Between the time we conducted our 23rd Annual Global CEO Survey in October 2019 and today, it’s not an exaggeration to say that the world changed. Yet the questions we asked CEOs then around how they were preparing their workforce for the digital future and attracting and retaining talent still bear weight. Even as businesses adapt to COVID-19, the keys to unlocking organisational value still lie in culture, trust and harnessing the right skills.
PwC’s Talent Trends report, Upskilling: Building confidence in an uncertain world, examines the issues CEOs identified as being front of mind and the key challenges that are holding them back.
Of the more than 3,000 CEOs who took part in last year’s survey, 74 percent said that a lack of availability of the right skills was a concern, and one that would constrain growth. Today, that same lack of people skills and adaptability could hamper companies’ abilities to tackle the impacts of the COVID-19 pandemic.
But while almost half of CEOs a year ago said that retraining and upskilling would be the best approach to closing the skills gap, only 18 percent this year said they’d made significant progress in establishing upskilling programs to develop a mix of soft, technical and digital skills. One in ten of the largest companies surveyed said they had made no progress at all. This is despite 77 percent of employees being willing to upskill.
Confidence in CEOs correlated with their progress on upskilling staff. Those with more advanced upskilling were over two times more optimistic about global economic growth (albeit, prior to COVID-19). This also extended to their own revenue growth, with 38 percent being very confident in growth versus 20 percent of those starting out on their upskilling journeys. This may suggest that taking steps to upskill helps organisations build confidence as it shows a clear, practical course of action forward in an increasingly uncertain world.
The really good news is that CEOs believe upskilling delivers more than just skills, and the more advanced in the process, the greater the benefits. While the full benefits take time to emerge, mature upskilling programs lead to CEOs reporting stronger returns across the board, improving productivity (30 percent), accelerating digital transformation (30 percent) and improving talent acquisition and retention (28 percent). Even early in the process, 41 percent said that their upskilling program was very effective in creating a stronger company culture and improving employee engagement. The more advanced the program becomes the higher the number of CEOs saying that it was very effective in addressing their skills gap.
As mentioned above, only 18 percent of CEOs made significant progress in upskilling over the last year, but why? When asked what their most pressing challenges were, four themes emerged.
Keeping hold of upskilled talent was a very real concern to this year’s CEOs. Fourteen percent said it was their biggest challenge, but that rose to 19 percent for industrial manufacturing, automotive, and tech, media and telecoms. While the truth is that worrying about employees leaving for the competition is an indication that your upskilling is working, businesses should also put in plans to use upskilled employees so that they see the value of their new learning and are incentivised to put it to use for their own organisation.
A second issue holding companies back was defining the skills they needed for the future. The financial services and healthcare sectors — both predicted to be disrupted by digital technology — named uncertainty over which skills to focus on as their biggest challenge. Needed skills are a moving target, and the current climate makes predicting changes precarious. To address this, businesses need to create a culture of adaptability, investing in transferable ‘no regret’ skills that will help employees no matter the twists and turns. In the wake of COVID-19, some organisations will need to redeploy workers to different roles, and the ability to do this rapidly will be the difference between success and failure.
Uncertainty around the future can create fear and cause a major drain on productivity and engagement. Clear narratives from the top on a company’s plans for the future will help. While people are ready and willing to learn new skills, or entirely retrain to improve their future employability, only one in three feel they have the opportunity to do so.
Finally, paying for upskilling programs remains an issue, not least at a time of economic crisis. Even before COVID-19, government and public services CEOs in particular said this was their greatest challenge. Industrial manufacturing leaders also cited financial resources as a concern. While there’s no simple calculation to estimate how much upskilling will cost an individual business, it’s important that it is seen as a strategic priority in the same way that technology investments are. The two go hand in hand.
Here are our top six recommendations for successfully upskilling to help organisations overcome the challenges they face:
Gaining and retaining talent is always a concern for CEOs. Before COVID-19, three-quarters of the CEOs surveyed said that they were concerned about having the talent that they needed. During and post-pandemic, competition for talent is unlikely to lessen. While leadership has immediate issues to address first (especially when it comes to workforce safety and wellbeing), pressing needs from the crisis and its economic impacts mean that there will be many people who need to be reskilled and redeployed, and many who are worried about being made redundant.
Companies that already have well-constructed and well-implemented upskilling programs in place for their employees will find themselves in a better position to benefit from growth when the economic climate improves: their workforce will be ready. In an uncertain landscape, any advantage will be a big one, and those still wondering about the benefits of upskilling should take note.
Download PwC’s Talent Trends report, Upskilling: Building confidence in an uncertain world, for further insights on upskilling.
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