The skills shortage is about to be felt across most industries and yet very few businesses have a training plan in place to counteract its effects.
Compounding the problem of replacing existing skills is the probability of changes to so many of the factors that will influence the future skills needs of employers. Progress in technology and changes to industrial processes are just two of the drivers that will demand a wider and more accomplished level of skills in the near future.
Where are the Good People?
Managements often say they “don”t have enough good people. If they take any action at all it is to focus attention and developmental resources on employees whom they consider have essential skills or will be difficult to replace. Training is often seen as a reward for achievement or a “perk” of certain positions; the majority of their people are allowed to continue as before until they leave, retire or their jobs become redundant.
Unfortunately this approach will never realize the potential of many employees to develop the capabilities needed to meet future skills requirements. It presumes that it will always be possible to go outside the organization to recruit those with the experience and skills that are required. Research shows the fallacy of this attitude.
A U.K. survey by the Chartered Institute of Personnel and Development found that without more planning for the future there will be a large gap between the types of skills demanded and those actually available.
About one-third of the organizations surveyed by the CIPD said they expected to need a higher level of skills over the next three years. Just over a quarter said they would require a ‘broader range’ of capabilities, with management and leadership skills topping the list of future needs.
It’s the same in most countries and most industries. Our economic futures depend on having people with the right skills in the right places, but unless employers take a different approach to training and development these skills simply won’t be there.
Nurture and Develop your Talent
Most organizations already have the “good people” they need — or at least they have people with the ability to have their skills developed to meet the future needs of the business. If that talent is not presently good enough to meet changing requirements, it needs to be nurtured and developed through challenging work experiences, effective management and coaching.
What firms really need is the foresight to make an investment in long-term development of these people as well as a management able to identify future skills requirements and assess those within the organization who are best able to acquire them.
Not surprisingly studies have consistently shown that businesses with the highest rates of employee retention and low rates of employee turnover have an organizational culture that values people and strives to develop the abilities of every member of the team.
Managers Play a Crucial Part
These studies have also found that one of the most important factors for commitment and retention is the effectiveness of immediate management. Employees say it is an important element of the work environment; research shows it highly correlated with commitment and retention scores, and employees cite poor management as a key reason for leaving a company.
The ideal manager views the care of their employees as their primary responsibility. They take a personal interest in the needs and expectations of their people and champion individual development, not for those few with demonstrated high potential, but for all. They should also be accountable for turnover and for employee retention/commitment.
Yet most managers do little to retain and develop their people. Roger Austin, Commercial Director of SHL, the world’s leading provider of measurement services to HR, says: “While most managers fully endorse the view that people are a company’s most important asset, many only pay lip service to this in their day to day operations.”
The Solution is Better Management
Recent research conducted by SHL indicates that businesses will be able to overcome the effects of the skills shortage by managing their existing people better and making them more productive.
The study covered 1,250 large organizations in Europe and the UK in six key business sectors; chemicals, engineering/manufacturing, finance, retail/leisure, services and IT/telecommunications. It found that organizations with a higher ratio of
The research found that organizations with a higher Human Investment Ratio (a measurement of the ratio of value produced by an employee and the cost of that employee) had:
– higher job offer acceptance rate
– shorter time to accept job offers
– lower resignation rates
– larger training functions
– more training hours per manager
The looming skills shortage is very real and managements everywhere face the challenges of finding effective countermeasures. Research clearly shows that major financial gains can be produced by enlightened and forward-thinking people management, and that growth and wealth creation are facilitated by making an investment in the people already on the payroll.
Copyright 2005, RAN ONE Inc. All rights reserved. Reprinted with permission from www.ranone.com.
Chris’ combination of academic credentials, career experience and temperament ideally suit his calling as a business development advisor. Clients say he has a mind for business and a heart for service.