cross functional teams that require increased demand for communication, coordination and collaboration among internal business partners and external stakeholders
  • Business analysts and data scientists who can extract critical insights from mountains of structured and unstructured data and provide clear, easy to use insights that help business leaders make timely decisions
  • User experience design experts and design oriented content managers who can seamlessly and securely connect systems of engagement and systems of intelligence with systems of record
  • Development engineers who can exploit the time to value benefits of Agile, Lean or DevOps
  • Business leaders who are comfortable with launching a minimum viable product (MVP) and utilizing rapid iteration to make changes based on end user feedback

Taking a new approach to winning the war for talent: Some early use cases

As many of you who know me, know that I am not a strong proponent of using the traditional search firm approach to recruiting and development. Their transactional recruiting approach not only takes a long time but it is far from the leading edge of knowing and understanding the future digital skills and capabilities needed to do the new work going forward.

I am a big proponent of relationship based recruiting and other non-transactional approaches.

Here are some early examples of companies that are winning the war for talent by deploying a series of new approaches and innovative ways to engage with emerging pools of talent.

  1. Leverage the relationships you have with people that know who you are and how you operate

    Many companies are developing very robust talent acquisition ecosystems that leverage relationships with their employees,  customers and supply chain partners to identify and help recruit new talent. The benefit to this approach is that all the ecosystem stakeholders have a good understanding of the company’s culture and what it takes to be successful within it. They also fully understand both the technical requirements and business requirements employees need for success.

    Lithium Technologies harnessed its employee base to share their pride and stories about the company on Glassdoor. As a result, the company was able to hire 30 engineers within a 90 day period and won over candidates that had competing offers from LinkedIn, Facebook and Twitter.

  2. Build private sector-public sector partnerships

    In Los Angeles leaders from the private and public sector have joined together to create and launch The Los Angeles High-Impact Information Technology, Entertainment & Entrepreneurship, and Communication Hubs (LA HI-TECH). The goal of this regional consortium is “sustaining the economic vitality of a skilled and competitive workforce that contributes to economic growth in the tech industry in LA.”

    As part of this effort Snap partnered with LA HI-TECH to pilot a program at Pierce Community College where it led a design competition to engage students in digital media technology. Amazon, through its AWS Educate grant program, partnered with Santa Monica Community College that linked AWS’s accelerated cloud learning program into the existing curriculum. In both cases, Amazon and Snap got direct access to emerging talent pools of people who want to fill high tech jobs.

  3. Take the Moneyball approach

    Michael Lewis’s book Moneyball pits the collective old-time wisdom of managers, coaches, scouts      and front offices against rigorous statistical analysis in determining which players to recruit. Analysis wins, changing the game forever.

    University of Minnesota professors analyzed 17 studies and found that hiring algorithms outperform humans by a least 25%. “The effect holds in any situation with a large number of candidates, regardless of whether the job is on the front line, in middle management or in the C-Suite.”

    While many leaders find this approach hard to embrace, some companies are finding real success with it:

    • Waste management company, Richfield Management, uses algorithms to screen applicants for character traits suggesting a tendency to abuse workers’ compensation. As a result, claims dropped by 68%.
    • Xerox replaced its recruitment-screening process with an online test from Evolve and attrition declined by 20%.
    • SAP’s SuccessFactors and Workday gather information from LinkedIn to provide advance warning when top talent may be thinking about leaving.

Regardless of what new approach you take to improve your odds of winning the war for talent not doing so presents a real existential threat to you winning the war for customers.

As always, I am interested in your comments, feedback and perspectives on the ideas put forth in this blog. Please e-mail them to me on linkedin. And, if this content could be useful to someone you know please share it here: