How to identify and close the skills gap to accelerate digital transformation

The speed and scale of digital transformation has accelerated due to the Covid-19 pandemic and turned digital initiatives into digital imperatives. This escalation puts significant pressure on HR leaders to rethink the skills needed as business models are continually changing.

As HR Leaders looked at what will be needed to digitalise their companies, they saw there was a fundamental skills gap, with 64% saying that they don’t believe their employees will be able to keep pace with the future skills needed, and 70% of employees are saying that they haven’t mastered the skills they need for their current roles.

Further, most companies are currently flying ‘data blind’ about the skills they need to transform. A recent TalentNeuron survey found that 53% of respondents said that the inability to identify skills was the number one reason they weren’t able to transform digitally. 31% said they had no way of identifying market-leading skills.

What are the three key technologies driving digital transformation?

Artificial Intelligence

AI is covered by a range of programs that typically will do one of two things: automate routine, algorithmic tasks, or process large data sets for business forecasting purposes.

Anything as a Service (XaaS)

In general terms, Anything as a Service is the migration of software and data from your servers to external servers and platforms. This isn’t a new phenomenon, as IT departments have routinely migrated nearly 25% of all business data to the cloud over recent years. By doing this, it allows companies to pivot and adapt to new technologies with little risk.

Robotic Process Automation (RPM)

Robotic Process Automation is automating physical tasks with physical machines to relieve employees from performing repetitive and tedious tasks by hand.

Many other technologies are part of digital transformation, including blockchain, augmented reality, virtual reality, and the Internet of Things (IoT). In common with AI, RPM and XaaS, they are all changing rapidly and offer a significant competitive advantage to companies who adopt them quickly.

How can HR identify skill trends and development needs?

Gartner TalentNeuron has developed a new strategy to help HR leaders to fill their critical skills gap. Their system is built around identifying talent skills that are adjacent to the required skillset. These skills adjacencies can then be used to upskill or reskill employees to address the organisation’s skill gaps.

This approach requires companies to do the following:

  • Look at skills available throughout the organisation, not just by individual function.
  • Fill the critical skills gaps by utilising the skills adjacencies you’ve identified and use them to guide upskill or recruit potential talent.
  • Enable and promote cross-functional mobility using stepping-stone skills to bridge skills gaps.

To become proactively involved in the conversation around digital transformation, HR leaders need to ask three key questions of the company’s leadership.

  1. How is our operating model changing? What does this mean for our organisational structure? Changing technologies isn’t plugin and go but needs simultaneous changes in many areas. Effective and visionary employee engagement and training can help achieve a successful transition.
  2. Do we have the talent we need? Do we need to bring in appropriate talent? Are we in the right physical locations to source the right talent? Are there skills we need to build internal, like coding, to help maintain and optimise the new technologies?
  3. How will we consistently iterate what we are doing? As digital transformation is an ongoing process, would using the change management skills of HR to gather feedback and provide insights for ongoing improvement be beneficial?

How a hybrid workforce model can speed up digital transformation

Covid-19 has been the driver for accelerated digital transformation forcing businesses everywhere to reset their strategies to respond. The deficit of digital skills in many organisations could be the one thing that may delay or completely stop their transformation aspirations.

The good news is that the pandemic has changed the way we work, which gives HR leaders a window of opportunity to leverage the new hybrid workforce model. Deliberately designing how employees’ transition from solo working from home to microsites to traditional office settings is the essence of hybrid workforce planning.

For hybrid working to be effective, the myths and long-held beliefs around where work is done most effectively need to be addressed. George Penn, VP, Gartner adds, ‘Where, and when work gets done will be determined by what makes the most sense to drive the highest levels of productivity and engagement’.

Covid-19 has forced organisations to manage a scattered and disrupted workforce; now, they have the opportunity to rethink company structures and work design. Though hybrid working can be challenging, it has the benefit of offering agility and resilience and drive competitive differentiation while containing costs.

What do HR leaders need to do now?

‘Talent and labour market analytics provide the ammunition to drive hybrid workforce decisions about skills needs, locations and costs,’ says Scott Engler, VP, Advisory, Gartner. ‘Those decisions are what will enable the accelerated pace of digital transformation in a cost-effective way.’

  1. Locate affordable digital talent – traditionally, searches for appropriate talent would have taken place near the workplace. With hybrid working, affordable, suitably qualified employees can be sourced from fast-growing IT centres overseas.
  2. Identify emerging skills – All companies are seeking employees AI and cyber-security skills. Look at what the competition is doing to assess what other skills may be valuable.
  3. Hire for transportable skills, not industry experience – expand the size of your available talent pool through skills adjacencies and assess candidates whose skills can be developed to fill the role.

How the pandemic has accelerated digital transformation

It’s estimated that Covid-19 has accelerated digital adoption by five years, which has caused a considerable skills shift, with leaders ill-equipped to manage the fallout.

Every company will transform digitally; it’s inevitable they are going to need to adapt and reimagine new ways of creating value for customers. Senior leaders must be able to deploy and align the right skills to address shifts in working practices, processes and company structures that will drive their digital transformation.

Digital isn’t shorthand for remote working but should involve improved productivity, cost reduction or new digital commerce and revenue sources. Companies that were on the cusp of digital transformation before the pandemic are surging ahead, while their analogue competitors scramble to catch up.

You need to plan for your business’s digital evolution, not base it around how work is being done now.