Companies are providing more employee training to close a growing skills gap – but many more should be.
As economies become more entwined with technology, and the development of technology outpaces employees’ expertise, talent development has become a vital investment. As Ed Gordon, author of Winning the Global Talent Showdown points out, “You can have all the latest technology you want, but if you don’t have the talent behind it, your business is not sustainable.” AI and automation add to the urgency as they transform jobs in a growing range of sectors.
Many companies, particularly large ones with ample resources, are rising to the challenge. A survey by Training magazine found that American companies spent $91 billion on training last year, nearly a third more than in 2016. This marks a turnaround, following a period of two decades in which on-the-job training dropped by about 50% in both the U.S. and the U.K. The predominant fear, in an era of shorter tenures, was that employees would take advantage of the training and join a competitor. Now this is a risk employers have to take, while enhancing talent retention efforts.
Diane Gherson, Chief Human Resource Officer at IBM, says that employee skills stay relevant for only three years, so training is “the lifeblood of any tech company.” The company offers robust training programs, and in 2016-18, employees took on 60 hours of training a year on average. IBM estimates that in the past five years, the proportion of its employees who have advanced digital skills, i.e. analytics, AI, cloud computing, the Internet of Things and cybersecurity, has leapt from 30% to 80%. IBM is also addressing attrition with a focused talent retention initiative.
Telecoms giant AT&T is avoiding a talent shortage with, among other initiatives, a substantive employee training programme called Workforce 2020. It includes an online platform that allows employees to track hiring within the company and find out which skills are needed to qualify for jobs. In partnership with Georgia Tech and online education group Udacity, AT&T offers a low-cost master’s degree in computer science.
The Economist reports that U.S. businesses will have to fill an estimated 1.4 million new computing and engineering jobs by 2020, and many could face a talent shortage. A recent survey by Enterprise Strategy Group found that 51% of companies were short of cybersecurity skills, up from 23% in 2014. In Europe, the skills gap could be even worse. A 2017 report from the European Commission found that 15% of workers lacked even basic digital skills, and 88% of companies had done nothing to address the issue. In the U.K., a survey by the Association of International Certified Professional Accountants found that a quarter of workers had received no training in the past 12 months.
Smaller companies may not be able to implement training on a par with IBM or AT&T, but online courses have made training much more accessible. And managers are aware that technological advancement, if it hasn’t already, will require a workforce with the right skills. The supply from higher education will be insufficient, and the political climate has limited the potential of immigration to help solve the problem. A shortage of talent from these traditional sources creates a situation in which in-house training and talent development is no longer an option.