According to PwC, “By 2030, the talent shortage and skill gap in the US alone is expected to be a total loss of $8.5 trillion.”
This data reflects the financial implications of skill shortage on organizations. Further, it can impact a country’s economy by lowering overall growth and increasing the risk of structural unemployment.
This shortage can arise due to various factors such as skill obsolescence, high retirement rates, lack of training, rapid changes in technology, automation, and individuals lacking the ability to use them. Therefore, addressing this issue requires a multifaceted approach, including hiring, upskilling, and retaining skilled employees.
This blog will provide effective strategies to address the growing skill gap and discuss how SAVIOM‘s software can help overcome this problem.
But first, let’s understand:
1. How does skill shortage affect organizations?
In today’s fast-paced and constantly evolving business world, having a skilled and talented workforce is crucial for the success of any organization. However, many companies struggle with skill shortages, which can hinder growth and competitiveness.
Firstly, when there is a shortage of skilled workers in a particular field, the cost of hiring and retaining those workers can increase due to high competition. In addition, skill shortages affect the performance and productivity of existing resources as they may not have the necessary skills to perform their jobs efficiently.
This can cause project delays and substandard deliverable quality. Furthermore, there is a higher risk of overutilizing existing resources, leading to excessive stress, burnout, and, eventually, unplanned attrition.
Now that we know the problems let’s discuss the strategies to combat them.
2. What are the effective ways to overcome skills shortage?
A growing skills gap can hurt a firm’s productivity and performance. Moreover, it affects the organization’s revenue and reputation in the long run. To avert such crises, here are some efficient strategies:
2.1 Assess future skill demands and current capacity
The first step for overcoming skill shortage is to have foresight into all skill demands for pipeline projects. Along with this, managers need to take inventory of the current skills available in the organization. This data-driven approach will help identify skill shortage/excess and formulate appropriate resourcing strategies.
For example, a retail business is venturing toward e-commerce; as a result, they require web developers and data analysts. Therefore, they need to analyze the capabilities and availability of their existing talent pool to identify skill shortages. Accordingly, they can implement effective measures like hiring or upskilling to bridge the gap in advance. This helps organizations to remain competitive in a rapidly changing business landscape.
2.2 Provide training and upskilling opportunities
Rapid technological advancements can give rise to new skill demands and lead to the obsolescence of legacy competencies. Therefore, organizations must facilitate appropriate training and upskilling opportunities to stay relevant. It can be done through in-house training or partnering with outside institutes offering certification courses.
Let’s elucidate this with the example of an IT company with a high demand for ReactJS developers for a new project. The company can fill this demand by training its existing SQL and Java developers. Thus, it enables them to form a multi-skilled workforce that can take on new roles and responsibilities.
2.3 Promote on-the-job training and shadowing opportunities
At times, organizations could only identify resources that partially align with the required project requirements. In such a scenario, on-the-job training and shadowing opportunities can be used to address the skill gap.
Furthermore, on-the-job training provides employees with hands-on learning experiences in their work environment. Moreover, it reduces reliance on one key resource in case of unplanned leaves and attrition. Therefore, it creates a talent pipeline within the organization to fill the existing skill gaps.
2.4 Use contingent workforce if required
A contingent workforce consists of temporary or contractual employees. They are hired to provide specialized skills or expertise for a particular project or timeframe. This helps meet seasonal skill demands and improves flexibility and agility in responding to changing business needs.
For instance, with the increasing risk of cyberattacks, many companies require skilled cybersecurity professionals to mitigate sudden cyberthreat. However, since it is a short-term requirement, organizations can use contingent cybersecurity consultants to conduct security audits and get recommendations. This way, the immediate skill demand is fulfilled without bearing the extra cost of hiring or training any permanent resource.
The shared service model is an effective way for organizations to mitigate skill shortages. It allows organizations to access the necessary expertise from different business verticals and departments without hiring new employees.
For example, instead of hiring individual resources for financial reporting, tax compliance, and internal audit in each department, they can create a centralized finance team to provide specialized services to multiple departments. This will streamline processes, improve financial compliance and reduce costs. Thus, a shared-service model allows organizations to achieve more with fewer resources.
2.6 Implement out rotation and backfill strategy for niche skills
Niche skills are in short supply, but their demand can arise in multiple projects. Hiring more of these highly valued resources will increase the cost rate of projects. Here, the solution is to out-rotate the skilled niche resource when a project is past its critical stage. Then, the position can be backfilled by a skilled junior resource.
For example, an accounting firm has limited resources to investigate financial fraud and crimes. So, forensic accountants can be out rotated from projects once they cross the critical stage, and their expertise can be utilized in another project. This strategy can address skill shortages and provide junior resources with opportunities to develop new skills and explore new areas.
Now that we know the strategies to overcome skill shortages let’s see how advanced resource management software can help to implement them successfully.
3. How will next-gen resource management software help address skill shortages?
Skill shortages can significantly impact an organization’s ability to thrive in competitive environments. Employers must therefore leverage robust ERM solution and take proactive steps to address the issue.
Here’s how SAVIOM’s resource management software can help:
- The software provides a 360-degree view of all resources, along with their skills, competencies, and levels of expertise. This gives a complete overview of the skills available within the organization.
- SAVIOM’s stand-out feature is its ability to forecast future demands. As a result, managers have complete data about all pipeline projects and can forward-plan to fulfill the required skills.
- The tool has multiple BI reports, like the capacity vs. demand report. It lets managers identify resource shortages before the project begins, so there is enough lead time for effective capacity planning.
- The in-built organizational competency matrix captures employees’ skills and certifications. Thus, it allows companies to facilitate training programs and formulate strategies to address skill gaps.
- Finally, SAVIOM has a unique function for what-if-analysis. It helps managers mitigate skill shortage problems by creating various scenarios and making informed decisions based on real-time data.
Therefore, it is evident that SAVIOM’s next-gen resource management software can address skill shortage issues and help organizations in effective functioning.
4. Bottomline
Skill shortage is a significant challenge many industries face today. By taking a proactive approach to address skill shortages and leveraging SAVIOM’s ERM software can help mitigate these problems. It will also help companies build a talented and diverse workforce that can help them achieve their goals and remain competitive in the marketplace.
So, are you ready to reduce the skill gap in your company?
0 Comments