Addressing the Skill Shortage in 2024

Fernando Vera, Americas Head of Talent Management & OD at Joyson Safety Systems

A look at HR trends for 2024 shows that skills development will be an important topic on the agenda. PwC’s survey of CEOs showed that 52 percent see the lack of skills in their workforce as a factor inhibiting their company´s efforts to change the way they create value. Likewise, Gartner´s Leadership Vision report for 2024 ranked talent shortage as the most damaging factor for CEOs’ outlook (26 percent), surpassing problems like recession and inflation. In my career as an HR professional, whether working for multinational public companies or consulting for privately owned ones, I´ve seen this happen many times. Along the way, I´ve learned how companies can address these gaps.

Soft Skills Take the Center Stage

In an era of increasing automation and AI disruption, it is no wonder that the skills consistently ranked top as the skills for the future (e.g., by World Economic Forum surveys) are those that used to be downplayed for being ‘soft,’ like creativity and empathy. If companies don´t learn to value and reward these skills, they´ll end up losing talent to the competition. A good place to start focusing on these core skills is by embedding them into formal HR processes like promotions, talent reviews and performance management. While some companies carry out competency-based assessments, often, they do it in isolation from other HR processes or as ‘added value’ assessments that are not deemed critical for the decision-making process. This has to change and HR processes need to acknowledge the importance of these skills.

‘The shortage of skills is a complex phenomenon, affected by labor market trends, technological disruptions and industry changes.’

Have a Knowledge Management System in Place

A common problem companies face (especially large ones) is the underutilization of employee skills. Often, they´ll have employees proficient in certain abilities or methodologies, and they don´t even know it. Lean Six Sigma acknowledges this as a form of waste, and for good reason. Having a knowledge management system doesn´t have to be that complicated, and it can take multiple forms. An F500 company I worked with set up a project enrollment program where employees applied for projects while matching these with employee skill sets. Other companies launch skill-based mentoring programs, thus identifying skilled mentors and building further capabilities. While a robust HRIS makes this even simpler, it is still possible without one, provided HR is creative in its approach.

Skill-Based Workforce Planning

Workforce planning tends to focus on roles and personnel costs. The process and discussions around it mostly answer the questions of how many people in a given position are needed and what the cost will be. While these are essential questions, skills are often overlooked. Incorporating skills into the workforce planning process can answer questions such as ‘Do we have the right people in place?’, ‘do we need to account for training costs for new skills?' and 'Can we leverage our current human capital?’ A company I worked for struggled to adopt a new commercial strategy because their sales team didn´t have the consultative selling skills necessary for the transformation. This impacted the company´s bottom line directly but could have been avoided by having skill-based WFP.

Change the Script of Career and Retention Conversations

Managers are often trained on key questions for career and retention, such as ‘What role would you like to get to?’ or ‘What do you like most about working here?’ And while these questions are essential, these conversations are also a great starting point for leveraging employee skills. Enable managers with conversation guides asking, 'What skills would you like to practice more?’ or ‘Where do you think you could add value with your skill set?' These give employees a chance to develop new skills or apply those they already have while giving them a sense of purpose in their contribution to the organization.

The shortage of skills is a complex phenomenon, affected by labor market trends, technological disruptions and industry changes. As we´ve seen, it is among CEOs' main concerns when it comes to the outlook of their organizations. HR can play an active role in addressing this challenge and supporting organizations´ strategies by better identifying, developing, and leveraging the skills of current and prospective employees. This however, will require changing the way we look at core HR processes.

Knowledge Management

HRIS

AI