Nordic Organizations Now Need More than 11 Times Longer to Close Today’s Skills Gap

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Over 120 million workers in the world’s largest 12 economies may need to be retrained or reskilled as a result of AI and intelligent automation in the next three years. Our skills gap – also in the Nordics – is real and it is now taking 12 times longer than four years ago for organizations to close a skills gap via training.

According to new research from our IBM Institute of Business Value*, it took three days on average for European organizations to close a capability gap through training in 2014. In 2018, it took 36 days. With constantly tightening labor markets, it’s no surprise that only 41 percent of CEOs surveyed say that they have the people skills and resources required to execute their business strategies.

From STEM to behavioral skills

Business executives have also dramatically changed their thinking about the types of skills deemed most critical.

In 2016, IBM surveyed executives worldwide to rank the top 10 most critical employee skills. The top two were technical core capabilities for STEM (Science, Technology, Engineering and Math) and basic computer/software application skills. In 2018, those technical and digital proficiency dropped significantly in the rankings, coming in 6^th and 8^th respectively. For 2018, the top two skills sought by business executives were willingness to be flexible, agile and adaptable to change and time management skills/ability to prioritize. In contrast, according to an August 2019 IBM poll conducted by Morning Consult, ethics and integrity was the skill most often named most critical in a survey of consumers in US cities including Atlanta, Austin, Baton Rouge, Boston, Chicago, Raleigh and San Francisco. One reason for this disparity may be the current consumer conversation in traditional and social media about data and privacy. Consumers have an expectation that data and insights belong to the people and businesses who created them. From an ethics and integrity perspective, companies that collect, store, manage, or process data have an obligation to handle it responsibly — and successfully doing that depends on those companies’ employees and their own ethics and integrity.

This dramatic shift to behavioral skills is one reason we’re seeing more time needed to close the skills gap. In the past several years, companies have made great strides closing technical skills gaps through hiring and reskilling. But building behavioral skills is more complicated and requires more time. These types of skills are non-linear and take more to learn than just attending an online course certification or webinar. Navigating today’s technical landscape requires skilled workers who are effective communicators, able to apply problem-solving and critical thinking skills to innovate using new technologies – building these kinds of skills requires approaches like team mentoring, experiential learning, new ways of working, and cultural shifts within the organization.

These gaps will not disappear by themselves. If organizations don’t work to close these gaps and shift the way they manage talent, the negative impact to our local economies is likely to be in the millions. Nationally in the trillions. Despite this stark reality, many organizations we surveyed are just running in place, sticking with traditional hiring and training methodologies, or foregoing any dedicated training regimen. While global executives we polled acknowledge the severity of the problem, 50 percent admit they do not have any skills development strategies in place.

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How to close the skills gap

There are emerging tactics to effectively address the skills gap. For example, our research found that the tactics most likely to close the skills gap the fastest are leveraging new and emerging educational programs, applying analytics to predict skills supply and demand, and implementing skills recognition initiatives to recognize and track skills progression. Yet these are the tactics least used by the companies we surveyed.

Even in a tightening labor market, Nordic companies can help foster talent and narrow the skills gap by creating cultures of continuous learning; teaching employees how to be lifelong learners and nurturing a corporate culture that supports it.

Flexible, agile thinking about skills development is now required because the skills businesses need are evolving more rapidly than ever before. Countless jobs can now be filled by “new collar” workers, those that may not have a traditional college or university degree, but they have the necessary technical skills and aptitudes. The right skills can be achieved through modern vocational training, innovative programs like coding camps, 21st Century apprenticeships or professional certification programs.

What is IBM doing?

IBM is addressing the issue in a number of ways. We invest over half a billion dollars a year in education and have cultivated a digital learning platform for employees that provides AI and analytics-based recommendations on courses that align to hot market skills or an employee’s professional interest. We started where a lot of companies currently sit: with a skills challenge and no existing solution. Today, we now have over 1M digital certifications granted to IBMers worldwide and 8 in 10 IBMers have what we consider to be the skills of the future.

We’re also creating new education programs. In Nordics – as one example in Denmark – we have  in Komdigital partnered with authorities, universities, industry and employee associations to increase the digital competencies in small and medium size companies.  On a global scale, Pathways in Technology (P-TECH) , a six-year educational program that starts in grade 9 combines high school and college coursework with internships and mentoring to provide job-ready skills, work experience and a no-cost degree. The program is well on its way to hit more than 200 schools worldwide by 2019.

We’re also partnering with other organizations to advance thinking in this space; we just announced our collaboration with Josh Bersin Academy on its newest program, HR in the Age of AI , which focuses on how HR teams can use AI to transform the way they work across the enterprise, in the HR function and at the level of individual skill development.

Our 5,500 Talent and Transformation professionals are helping clients close the massive skills gap, helping their employees make the shift to partnering with intelligent machines, and addressing bias in the recruiting and hiring process. We apply end to end AI capabilities for every aspect of the employee life cycle, and provide state-of-the-art talent services and an always on, consumer-like employee experience.

In our work with clients, we’re using strategies that include the top recommendations provided by the new IBV study to close the organizational skills gap: 1) Make it Personal, 2) Turn up the Transparency and 3) Look Inside and Out.

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What you can do

The data may seem dire, but the opportunity for change is in front of every company. CEOs we’ve surveyed consistently rank investment in people as the number one way to accelerate performance.

The key to closing the skills gap is for companies to take a holistic approach to skills development that’s personalized to the individual, built on data and experiential fueled by new ways of working.  Being transparent about skill needs while personalizing at scale requires the use of analytics and AI to infer what skills are available. Sharing that information with employees motivates continuous learning in the most in-demand areas. This continuous skill building journey is delivered through experiences that go beyond structured education into areas like peer-to-peer learning through agile teams with heterogeneous skill-sets.

*“The Enterprise Guide to Closing the Skills Gap” is based on input from more than 5,670 global executives in 48 countries worldwide about mounting concerns over the widening skills gap and tightened labor markets.

If you have any questions, please do not hesitate to contact me at andersq@dk.ibm.com