Fearing disruption? A skills-based talent strategy builds business resiliency

IT skills gaps are derailing digital transformations, leaving businesses at risk of disruption. By reshaping hiring processes, implementing upskilling strategies, and adopting a skills-first mindset, IT organizations can better help the enterprise thrive.

To weather disruption, resiliency is essential, but building a culture that is capable of adapting to a constantly changing technology landscape is challenging given escalating skills gaps today. According to a survey from SAS, only 47% of executives view their organization as resilient despite 97% agreeing that the trait is vital to business. Additionally, 46% said they are “not fully equipped to face disruption” especially when it comes to data security and technology innovation.

Some of this can be attributed to a growing skills shortage, especially in emerging technologies such as AI, generative AI, NLP, and machine learning. In a report on enterprise resilience and IT skilling strategies, IDC predicts that by 2026, 90% of organizations worldwide will “feel the pain of the IT skills crisis,” ultimately costing businesses upwards of $5.5T due to delays, quality issues, and revenue loss.

Organizations that make a shift toward a skills-based mindset will be better positioned to close that skills gap, proponents argue. By identifying candidates by skillsets rather than experience and by upskilling and reskilling employees to meet new business needs, organizations will increase their ability to establish greater resiliency.

Continuous skills development is the way

And the stakes are getting higher. Nearly two thirds of IT leaders (63%) say that a “lack of skills has delayed digital transformation initiatives, most by an average of three to 10 months,” according to IDC. Only 56% of IT leaders said the same about digital transformation delays in 2022, indicating that the problem is only growing as the demand for new skills increases.

“It’s important for IT leaders to understand that being proactive in developing the skills of their tech workforce is crucial to helping future-proof their operations against technological disruption. Those who invest in the right skills — and help their workforce gain new skills — are likely to remain ahead of the wave of digital transformation,” says Ryan Sutton, a technology hiring and consulting expert at Robert Half.

Developing the skills necessary to support transformation initiatives builds business resiliency. By anticipating future skills needs, IT leaders can ensure their organizations have the right training programs in place to upskill workers as necessary, Sutton says.

“If company leadership establishes and supports a culture of continuous skills development, then its organization will likely be accustomed to adapting and applying a diverse set of skills to successfully work through disruptions in the technology industry,” he says.

Skills gaps have business impacts

But IT leaders have work to do to get there. Sixty-five percent of technology leaders currently see a skills gap within their department, and 62% say they “feel the impact of the skills gap is more apparent now than a year ago,” according to data from Robert Half. 

“Technology is constantly changing, so businesses need to be flexible and malleable to the current demands. Organizations that adopt a skills-first approach might be able to respond more quickly to specific business needs,” says Sutton.

The survey from IDC found that 60% of IT leaders say the skills shortage is causing delays in hardware and software deployments, up from 57% in 2022. Other ramifications include a delay in developing new products and services (62%), difficulty meeting quality objectives (59%), and a decline in customer satisfaction (59%).

“The best way for IT leaders to know which skills gap would be a threat is by establishing a strategic workforce plan connected to changing business demands. Some organizations are getting better at building databases that track employee skills in real-time as opposed to relying on job descriptions, which may not always be accurate or updated. It’s time to understand what skills exist on your team to help identify gaps,” says Jose Ramirez, director analyst at Gartner.

Adopting a skills-based approach can foster resiliency and agility by making it easier to gain insight into specific skills your organization is lacking. A skills-based mindset can also open the talent pipeline, as CIOs who have adopted the approach are finding, by bringing in candidates who don’t have the exact experience or traditional educational background you might be looking for but have the hard and soft skills necessary for the job.

“In a sense, skills are just data, and data-informed talent decisions are better than decisions made because of affinity bias or any other bias that humans naturally lean towards. It provides a more objective approach, as long as those skills can be verified in some way through assessment or demonstration,” says Betsy Summers, an analyst at Forrester.

The skills-first approach to business resiliency

According to a report from McKinsey, investing in talent and culture is a key trait of resilient organizations. These companies build adaptable environments more likely to attract and retain top talent, which in turn, strengthens organizational resiliency further, as these workers “perpetuate the cycle of resilience,” McKinsey’s researchers conclude.  

In resilient organizations, leaders have already driven initiatives to create the framework to address “current talent-management challenges — and those to come,” according to McKinsey. This includes investing in analytics for better talent management, altering the hiring process to open the talent pipeline to more diverse channels, creating simpler application processes, and identifying internal candidates who would benefit from upskilling, certifications, and apprenticeships.

Embracing unconventional hiring methods and shifting to a skills-based mindset will be critical for building resiliency in the skills shortage. As McKinsey points out, “every company is a technology company,” yet 90% of global senior executives say their companies are “unprepared to address the gap in digital sills.”

“Since it is difficult to hire the exact talent profile for a particular role, a skills-first approach can help organizations find talent faster. Skills-first can also build resilient teams. In fact, 70% of enterprises are starting to prioritize skills-based over role-based learning, and these enterprises that were successful with achieving business and talent outcomes through upskilling strongly agree with this approach,” says Gartner’s Ramirez.

McKinsey’s researchers also point to further research that shows that diversity of thought and experience can also benefit an organization, adding that “hiring for potential rather than the perfect fit can boost internal mobility, employee loyalty, and corporate capabilities long term.”

Foster a culture of learning with upskilling and reskilling

Gartner’s CIO Talent Planning for 2024 survey revealed that upskilling and reskilling current employees was top of mind for IT leaders, with 69% planning to do so in the coming year. This is especially true for skills in high demand, given the challenges of competing in the hiring market for them.

“Since some skills in IT are more difficult to recruit and hire — for example, cybersecurity, AI, architecture, and cloud computing — organizations should upskill and reskill for these instead of hiring,” Ramirez advises.

Developing training and courses for your employees can be a huge undertaking and investment, but the programs need be engaging, productive, and beneficial for your staff. The IDC report uncovered what learners dislike the most about training programs, which includes courses that are too long (37%), limited options for learning (34%), no alignment between skills and career goals (31%), too boring and dry (30%), low production values (29%), and no relevance to daily work (23%).

Strategies that learners found to be the most beneficial include games and quests (35%), hands-on labs (34%), mentorship (30%), self-paced courses (30%), virtually led instruction (28%), hackathons (27%), and learning communities (26%).  Classroom training was ranked the least effective strategy, with only 11% saying they found this format beneficial.

Other ways to foster a culture of learning include implementing job rotation programs, to give employees the chance to gain experience across the business and explore various career paths, and promoting knowledge sharing through community forums, social platforms, courses, webinars, and conferences.

Bringing in external trainers or consultants to lead custom workshops on new technology topics and tools is another worthwhile pursuit, as is providing hands-on opportunities for employees to experiment with tools in a sandbox environment. Hackathons and innovation challenges focused on areas where the business needs more skilled workers are other popular ways to ensure your organization is ready for what’s next.

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