Workers’ Digital Skills Gap a Key Challenge for Businesses, The Hackett Group Says

Digital transformation has and will continue to have far-reaching consequences in manufacturing, purchasing, compliance, advertising and just about every other function in the business world. Another function to add to the list, according to the April 2019 Hackett Group study, will be hiring and training of existing and incoming employees.

The Next-Generation Talent Profile: How Will You Fill the Digital Skills Gap focuses on how the procurement function in particular will need to train and improve their existing workforce, because the demand for skills and knowledge like strategic thinking, smart automation, social media, creativity and innovation, and process excellence will far exceed supply over the next three to four years. The Hackett Group notes that research by the World Economic Forum indicates that more than 50% of existing workers will need to be reskilled or upskilled by 2022.

The Hackett Group surveyed executives in finance, human resources, procurement and IT to understand their top development objectives for the coming year. Of those, 87% ranked enterprise data and analytics development as a “high” or “critical” priority, while enterprise digital transformation ranked 85%.

Shifting the enterprise to a more customer-centric focus was also ranked as a high or critical priority by 67% of executives. And while about a third of procurement executives believe digital transformation has a sizeable impact on functional roles, skills and business needs today, over half — 56% — believe it will be highly relevant in 2 or 3 years. In terms of getting the job done, 60% of procurement executives believe digital transformation will have a high impact on their function’s ability to achieve enterprise objectives in 2 to 3 years.

On an even shorter time scale, the ability for workers to master specific skills and software anticipated to be broadly adopted will be crucial to meeting the needs of an organization into the future.

Cloud-based and SaaS applications are routinely used in just 25% of procurement departments, but the number is expected to rise to over 60% in just two years; data visualization tools will jump from use in under 20% of procurement departments to over 50% in the same timeframe. Existing or new employees will be at a serious disadvantage in just one or two years if the existing digital transformation skills gap persists.

As automation continues to streamline repetitive tasks and produce ever greater volumes of data, business service roles will evolve, the Hackett Group predicts, to become agile problem solvers, comfortable throughout the business and with a data-savvy, strategic mindset, and relationship skills that allow them to tackle some of the most multifaceted challenges the business faces.

These workers will use data and deep business acumen to create forecasts and understand operational and customer needs, developing strategic visions and addressing market changes with the help of subject matter experts within the organization. These more specialized workers will need to master new skills as well, being expected to speak competently across a variety of analytical ideas and knowledgeably about the specifics of the needs and direction of their particular function.

Another View

In CIO magazine, analyst Charles Araujo offers three secrets that companies can do right now to accelerate their digital transformation progress and foster greater innovation in the digital era.

Secret No. 1: Gaze to the future, but act in the present

The gist is to understand your business, know the technology trends on the horizon — and be willing to bet on a solution that may not be fully proven.

Secret No. 2: Lay the foundation with standardization

"Even though we move quickly with adopting new technologies, we establish a standard and document very well how everything integrates together," said Erik Ubels, CIO/CTO of Dutch smart building developer EDGE Technologies.

Secret No. 3: Change the mindset

“Innovation … requires buy-in and participation across the enterprise. … This need for buy-in can be a significant barrier to adopting an enterprise-wide innovation culture,” the article states.

Hackett Study: Gap to Get Larger

The Hackett study also showed how the skills gap is viewed by executives.

If the existing skills gap for digital transformation seems large now, executives surveyed expect an even larger gap to develop in the next two years. Only 50% of employees are viewed to have the appropriate level of tech savvy and only 55% data savvy, while demand for those and other similar soft skills is expected to rise 80% and 89%, respectively.

With such requirements it’s clear the gap will not be filled through new hires alone, and the Hackett Group emphasizes the need for an integrated talent management strategy for businesses that want to remain competitive. As automation and agile operating models become the norm, companies will need to devote appropriate resources to identifying shifting talent needs and developing programs to retrain and develop the talent of their existing workforce.

Project management and critical thinking skills are foundational and allow many flexible workers to move throughout the business to areas where they are most needed. Lifelong learning opportunities like master classes and professional certifications help align skills requirements with new expectations for workflow and core competencies while familiarizing workers with leading edge technology and practices. Changes in employer value propositions to compensation, benefits and work-life balance will also be critical in maximizing performance of existing employees and attracting new talent with the desired skill set.

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