Lack of talent, skills and labor topped the list of revenue constraints in the Gartner 2014 CEO Survey earlier this year—seeming counter-intuitive in relation to the unemployment rate (in 2013, the global employment-to-population ratio stood unchanged from 2012 at 59.6 percent, still below the pre-2008 financial crisis level of 60.7 percent as reported by the International Labor Organization). However, a closer look at employment and production trends in the U.S. shows that this CEO challenge, voiced at the start of 2014, is being proven out by a combination of job growth, lower unemployment and falling U.S. annual real GDP rates. It may also be exacerbated by what Deloitte’s 2014 Global Human Capital Trends Report calls the “overwhelmed employee.”
The U.S. Bureau of Economic Analysis in June reported real GDP in the U.S. declining at an annual rate of 2.9%. The U.S. Department of Labor reported in early July, average growth of 272,000 jobs for the prior three months. The rate of growth and reduction of unemployment may further increase throughout the year: The Fed hadn’t expected the current unemployment rate (6.1%) until the end of 2014 and here we are, halfway through the year. This may portend a looming global skills shortage: McKinsey Global Institute predicts a global shortage of college-educated workers of between 38 and 40 million by 2020.
Arguably there remain workforce dropouts, the underemployed and stagnant wages; and yet wage growth will require consistent revenue growth. Conversely, companies will struggle to grow revenues without the proficient participation of the labor force, with an emphasis on proficiency. Those who have left the workforce or are underemployed often fail to gain the skills needed in today’s reengineered organizations, which are fast moving towards digital workplaces. The challenge of employee proficiency (and rates of change of proficiency) within organizations ironically stems from the over-abundance of knowledge, information and systems. It’s compounded by economic, marketplace and technological changes that require companies to be agile enough to adapt in near real time.
The Deloitte report further underscores the challenges companies are facing with significant skills gaps that today’s workforce is simply not available to provide, a trend which will continue. According to the report, “As the environment in which businesses operate becomes more complex, skills evolve and become obsolete more rapidly.” Changes must be made in how companies enable training, moving from a “push,” classroom model to a “pull” model, where, according to Deloitte, “learning and development is a continuous process, with training pulled seamlessly through computers or mobile devices anywhere, anytime.”
Knowledge workers, accustomed to facile discovery outside of work, look to employers to help them learn new skills and increase proficiency on the job; it is one of the key reasons they choose to join or remain with an organization. And yet, according to Deloitte, “Information overload and the always-connected 24/7 work environment are overwhelming workers, undermining productivity and contributing to low employee engagement.” Precisely that which exists to help employees gain skills and increase proficiency – collective enterprise knowledge and information – is overwhelming them.
Proficiency – and productivity – are further impacted when employees are overwhelmed. Always-on via mobile devices, and yet unable to find what they need to increase their proficiency and complete complex tasks, employees waste more than 40 percent of their time on things that do not help them accomplish their work and provide no personal satisfaction.
The nature of work has changed, and is continuing to evolve, due to the needs and preferences of knowledge workers, the rates of change in markets and technological advances. Unless business leaders recognize this and adapt, we may face a perfect storm that drags productivity ever lower and organizational risk ever higher. The current shortage of specialized skills; anxious and overwhelmed employees (who have many choices of where and how to work); and a looming global shortage of college-educated workers in the next six years, all point to the need for change. We must change how we think about proficiency, how we help employees gain new skills and become proficient at them, and how we help employees more easily access and engage with the rich information available today, to help them do their jobs, when and where they need it – in ways that augment rather than disrupt their work flow.