How to Close the Digital Skills Gap
Three ways to gain the tech skills your business needs to complete projects and stop falling behind.
You can’t miss the persistent headlines and LinkedIn posts about it. Almost 60% of employers say not having the right-skilled digital talent has a significant impact on their business. (It’s 73% in financial services!)
And of those employers: only 15% have been able to successfully complete critical, data-intensive projects since 2020.
It’s a digitally-driven, innovation-essential economy. This pace? It isn’t going to slow down. To stay in business, organizations need a workforce skilled and experienced in the latest platforms and technologies. The challenge: digital skills gap.
What is the digital skills gap?
It’s the difference between the workforce you have and the tech skills and experience you need. More formally: the digital skills gap is the space between the demand for digital capabilities and the available talent pool (including your existing team).
The digital skills gap makes it hard for businesses to keep up with the pace of innovation and simply get necessary work done.
In an age where data analysis, cybersecurity and AI drive smarter, faster, bolder business moves, not having the right skills on your team is a serious threat to your organization.
And there’s proof this problem is only getting worse.
85%
of organizations can’t complete critical, data-intensive projects.
In 2023, Gartner’s emerging tech survey found 64% of employers feel talent availability is the largest challenge to emerging technology adoption — compared with 4% in 2020 and 14% in 2019.
Upside: there are several approaches your business can take to address and close your digital skills gap.
Examples of digital skills gap
What does a digital or tech skills gap look like? Here are a few examples:
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- Data modernization: Your company starts using the Databricks platform, but lacks data skills to craft governance and analytics strategies to meet next-gen use cases.
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- Cloud infrastructure: You’d like to run your applications on Oracle Cloud Infrastructure, but your team doesn’t have cloud skills or certifications to migrate or maintain your data.
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- Digital transformation: It’s a continuous journey and digital skills are essential for the evolving nature of transformation. If your team lacks skills and experience with tech integration, IT architecture and security, your company’s transformation journey may end too soon.
When key projects fall into these skill gaps, the outcomes can be serious: Implementations may fail. Platforms go underutilized. Your data-driven momentum is lost. Your business loses market share.
Why hiring full-time employees doesn’t always fill the skills gap
Hiring full-time tech talent or using a IT staffing services is naturally the most common approach for meeting a company’s demand for tech skills. But there are also common pitfalls here.
As we just saw, most employers are already struggling to find tech talent for their organizations. Add to that complication: companies often need specialized skills, like Databricks, full-stack Java, Pega or DevSecOps.
Then there’s fit for your team. Finding top performers with specialized tech skills and strong soft skills can feel like an impossible dream. And when companies overlook any of these components (and the candidate doesn’t work out or can’t perform) they’re back to the nightmare of square one.
Trouble with supplementing your skills sets with tech contractors
No doubt that leaning into contingent workers, freelancers, independent contractors and top it staff augmentation companies gives your company the flexibility to respond to changing business needs. Hiring IT consulting and staffing services or contractors can give your company access to more diverse skills sets and flexibility in your costs during uncertain times.
But for the same reasons as FTE, great contractors are hard to find. Almost everyone right now is looking for great tech talent. And we’re all pulling from the same pool of 5.2 million tech workers.
So, the solution seems pretty clear: develop more tech talent.
Three ways to develop tech talent and close your digital skills gap
1. Reskill-and-redeploy employees for digital skills
Reskilling starts by looking at what skills your employees already have and what skills they’ll need to be successful in your evolving business operations. (EX: Taking manual assembly line workers and training them to use machines.)
You’ll develop a program for reskilling your employees to have and use those skills on real projects. Then you’ll redeploy them into evolved roles that support your updated business operations.
Sometimes reskill-and-redeploy programs are a big lift. It not only requires an investment in training, but may also require pulling current employees off existing workloads and backfilling for them too. According to a McKinsey survey, 53% of employers say the most significant challenge is how to balance their programs’ needs with those of current business operations.
Many organizations with current or planned reskilling programs are confident in their abilities to train and reskill employees. But many say their organizations lack the capabilities to design other aspects of the programs, like curriculum, assessments and implementation.
Despite the challenges, 46% of surveyed organizations will reskill more than one-fifth of their workforce in the years ahead.
2. Upskilling employees with digital skills
Similar to the process of reskilling employees, upskilling refers to the process of improving an individual’s or a team’s ability to perform their roles, keep up with changes in their industry, or prepare for new opportunities or challenges in the modern workplace.
Upskilling is exceptionally valuable in the wake of the global pandemic, which accelerated the shift towards remote work and digitally enabled services. While individual effort plays a significant role in the upskilling process, organizations are increasingly recognizing the importance of investing in their workforce’s continual learning.
In fact, according to the 2022 PwC Global CEO Survey, 77% of CEOs are concerned about the availability of key skills among their workforce. Fortunately, companies that support upskilling tend to have higher employee engagement and retention rates, as employees feel valued and are more likely to stay.
3. Develop “net new” tech talent with customized skills training
As we mentioned above, one of the biggest challenges of the digital skills gap: we’re pulling from the same, finite number of people for a seemingly infinite demand for innovation.
Each of these three approaches works toward the only sustainable solution — develop new tech talent.
But with customized digital skills training — or Hire-Train-Deploy (HTD) — employers work with a training partner and top tech staffing agency to recruit strong candidates for tech roles, train them in very specific tech skills and platforms, and deploy them onto the employers team, ready and experienced in the work they need to do.
We call this “net new” tech talent.
You’re not fighting for a slice of that 5.2 million workers. You’re finding people with the right aptitude for tech projects and your partner custom-trains the candidate to be really great at working on projects for your tech stack.
How is Hire-Train-Deploy different than reskilling / upskilling?
It’s similar to reskilling and upskilling. But the HTD company (or RTD company) model is offered by providers who specialize in training tech talent in emerging and/or in-demand technologies — and giving them the experience to be day-one ready to deliver.
Often supplementing a company’s existing recruitment efforts, an HTD partnership provides companies with access to teams of highly specialized tech talent.
The HTD option also mitigates many of the risks commonly found with traditional hiring or outsourcing methods. For example, HTD providers take on all of the costs related to recruiting, hiring and training plus they guarantee the teams deployed to the client organization will be the right fit for both technical and soft skills.
This approach decreases some of the burden on an organization’s talent acquisition team, and it enables the hiring manager to focus on their core business activities vs interviewing dozens of candidates then spending valuable time familiarizing newly-hired employees with the company’s tech stack.
Determining the Best Option for Closing Your Skills Gap
The best time to address your digital skills gap? Early and often. Emerging tech platforms of today will be the standards of tomorrow (and then you’ll have to catch up with what’s emerging after that). It can feel overwhelming. But there are partners to help you navigate this way of building your capabilities.
Each of the above options — hiring, reskill-and-deploy, upskilling and customized skills training (HTD) — can help your business find the right tech talent to meet your digital skills needs today and into the future. For many organizations, a combination of approaches that align with your tech talent strategy may be right for you.
Want to know which approach or combination is right for you? Contact Smoothstack to learn more and talk about it.
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