Once upon a time, finance professionals finished their education with most of the skills to serve them for a lifelong career. Those times are long gone. Today, the time we spend in a particular job or even in a particular career is constantly shrinking. What's more, the half-life of the skills we have learned has shrunk to less than five years, and this skill erosion is accelerating. That means, after five years, half the skills you learned have become irrelevant, and most of the skills you learned ten years ago are now obsolete.
The increasing digitisation and the fast pace of technological innovation mean that organisations must ensure their people have the relevant skills and are keeping up with constant learning and relearning requirements. In this fast-moving world, it also means that it is normal for companies to have skills gaps.
What is a skills gap?
Skills gaps can be assessed on a corporate or individual basis. A corporate skills gap refers to the difference between the skills required in the business and those skills the individuals in the organisation actually possess. An individual's skills gap is the difference between the skills that an individual needs today and in the future and the skills he or she already has. If there are important skills gaps in the organisation, it means the business isn't capable of operating as effectively and efficiently as it could. Once you know the key skills gaps in your business, you can help refine training and development initiatives to address what's missing.
How do you identify what skills you need to fill?
To measure the gap between the skills you already have and what skills are required today and in the future, you do a skills gap analysis. Here are the key steps:
Consider the strategic direction of the business.
First, it's important to be clear about the strategic direction of the business. Map out the strategic goals and challenges the organisation will have to address over the next 18 months or so and then think about the skills you really require in the organisation to achieve them. You can then do the same with individuals, but always starting with the business goals they are contributing to, so that you are identifying the gaps that really matter.
Identify what skills are required to deliver on the business strategic goals.
When you consider the business objectives first, you can then determine the skills and the level of proficiency that are required to help meet them. For example, if a primary objective of the business or finance department is digital transformation and better use of data, then data literacy and analytics skills would be a priority. If one of the objectives is to develop a new product, then you will need product development and innovation skills. Determine key skills (technical and soft skills) on a company-wide, departmental, and individual basis. Keep in mind that you want to set your business up for the future, and be sure to consider the skills employees will need in the future to succeed.
Assess current levels of skills in the organisation.
In some cases, there might be employees who already have the key skills needed to achieve the strategic business goals. Until an assessment is done on the current proficiency of the staff on the key skills needed to achieve organisational objectives, it will be a challenge to measure the skills gap that needs to be filled. There are many ways to uncover this information through training needs analysis that includes employee surveys, interviews, and group discussions that document training, certifications, and credentials they have; performance review feedback; customer surveys; assessment software; and more. It can also be beneficial to hire an outside consultant to complete this work to make the process more objective and to help the organisation's talent to stay focused on their key result areas.
Identify the gap.
Once the organisation identifies what skills are required to hit its strategic goals and what skills the people in the department or business already have, compare the two to determine the skills necessary to close the gap.
Start closing the gap.
The action plan to close the skills gap at the organisation can include both additional training and hiring new staff. First, finance leaders can help identify employees on staff who might be poised for a promotion to help fill gaps. Also, consider internal mentorship initiatives where experienced staff with the needed skills can help others gain the skills necessary to fill the gap.
Another way to close the skills gap is for the organisation to invest in training. There are often free online courses as well as paid subscriptions, certification programmes, and educational materials that are available for employees to learn and enhance their skills. That also includes considering events and conferences for employees to attend. Consultants are also available to create customised training programmes to specifically target the skills shortfalls.
If closing the skills gap can't be achieved through training initiatives, it's time to consider hiring new talent to bring the necessary skills. Whether the organisation chooses to hire full-time talent or outsource to contractors or consultants, sometimes getting the necessary skills from outside the organisation is the best way to go.
No matter if one of the skills gaps is around digital and data literacy, as it is for many companies today, or other skills, the key is to create a culture of continuous learning and development at the organisation. It's important for individuals to take responsibility for their own professional development and for organisations to emphasise this as a priority and expectation.
As a finance leader, you can help identify the key goals, monitor skills, and then track the ROI on training and closing the skills gaps at the organisation.
Bernard Marr is a thought leader, speaker, author, and business, tech, and data adviser. The second edition of his book Data Strategy: How to Profit From a World of Big Data, Analytics and Artificial Intelligence will be released later this year. To comment on this article or to suggest an idea for another article, contact Chris Baysden, an FM magazine associate director, at Chris.Baysden@aicpa-cima.com.
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