How to solve the skills shortage

We know we are facing a global and local skills shortage. In parallel an increased interest in work autonomy and flexibility is observed. Digitalization, technology and transformation are often skills gap drivers, and the skills requirements are often limited in time. When we efficiently match the need for capability with the right leadership skills and required execution power, at the exact right time, this labor force shift will have real economic benefits. It will raise labor force participation, stimulate consumption, provide opportunities for the individual, and boost productivity.

 

What is the magnitude of the skills shortage?

We know we are facing a global and a local skills shortage. IT- och Telekomföretagen said in November 2017 ”The full scale digitalization ongoing in Sweden and globally has resulted in the digital sector becoming the strongest market growth force. Now the continued growth is threatened by the skills shortage. A 70 000 IT and digital professionals shortage is expected by 2022.”[1] Manpower Group reports in its Talent Shortage Survey 2016/2017 that employers today experience the largest skills shortage since 2007. Nearly half of employers are offering training and development to existing staff.  At the same time 44% of employers are exploring new talent sources by recruiting outside the talent pool, and 27% are using alternative external sourcing strategies.[2]


The digitalization will change our society completely. … We stand before a gigantic shift of skills, equally large as when mass production created consumption society.

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Ulf Ewaldsson, then Head of Technology and Research & Development at Ericsson, said 2016; ”The digitalization will change our society completely. Technology has not played such a big part for the development since the industrial revolution. – We stand before a gigantic shift of skills, equally large as when mass production created consumption society.”[3]

Digitalization, robotics and automation were the themes at the conference arranged by Arbetsmarknadsdepartementet (Ministry of Employment) and Nordiska Ministerrådet (Nordic Council of Ministers) in Stockholm in May 2018, and the conference focused on how the technological development will impact the workforce of the future, what skills will be in demand, the skills shift and the need for lifelong learning. Mark Keese, OECD, emphasized the crucial need for lifelong learning and mentioned this is relevant for basic foundation skills as well as ICT, technology skills, platform economy skills and complex problem-solving skills. As a result of the world becoming more integrated the gig economy increases rapidly, he concluded.[4]

 

Future of Work and future required skills

In 2025 Millennials will represent 75% of the global working age population. These digital natives are typically excited by technology. The changed workforce dynamics in parallel with the skill shift pace, as a result of digitalization, automation and technology development, means we need to utilize skills and resources much more efficiently, and a different leadership will be required. Future leaders will increasingly work in horizontal organizations where co-creation is the norm. Work will be more agile and project oriented emphasizing collaboration and skill sharing. Customer focus is the natural focus of many organizations, and the organizations will need to adapt to support customer focus and value, end to end. The role of the future leader will be more focused at motivating and coaching and the hierarchical business function siloed organizations which supported the industrialization will be less relevant. As the availability of information continuously increases and pace of change speeds up, the need for knowledge increases. Lifelong learning needs to become a core competency, for companies and individuals to stay relevant. Innovation will be key to stay competitive and leadership, culture and operating model need to empower employees to innovate.

 

Matching demand exactly and at the right time, is key

It will be difficult, in many cases impossible, for companies to source the required transformation and change management skills needed, internally. Requirements also shift quickly. When transformation and change are implemented, different leadership skills will again be required to anchor and operate the new solutions. Many companies stand in front of complex future transformations. Timely availability of the right skills combined with execution power and full mandate to execute, will define success.

Strong leadership skills combined with change and stakeholder management experience and relevant industry and functional skills are scarce. Executive Interim Professionals fill this gap. Demand exists throughout the execution phase and is therefore limited in time. Matching the demand exactly and at the right time is key, and results will be defined by leadership authority and mandate, which often disqualifies consultant-based solutions. In addition, the change needs to be executed in and by the organization, to obtain sustainable results. Optimizing results will require strengthening leadership skills with full mandate.

To pen his latest book, The Interim Revolution, Pat Lynes interviewed over 100 corporate executives from several different industries. Major trends such as crowdsourcing, the gig economy and ‘SWAT teams’ are set to transform the way businesses globally procure external advisory. Lynes further predicts that the future of management consulting will move towards a gig economy. The use of interim teams with businesses harnessing potential of executives as pre-gelled business ‘SWAT’ teams which can be parachuted into businesses to solve problems at speed, disbanding as quickly as they arrived. He argues that interim teams offer far better value for money; project-focused results-driven work; flexibility and the ability to react at speed, all whilst being able to inject expertise and capability around a variety of disciplines instantly. “Ultimately, interim work is not just an emerging trend. It’s the new normal, the new way of working. So, the sooner organisations embrace this way of working (as an enabler, rather than a cost), the more empowered they will be in the future, as the competition for high quality tech and strategic executive talent becomes even fiercer.”[5]

Today the largest freelance intermediaries close recruiting demands faster than ever before and these companies already work with millions of customer and millions of freelancers. Upwork reports freelancers and Interim Professionals will constitute the majority of the US workforce by 2027. Upwork also concludes 63% of Freelancers and Executive Interim Professionals agree having a diversified portfolio of multiple clients is more secure than having one employer. Of those who left a traditional job to freelance, nearly 2 in 3 say they now make more money than before.[6] McKinsey Global Institute estimates independent workers make up 20-30% of the US and EU-15 working age population today, equaling 162 million people.[7] Demand will increase fast also in Sweden and Nordics, and Interim Professionals is key to solve for the skills shortage. This shift could have real economic benefits by raising labor force participation, stimulating consumption, providing opportunities for individuals, and boosting productivity.

 

Charlotta Kvarnström
Partner, Nordic Interim Executive Solutions

 


[1] IT & Telekomföretagen, Rapport IT- och telekomsektorns kompetensbrist. En översikt över behovet av olika yrkesroller samt förslag på åtgärder.

[2] Manpower Group, 2016/2017 U.S: Talent Shortage Survey

[3] IVA Aktuellt, nr 2 2016.

[4] Arbetsmarknadsdepartementet & Nordiska Ministerrådet, Conference May 15-16, 2018; How the technological development will impact the workforce of the future, and what skills will be in demand

[5] Pat Lynes, by Consultancy.uk, May 2018

[6] Edelman Intelligence (Commissioned by Upwork and Freelancers Union): Freelancing in America: 2017

[7] McKinsey Global Institute, Independent work: choice, necessity, and the gig economy. October 2016.


NewsAnn Johansson