How can businesses in technology bridge the widening capabilities gap?

Technology and telecommunications have had a better year than many sectors, enabling all of us to keep working and stay in touch with one another. Nonetheless, at Avado we knew this sector was struggling the most with the skills gap, and we were curious about how 2020 had impacted this issue. As such, we commissioned independent research, talking to executives and learning and development leaders in the industry and several other sectors. The findings were much worse than we had imagined. The skills gap across all sectors — including technology and telecommunications — is now so wide that it has become a capabilities chasm.

We define a capability as something both individuals and businesses can have. It’s a deep-rooted knowledge or an ability to do something that is not isolated and flows between different skills. What was once a lack of isolated abilities that businesses needed has now broadened into the absence of these connected capabilities. Those abilities are vital to how businesses function.

Two-thirds of respondents in technology and telecommunications felt there was a ‘vast’ capabilities gap in their organisation, whilst 64% believed this would leave them unable to deal with future challenges. Across all industries, a good learning and development strategy pre-2020 correlated strongly with growth during the pandemic: 71% of businesses that invested in people throughout 2019 continued to see growth in 2020, whilst 61% of those who admitted they had had no strategy, or a strategy that was unfit for purpose, saw a decline. These figures demonstrate how capabilities can insulate businesses against crises by providing a truly agile workforce that’s able to respond quickly to changes at all levels. These skills are invaluable to businesses even in good times, and can make the difference for survival long-term.

The suddenness of the events in 2020 clearly left many businesses floundering without capabilities they thought they could get by without. Almost half of respondents in technology and telecommunications admitted they had resorted to recruitment to try and fill the gap. This is not only time consuming and costly, but ultimately is only a ‘sticking plaster’ that fails to address the issue of business-wide capabilities. It’s not good enough to have these capabilities only in one person or department. That still leaves organisations vulnerable to sudden changes and unable to behave in data-driven or agile ways across all areas.

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Our research also made it clear that the lack of investment in capabilities is having a negative impact on employees. In the technology and telecommunications sector, 66% of respondents were worried about the impact of the capability chasm on long term productivity, whilst 60% feared it would lead to future redundancies. It’s perhaps unsurprising, then, that 63% believed the gap currently affects their employees’ mental health.

There were some positive signs for this sector compared to others surveyed: respondents in technology were least likely to struggle to get people to attend training. Though 54% is still too high, it compares favourably to sectors like finance, where 82% of respondents had issues with people not attending training activities. Respondents were, however, among the most likely to feel that learning and development is not taken seriously in the boardroom. The fact that learning and development and growth correlate so strongly, indicates why this lack of investment makes poor business sense. If talented people feel frustrated and insecure in their roles, aware that better learning and development would be available elsewhere, they are more likely to leave. We saw this in our research: 59% of respondents in the sector had looked at training outside their current industry and role.

All this makes clear that technology leaders need to improve their learning and development strategies, and quickly. Both internal and external training can be effective, and it is somewhat in the hands of learning and development leaders to know their people and what will work for them. However, the investment of time, effort and money certainly repays itself through business growth, but also through improved staff retention and mental health. Furthermore, it protects businesses against unknown future situations and crises, making sure all employees can respond proactively to new situations. A business can’t be agile without agile people. We need to move beyond a narrow focus on particular skills to ensure our people and economy continues to benefit from a strong technology and telecommunications sector.

Written by Mark Creighton, CEO of Avado

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