A skill gap is forcing chief executive officers (CEOs) to change how they hire people, says a PricewaterhouseCoopers (PwC) report.
CEOs are now finding it difficult to pick people with the skills they need to grow their business, three-quarters of the 1,322 CEOs interviewed in 77 countries by PwC rank skills shortage as the biggest threat to their business.
This represents a 10 percentage point jump from 2014 and is up from less than half (46 per cent) six years ago. CEOs in Japan and South Africa are the most concerned. Over nine in 10 of those surveyed say the availability of key skills is a threat to their organisation's growth prospects. Closely followed by China (90 per cent), Hong Kong (85 per cent), UK (84 per cent) and Romania (84 per cent).
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"Even as new workplace models are being explored and created, close to three in four Indian CEOs are planning to increase headcount in the coming year. A large number are also looking to partner with the government to develop a skilled workforce and there is clearly a lot of focus on capability building as a key requisite of continued growth," said Padmaja Alaganandan, People and Change Consulting leader, PwC India.
There is continued focus on leadership development too, with the expectation that leaders should be able to drive a growth-oriented mindset within the regulatory framework, have the ability to take controlled risks, and build an adaptable and agile organisation with appreciation of consumer behaviour and trends.
"Diversity and inclusion is emerging as a conscious strategy to build the talent and leadership pipeline. Increasing use of analytics is helping predict talent sets more likely to succeed in the company's cultural context and business environment. Once on-board, employees are placed in continuous learning and mobility programmes to develop new skills," Alaganandan added.
To solve the talent conundrum, CEOs are increasing their use of contingent workers, part-time employees, outsourcing and service agreements to fill their talent gaps. They are also looking for a wider mix of skills than in the past and are searching for talent in different geographies, industries or demographic segments.
Filling talent gaps is also a major driver of mergers and acquisitions (M&A) activity, with over a quarter of CEOs saying that access to top talent is the main reason for collaborating with other organisations. This is creating a 'gig economy', where workers with the most in-demand skills can dictate where and when they work, and who they work for. Jon Andrews, leader of PwC's global people and organisation practice, said: "Despite rising business confidence and ambitious hiring plans, organisations are struggling more than ever to find the right people with the right skills to achieve their growth plans... but these people are hard to find and they can afford to charge a premium for their skills."
Organisations can no longer continue to recruit people as they've always done - they need to be looking in new places, geographies and from new pools of talent. Businesses also need to make use of data to understand exactly what skills they need, and where they will need them, to focus their future hiring efforts.
"Businesses feel that the government has an important role to play in solving the skills gap - six in 10 said creating a skilled and adaptable workforce should be a top priority for government," the report added.
