The waves of digitalisation are still disrupting business, and many companies have come far in exploiting the possibilities digitalisation presents. However, one of the challenges identified by our 2018 HR study (see Figure), was not just digitalization, but the critical skills of the leaders and workers required to cooperate in new ways and with shifting business models.
In business life we are surrounded by dilemmas, and HR is no exception. The choice of whether we develop our own people or recruit new talent is one. The choices between developing a small group of selected talents or develop the whole organization is another. How these dilemmas affect L&D and training was of particular interest, because it highlighted a problem that has not yet been resolved. Although many companies have started to get a sense of control over their digitalization processes and technical needs, there seems to be some growing concern regarding how to exploit it most effectively. It is not yet a new era of post digitalisation, more a question of the human aspects of what new ways of working really mean, and if we are ready for that.
Critical competences – what’s changed?
In the time period between 2011 and 2018, the number of organizations who had a clear understanding of what their critical competencies really are has dropped. New ways of work have changed and challenged their definitions of critical competences, and the shift seems to highlight aspects of interpersonal skills or soft skills. These are often difficult to define, identify, measure, and develop among the workforce, but nonetheless they have increased in importance since they are not just necessary during the transitions and change process, but required to be productive after. While other skills can be categorized “temporary, but important right now”, interpersonal skills could be viewed as stable skills by comparison. Even if line-managers could argue that they know who has these skills, there is little evidence showing how effective development or recruitment of such skills are.
The study results show that 38% do not measure the competence gap at an individual level, and while they still might have an idea of who possesses the right set of these competencies they are struggling to keep them in their organization. On the other hand, 73 % of organizations who manage to measure these gaps at an individual level report that they are successful in retaining their critical talent. When looking at companies with different sizes, it is also clear that small companies have the upper hand. 70% of small companies report having processes to identify people with critical competencies, while big companies struggle. Only about 30 % of big companies have such processes in place. Having a clear idea or definitions of “new” critical competencies is obviously necessary to be able to develop or recruit people.
What do they do?
Over 75% of the companies in our HR Study report that they are short of competencies, and this might increase further down the line as the new ways of work evolve further, spreading across industries. VUCA is not just more change but changes in a lot of areas – at the same time. This means that companies must work faster getting the right people and competencies in place who can manage to work in teams with externals, cooperate within and across company borders, as well as not just adjusting to new business models, but also take part in developing new models perusing opportunities.
But when looking at what the organizations do to fill these gaps (see also Figure) a story of unsolved dilemmas is revealed. When we asked the organizations to rate the use of different elements in their work force strategy, recruitment and development, was as expected rated highest. However, compared to the results from 2011, the use of development has decreased. In 2011 organizations rated development 5.7 (on a 1-7 scale) and in 2018 it was reduced to 5.0. But when looking at the use of contingent acquired workers, there was an increase from 3.5 to 4.3 (on a 1-7 scale).
When analysing this further, another finding appeared. The companies that were successful in retaining employees with critical competencies followed the opposite pattern. They scored higher than average on development, and lower than average on the use of contingent workers.
Even though organizations recognize the increased need to be able to work in new ways of work and applying new business models, they are (in overall) reducing development of their people at the same time as they are increasing the use of contingent workers. In the context of interpersonal skills, this would imply that they either underestimate the skills necessary to operate within these more complex business models or overestimate their actual competencies and abilities to exploit these new relationships.