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CEOs are seeing broader and more impactful threats to growth, and the concern around the availability of key skills continues to be front and centre. In fact, 71% of Australian CEOs feel that a lack of key skills is a threat to their growth. And 62% say their people costs are rising more than expected because of this skills deficit.
Many CEOs are embracing the challenge of a shifting workforce where the future will look significantly different due to unprecedented shifts in technology, workforce demographics, globalisation, regulation and changing customer behaviour.
But they face barriers to building the required workforce because of limited insights into current workforce capability and future requirements, which means education institutions are finding it difficult to prepare students adequately for the future of work.
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Availability of key skills is a threat to growth and with the demand for certain skills at an all time high, many businesses are having to reflect on how to attract, train and retain their workforce. There is an opportunity to shape the agenda beyond the boardroom by working with academia and government on how to
In a volatile and continually evolving operating environment, CEOs need to understand the current skills within their organisation, determine the requisite future workforce capabilities, and then work out the best way to fill these gaps.
Capturing and analysing workforce data is critical, yet many organisations are unsure of what data they hold, or how to analyse this data to gain useable insights and drive strategic decision-making.
This is surprising because the vast majority of Australian CEOs (92%) know that success and durability of business depend on data about their employees' views. Yet only one in three believes the information they are getting in this area is comprehensive.
Despite the amount of data organisations hold and the growing sophistication of the tools available, many organisations are falling short. Fifty-two percent of Australian CEOs say that their employees do not have the analytical skills required to make meaning out of the data available to them.
Companies are struggling to use data and advanced analytics to make better decisions about the workforce. In PwC’s ‘Preparing for Tomorrow’s Workforce, Today’ survey the top three ‘at risk’ capabilities are: using analytics in workforce decision making, predicting and monitoring skills gaps and eliminating potential biases in candidate selection, and assignment and appraisal. All relate to workforce analytics and their use in improving the working environment and people’s behaviour. Companies can create a competitive edge by building analytical rigour in these three ‘at risk’ areas.
Over half (52%) of Australian CEOs say it’s more difficult than ever to hire in their industry due to the lack of skilled workers. The number one reason provided is a deficit in the supply of skilled workers.
CEOs can be instrumental in repairing Australia’s skills pipeline. The nation’s education system has not evolved fast enough to adapt to the needs of the workforce. Business leaders must work alongside educators to strengthen the pipeline from the classroom to the workplace.
One in three Australian CEOs know they need to invest in significant retraining and upskilling as the most important action to close skills gaps in their organisation, but fewer understand the importance of establishing that strong pipeline direct from education (21%).
Collaboration is vital to close the gap between the current and the future-fit workforce. Businesses, schools and other training institutions need to collaborate to ensure all generations of workers are skilled for today’s digital world. Employers can become active partners with educators and CEOs can have a say in what skills are being taught to address the current shortfall.
Australia's intake of higher-level apprenticeships (work-based training at Diploma level qualification and above) will more than double next year, providing an alternative pathway to jobs that previously were only open to university graduates. The qualifications available through higher apprenticeships will extend to bachelor’s degrees by 2020, which means a university education will not be the only way to a career pathway in jobs where they are now mandatory.
Millennials are set to comprise 75% of the workforce by 2025, and they have very different attitudes towards mobility and the number of careers in their lifetime. Companies must reconsider their investment in millennials to prepare for an era where workforces can be rented, not owned.
This approach to a portfolio career, evident across generations, has seen the emergence of micro-credentials, where an employee can learn in short bursts for specific skills. Short time frames suit employers and employees throughout their different life stages where it is not easy to step out of the workforce for months at a time to learn new skills.
CEOs should also be prepared to think differently about ways to solve their skills challenges. This includes considering innovative workforce strategies such as ‘boomerang employees’ (re-attracting talent that has left and may return), horizontal career pathways (redeploying people across the organisation), and even collaborating with others for pathways to redeploy workforces between companies as skill sets are required.
Organisational flexibility becomes key, ensuring that employees are valued, their role strategically aligns to the objectives of the organisation to derive them a purpose, and that employers create an engaging work environment for a transient workforce.
The key is for business leaders to understand how their business is going to change, articulate the workforce required to deliver, and then to proactively consider how they can upskill their workforce accordingly.
Philip Le Feuvre
Director, PwC Australia
Tel: +61 2 8266 3661
Dr Ben Hamer
Director, PwC Australia
Tel: +61 437 159 517