As potential skill shortages loom, a new survey finds that many companies are using multiple tactics to close gaps and that reskilling efforts are paying off.
As technologies and business models continue their rapid evolution, companies are experiencing a step change in the workforce skills they need to thrive and grow. Previous research has shown that as many as 375 million workers globally might have to change occupations in the next decade to meet companies’ needs and that automation could free employees to spend as much as 30 percent of their time on new work. Now, in a new McKinsey Global Survey on future workforce needs, nearly nine in ten executives and managers say their organizations either face skill gaps already or expect gaps to develop within the next five years.
Although most respondents say their organizations consider it a priority to address skill shortages, few say their organizations understand how to equip themselves with the workforce skills they will need most.
Skill gaps have appeared, and companies are trying to close them. Research suggests market and technology trends will play a big part in these shifts. Three in ten say at least one-quarter of their organization’s roles are at risk of disruption in the next five years by these trends.
A potential hurdle to effective decision making is a lack of visibility into the skills of the existing workforce and the effects that the disruptions will have on workers’ roles. Nevertheless, most organizations are taking steps to address their talent needs, often through a mix of actions such as hiring contract or freelance workers and redeploying employees into new roles. The survey suggests that the most common tactic for addressing skill gaps over the past five years has been hiring, cited by two-thirds of respondents. The second-most common tactic is skill building, as accomplished through reskilling programs and other efforts. On average organizations take at least two actions to close potential gaps.
As more tasks become automated and companies redesign jobs to encompass different activities, it will be critical to enact strategies that help employees develop the new capabilities needed. This will be a major undertaking. Our survey results suggest that most companies will prioritize learning and development as they try to close skill gaps. Companies that have not yet begun reskilling their employees should consider taking these actions:
Understand which skills you need. Companies might not recognize skill gaps in their workforce, but they probably have some already. A diagnostic can show which skills the workforce possesses and which will be necessary in the future. Understanding which skills to develop in the workforce requires a rigorous, empirical approach to comparing the supply of each skill with the business’s strategic needs.
Be strategic in how you close gaps. Companies must decide what actions they should take to address each gap. Filling most gaps will require a mix of approaches, such as hiring and reskilling. For each approach, it is necessary to decide which specific programs or initiatives to implement to gain the right skills in the workforce. This decision also includes candidate selection: Which employees should be reskilled first? Meanwhile, companies should prepare the workforce for change by explaining the reskilling agenda, including each employee’s future role and reskilling options.
Build training capabilities and partnerships. Applying the science of learning will improve the outcomes of any reskilling effort. Companies should structure the learning journey to help employees retain new skills and apply them to their role. To do so, the reskilling curriculum should blend in-person and digital learning opportunities. Employees should be assigned to train in a cohort of employees with similar experiences and should be involved with projects that allow them to practice skills while they learn. Because organizations may need to cultivate a broad range of workforce skills, they will likely need to assemble learning resources from multiple providers—for example, online platforms, universities, and technical organizations. Fostering a culture of lifelong learning also can encourage employees to develop new skills. (