In a McKinsey Global Study, some startling numbers were revealed by respondents around the globe:
- 87% have a skill gap now or expect to within the next 5 years
- 33% feel prepared to cope with skill gaps caused by emerging technology and market trends
The study also looked at the strategies that organizations are using to address the skill gap.
- #1: Hiring
- #2: Building Skills (re-skilling; upskilling)
- #3-5: contracting, redeploying, releasing
Some companies have started to address the skills gaps, and here’s what those respondents believe:
- 28% makes effective decisions on how to close skill gaps
- 60% does a good job of identifying which employees to reskill
Key take-aways from the study are:
- The problem is pervasive.
- A multi-pronged, strategic solution is needed to address the problem.
- Making good decisions on how to execute the strategy is difficult.
How to Decide who to Hire, Reskill, or Upskill
1. Know what skills are needed.
Conduct a skills gap analysis. Chances are, the Top 3 skills identified in the McKinsey study will be on your list and if not, they should be. They are:
- Critical thinking (higher cognitive skills)
- Advanced data analytics (technological skills)
- Leadership and management (social and emotional skills)
2. Know what factors predict success in learning and applying those skills.
The research is clear – there are individual characteristics that predict how likely someone is to have (or be able to develop) a specific skill. For example:
- Critical thinking: A person’s general cognitive ability (aka, “g” or IQ) sets the upper limit on their ability to develop critical thinking skills.
- Advanced data analytics: A person’s general cognitive ability also sets the upper limit on this skill. Math skills are also good predictor of technical aptitude. Some facets of personality can also help a person to succeed in an upskilling program, such as intellectual curiosity and openness to change.
- Leadership and management: People who are energetic, sociable, and assertive tend to emerge as leaders. But this does not mean that they will be effective leaders. Other personality traits, like compassion, emotional stability, conscientiousness, and openness play a role in leader effectiveness. A person’s preferred leadership style also predicts leader effectiveness. Specifically, a providing a moderate amount of structure and a high degree of consideration for people tends to be the most effective approach.
3. Gather objective data on your candidates and employees.
Use psychometrically sound tests and surveys that were designed for use in talent assessment and have strong evidence of content, construct, and predictive validity. This will give you an apples-to-apples comparison, minimize subjectivity, and help you to make better decisions. Specifically:
- Personality surveys based on the 5-factor model
- Cognitive ability tests (timed, with breakout scores for math and verbal)
- Leadership style survey
For the most accurate results, partner with a psychologist who can interpret the assessment battery and provide you with expert advice to help you make the right placement decisions, whether it be for hiring or skills development programs.
How this data-driven approach will help you to AVOID these costly mistakes…
1. Hiring people for their skills but they don’t actually have them. For example:
- Hiring a potential successor for a key strategic role who has great experience with top notch companies but lacks the cognitive ability needed to develop good critical thinking skills (yes, that happens – more often than you may think!)
- Hiring a data-analyst who doesn’t have strong math skills (yes, those exist!)
- Taking Skills listed on a resume at face-value (because most resumes contain falsehoods and self-ratings on skills are often exaggerated or inaccurate)
2. Putting the wrong people in skill-building programs. For example:
- Putting an emergent leader in a program, assuming all they need is leadership training to improve as a manager, only to find out 6 months after the training that they haven’t changed their style.
- Relying on subjective data (e.g., performance reviews, perceptions of others) as the sole placement criteria for skill-building programs and finding a trend that indicates bias in the selection process.
- Assuming your top Individual Contributors want to become leaders, putting them through a program after promoting them, and a year later, they quit because they were underperforming.
3. Overlooking talent. For example:
- Passing over a supervisor for a leadership upskilling program because they don’t appear to have leadership potential (when in fact, they do) and they leave to join a competitor that is investing in their development.
- Passing over an exceptionally bright employee for a data-analytics upskilling program because they don’t have enough foundational knowledge. (they can learn it!)
THE BOTTOM LINE. To stay competitive, organizations need to take a strategic approach to filling critical skills gaps and preparing for the emergence of new skills, some of which are still unknown. Doing this requires a scientific, data-driven approach to hiring and selecting people for skill building programs who have high potential to learn, adapt, and develop critical skills in others. To find out more about how PCI can help you do just that, contact Deborah Bell, Vice President of Consulting: firstname.lastname@example.org.