4 lessons in workforce skilling and lifelong learning

Digital transformation, automation and the effects of the COVID-19 pandemic are resulting in massively shifting skill needs for the workforce.

These dynamics affect everyone: people, businesses, and whole economies. For businesses, vision and aspirations for the future often require skills not fully covered in the company yet. Already before the pandemic, skill shortages loomed as technology transformed industry after industry.

McKinsey & Company reported in early 2020 that 87% of companies are either currently facing skills gaps or expect gaps to emerge in the next five years. At SAP, for example, we foresee increased demand not only in technical skill areas like artificial intelligence and Cloud, data analytics, business process analysis and web design, but, equally important, in soft skills like innovative thinking, decision-making, leadership and handling ambiguity.

So how can you best cope with these challenges – and turn skills into a competitive edge?

Define strategic workforce and skills planning based on your business strategy and investment direction

While many companies are quite sophisticated when it comes to defining business strategy and investment planning, the people and skills implications often only come as an afterthought.

In some cases the need for this only becomes evident once skill gaps have already materialized as an obstacle while executing the strategy. Finding yourself behind on the skills curve may force you into fire-fighting, or worse, downscaling your ambitions.

This can be avoided. Your people strategy needs to support your business strategy, and skills are the currency – the ‘glue’ – that helps connect vision and future direction of a company and related strategic workforce planning.

You should therefore look into how you can establish a strong connection between your desired direction and resulting learning needs and skill transformation from day zero.

Creating a “roles and skills framework” and transparency across your workforce

Most companies have established a framework of defined roles as the backbone of their workforce management. For example, in software development we have typical roles like developer, architect, product manager, designer, scrum master, consultant, data analyst etc. Each of these roles is characterized by defined responsibilities, task descriptions, and, yes, a fixed list of skill requirements, too. You probably plan your workforce in roles, you hire for roles, your paygrades are attached to roles.

In the digital age we live in today, role definitions, have become more fluid and they change dynamically. Rather than static roles, skills increasingly become the primary planning entity, the currency of strategic workforce planning. Likewise, from an employee perspective, continuous skill development in line with new requirements and opportunities has become the lifeblood of career development.

The primary question when developing your workforce in support of your business strategy is which skills need to be learned, uplifted, hired, or even unlearned. Dynamic role definitions will then “package” each skill into one or several roles as needed – with definitions that may frequently change.

Defining such a framework of skills and roles goes hand in hand with the question of how to establish transparency across your workforce: which employee has which skills at which proficiency level?

Proactive skills transparency and management concepts are typically most present and sophisticated in people-heavy operations like service businesses where the need is most obvious. They are used for matching skills to operational tasks, such as finding a service technician to fix a machine or to staff a project.

But systematic skills management brings potential beyond operations and is likely to take a much bigger – and more strategic – role in the future.

Standardizing skill taxonomy and people profiles beyond company boundaries

While it is already a huge step forward to establish such a roles and skills framework for your company and its specific business needs, many related questions in fact do extend beyond your company boundaries.

For example, if your workforce plan requires you to build up specific skills, wouldn’t it be great if learning providers and universities tagged their offerings according to the same skill language and taxonomy, so you could easily identify fitting learning that already exists on the market rather than recreating the wheel yourself?

Or, if you want to hire someone with a specific skill, wouldn’t it be so much more efficient if other companies, and the labour market, used this common language to match credentials? To address this, the World Economic Forum has started to develop a common skill taxonomy that can become the backbone of connecting employers, governments and learning providers within a skill-based labour market.

From an individual’s perspective, skill management beyond company boundaries becomes an important question. As people-to-company assignments are likely to become more fluid and dynamic in the digital economy, individuals should be able to take their skill profile with them from one company or project to the next – and continuously evolve it.

The first step towards establishing such a company-independent “digital skills record” has already started with the rise of digital badges, which can be published in a verifiable way on social business networks, most importantly LinkedIn. I am sure we will see more developments in this direction in the future.

Even if you get all the mechanics right in establishing great skill management, your success will depend to a good extent on how well you establish the culture that goes with it.

For forward-looking skill management to be truly embraced, the “play-it-safe” mindset needs to be shed and replaced by a cultural belief that skills are the fuel of innovation and success, that they can be learned, updated and re-learned, even unlearned - sometimes via targeted and guided programmes, sometimes via experimentation or even failure.

Such cultural changes don’t happen overnight, and they start at the top. It is therefore important that you invest in developing your leaders’ capability to foster a learning culture and embrace ambiguity, drive agility, deliver experimentation and inspire curiosity and the desire for lifelong learning.