In today’s environment, business leaders are facing numerous disruptions, including inflation, a post-pandemic environment, and a number of fast-moving geopolitical and social crises. Organisations, irrespective of the sector they operate in, need their people to have the right skills to be able to recover from the aftermath of the pandemic and remain resilient in the face of changes to the world of work or the economic environment. Therefore in order to succeed in this environment, organisations must do their utmost to have a workforce that is equipped to meet these challenges.
The topic of having the right talent onboard is a major concern among local business leaders as it impacts their potential for growth or in the worst case their operational sustainability, their customer outcomes and productivity, amongst other factors. Several studies cite a local skill mismatch, both on a vertical level, whereby employees are over or under qualified for the job or on a horizontal level, which describes a situation where the level or type of skills available does not meet the employment market needs.
Claudine AttardThe local context: Organisations need the right skills to drive growth
This year’s HR Pulse Survey, which is a joint annual exercise carried out by PwC Malta and the Foundation for Human Resources Development (FHRD), confirms the struggles local employers are facing with regards to finding and retaining the right talent.
When asked about their top five people-related concerns at the moment, the majority of employers (75 per cent, overall) recognised that ‘attracting the right talent’ is one of their top people-related concerns. Moreover, respondents believe the availability of skills is, or can, impede the growth of their organisation. Employers from various industries cited the availability of skills to drive growth amongst their top concerns. This concern was highest amongst respondents in wholesale and retail (75 per cent), iGaming (65 per cent), insurance (63 per cent), accommodation and food services activities (50 per cent), and financial services (50 per cent) sectors. The full report will be published at the FHRD conference on October 21.
The vertical skills mismatch in Malta was recently studied in further detail by the National Statistics Office in the Labour Force Survey. A vertical skills mismatch was experienced by 54.3 per cent of the employed population in Malta. More than one third (35.1 per cent) of these employees were overqualified while 19.3 per cent were under-qualified for their role. This shows the skills mismatch between what employers need, and what skills are available on the market. The study found that the mismatch is higher in certain industries such as in the wholesale and retail trade, transportation and storage; accommodation and food services activities; and information and communication.
Interestingly, some of these industries were also the ones which cited the availability of skills to drive growth as one of their major people-related concerns in the HR Pulse Survey, 2022.
Skills gaps and skills mismatches may be overcome through recruitment and selection efforts
On the other hand, the local horizontal mismatch was also identified by the National Statistics Office in the 2021 Labour Force Survey. This is the case within certain sectors, more than others, such as the food service activities, wholesale and retail trade, transportation and storage, and accommodation sectors (51.2 per cent), information and communication (50.5 per cent) and the other services sector (63.5 per cent). This denotes a situation where the large proportion of the workforce in these sectors are not working in the field of their studies. Inversely, employees within the construction (66.9 per cent) and financial and insurance activities (61.7 per cent) were found to be working in the same area of their study.
Case for upskilling
Skills gaps and skills mismatches may be overcome through recruitment and selection efforts, however noting the difficulties encountered in the current labour market, upskilling may be a more effective way to fulfil the skills required by the organisation. Considering these realities within the labour market in Malta, these mismatches may be something that we need to adapt to, at least in the short term, and find solutions for. We are in fact already seeing a shift in hiring based on skills rather than educational qualifications alone, including not only the skills candidates have but also their learning mindset and future potential. This way forward, is however requiring businesses to have programmes to develop these people so they can perform and grow.
Short-term upskilling is needed to meet the current business needs however long-term, proactive, upskilling can increase businesses’ resilience. Therefore, in addition to upskilling in technical skills required for the job, there are key transversal skills which have become essential to enable employees to be more adaptable in an increasingly dynamic and digitalised world, including: self-learning capacities (ongoing education, adaptability, agility, and flexibility) will be necessary to cope with disruptive business models and digital innovations; digital fluency; cognitive skills (such as problem-solving, creativity, analytical thinking and creativity); and socio-emotional skills (such as communication and collaboration).
In fact, the need for upskilling is underscored by the World Economic Forum’s (WEF) Future of Jobs Report 2020, which identified that half of all employees around the world will need reskilling by 2025. The WEF’s report identifies the following top five skills for 2025: Analytical thinking and innovation; active learning and learning strategies; complex problem solving; critical thinking and analysis; and creative, originality and initiative.
Developing the required pool with the skills needed – with the ability to adapt quickly in a world of constant change – does not happen organically or by accident. Significant investment is required for upskilling, in any given sector, however it outweighs the costs of not upskilling. On a national scale, such ramifications may include decreased competitiveness, limitations to growth, and decreased investment interest in the local economy. Eventually it can also lead to an increase in unemployment rate, which will lead to a negative impact on consumer spending, GDP and economic growth.
However upskilling should not solely be the priority on a national or business level, PwC’s study into the Hopes and Fears of today’s workforce (Global Workforce Hopes and Fears Report, 2022) found that workers in possession of specialised skills (upskilled employees) are more empowered thus making the case for individuals to lead their own upskilling journey. Employees with specialised skill sets were more likely, than their counterparts whose job does not require specialised training, to feel listened to by their managers (31 per cent more), feel satisfied with their job (24 per cent more) and have money left over after they pay their bills (16 per cent more).
Finding great people to join your team is a constant challenge. And it’s not getting easier any time soon, given the tight labour market, shifting employee expectations and a shortage of people with in-demand skills. You’ll win top talent by competing on more than salary. Your corporate culture and the experience you provide people, even during recruitment, is your differentiated asset. Keeping hold of workers with key skills and helping them build, apply and leverage those skills will be key – but it is only one element of the employee experience. What may be missing is a plan to make the best use of employees who have been upskilled so they can see the value of their new learning and are incentivised to put it to good use to support your organisation deliver its strategy.
These are business issues that demand vision and leadership from the top. HR has a critical role to play here and therefore one needs to ensure it has the resources, capabilities, and support required to address these challenges.