Is a skills gap threatening your digital transformation?

12 October 2020 - Reading time: 5 Minutes

Technology

It’s estimated that the pace of digital change within businesses has been accelerated by about six years as a result of the Covid-19 pandemic. Where barriers to digital transformation previously existed – be that a reluctance to abandon legacy systems or a lack of support at board level – the necessity to react to the challenges of lockdown have broken these down. 

Leadership teams have quickly made resources available and as a result 77% of UK businesses have increased their digital transformation budget, according to one recent study.

77% of UK businesses have increased their digital transformation budget

Digital change isn’t just about rolling out technology or enabling remote working though. Whenever a new way of working is introduced there also needs to be a review of the processes that surround it, and an evaluation of how relevant employee roles have been impacted.

Any subsequent change needs to be carefully planned and communicated, in order to bring everyone along on the transformation journey. As the skills required for each role evolve, it’s likely that companies will also need to rethink the type of people they have working within their organisations.

When every department is digitally enabled and deploying advanced solutions, the need to hire tech -savvy professionals is not something that’s limited to the IT department alone. What’s clear is that Covid-19 isn’t just accelerating digital transformation, it has also hastened the need to upskill the workforce.

30% of work activities will be automated by 2030 

Even before the global pandemic struck, McKinsey had predicted that the emergence and increased adoption of AI solutions would lead to machines carrying out menial and repetitive tasks on our behalf. As such, it has forecast that at least 30% of work activities will be automated by 2030.

It’s inevitable that digital transformation will lead to the composition of the workforce changing over the next few years. The McKinsey report estimates that 375 million workers globally will either need to switch occupations or acquire new skills by 2030.

This need for change has now been compounded by the Covid-19 pandemic. A study by IBM found that, following recent work from home experiences, more than 54% of employees now want to work remotely most of the time. As a result, companies are also having to rethink what skills are required to manage a more disparate workforce.

54% of employees want to work remotely most of the time

Internal communications will be a fundamental part of this, if companies want to successfully nurture their corporate culture and continue to develop their employees so they can remain creative and productive.

Changing the nature of the workforce creates challenges. And, according to McKinsey, 87% of executives are already experiencing or are expecting to experience a skills gap within a few years, as they struggle to get the right people in their organisations.

Businesses are likely to resolve this skills gap in three main ways though – through training, recruitment and/or outsourcing.

Businesses will resolve the skills gap through training, recruitment and/ or outsourcing

Most organisation’s first instinct will be to upskill the staff they currently have through training, but this will only be possible if those employees are willing and able to embrace those changes.
Alternatively, they may choose to recruit new team members with the right skills. But given so many other businesses will also be looking to change the composition of their workforce, we are likely to see an intense scramble for talented professionals in the near future.

Where the pace of change is happening fast, companies may prefer to avoid that training and recruitment headache and outsource specific tasks, such as specialist payroll services. By working with third parties that have expertise and experience in particular business functions, they will secure both the digital solutions and a skilled team to match.

The latter will allow them to achieve digital transformation without the need for any disruptive change.

But the route companies choose to take will vary depending on the nature of the business. The likelihood is we will see a combination of all three approaches being taken as companies try to keep up with the pace of digital change and restructure their organisations to fit the needs of the post-Covid world.


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