3 strategies to deal with the global skills gap
Demand for higher-skilled workers is projected to increase worldwide in coming years, which will challenge some economies more than others, research by global recruitment firm Hays and Oxford Economics suggests.
More people live outside their home countries than ever before, and most of the migrants with university degrees go to the US, UK, Canada, and Australia. This steady flow of high-skilled migrants, technological innovation, and an increase in flexible working patterns have slightly eased global labour market pressures for the first time in five years, according to the 2017 Hays Global Skills Index.
However, it remains challenging for businesses to attract and retain talent, particularly in Europe, given aging populations, rapidly evolving skillsets, and an increasing mismatch of talents and job demands, the study suggests.
“There’s a disconnect where education isn’t necessarily teaching flexibility and critical thinking. They’re teaching specific sets of skills, and then the employer gets them and now they have to craft onto them a whole other layer,” said Karl Ahlrichs, a senior human resource consultant.
In manufacturing, being able to set up and run production lines, and having electrical, hydraulic, metal bending, and tool-making skills is no longer enough, Ahlrichs said. Nowadays there’s also an overlay of information technology in using computers and being able to program letter logic to run the machines.
In finance and accounting, running an Excel spreadsheet is a skill, but learning to work an Excel spreadsheet is an ability, he added. “We’ve moved from the world where we need a particular set of skills to where we need the people coming out of a training session,” he said. “The shelf life of their skillset might be six months, but it’s their ability to learn the next layer of skills that’s crucial.”
In the US, the number of freelance, contract, temporary, or on-call jobs rose to 15%, from 10%, in the past decade. US employers are still able to find available workers, but retiring Baby Boomers are about to create structural challenges in the labour market.
In large US population centres, employers already have a tough time finding finance and accounting professionals, especially specialist accountants with industry-specific experience, who are in great demand.
“Making a good impression is key in a competitive market,” said Davinder Masaon, managing director for accounting and finance recruitment at Hays in New York.
Accounting and finance candidates’ top complaint is that they feel they’re wasting their time when job interviews are conducted by people who are unable to properly understand their abilities or communicate job details, Masaon said. Hiring managers and accounting personnel should assist human relations in conducting interviews with accomplished accounting and finance candidates.
He also advised that finance leaders could expand their talent pool by being open to experienced professionals from sectors and industries outside their niche areas, and hiring from amongst workers with more than two decades of experience.
Europe and the Middle East
Several European countries are experiencing a decline in working-age populations, including Russia, Poland, Germany, and Italy. This along with rising talent mismatch is making it difficult for employers to find the right people to fill vacancies.
Despite the uncertainty about Britain leaving the EU, employers in the UK are having less difficulty recruiting skilled workers than in other parts of Europe. The UK’s working-age population is growing. Shortages do, however, persist in certain high-skill areas, such as civil engineering, accounting, and data analysis.
More than one-third of employers (35%) expect to encounter applicants with unrealistic salary expectations this year, said Karen Young, director of Hays accountancy and finance recruiting in the UK. And although that is lower than in the year prior (42%), less than half (46%) of employees working in accountancy and finance roles are currently satisfied with their salary. Employers have also reported that skill shortages are impacting not just productivity, but also employee morale, business development, expansion, and profit.
According to the Hays Salary & Recruiting Trends 2018 Guide, more than one-third (39%) of UK Millennials believe there is no scope for progression with their current employer, and 40% feel uncertain or negative about their career prospects. As a result, more than half (53%) of Millennials in the UK expect to quit their jobs in the next 12 months.
“With this in mind, and in such a skills-short environment, organisations need to consider how they can better attract talent in order to remain competitive,” Young said. Increased opportunity for career and personal development and improved benefits offerings are some of the ways this can be done, she said.
Increasing labour market participation and easing wage pressure is making it easier for employers to recruit workers. The Philippines, Bangladesh, India, and Pakistan are among countries with the highest earnings for freelancers.
Full-time jobs being created in Australia and New Zealand require new skills as routine tasks are increasingly automated. Finding and retaining talent for these roles is proving to be challenging, compounded by a shrinking working population, according to the Hays report.
Demand still outstrips supply of finance talent in China, according to Rana Ghaoui, senior manager, performance improvement, finance, who is also a finance talent offering leader at EY. But the level of finance talent is growing significantly across skillsets. Many young job-seekers come with excellent English language skills and degrees from top Western universities. While there is high wage growth, and multinationals are seen as employers offering top-notch pay packets and good career development, state-owned and private Chinese companies are offering increasing competition.
India’s economy is one of the fastest growing in the world, but low labour-market participation, declining ease of doing business, and fewer graduates entering the job market are challenges employers need to deal with, according to the Hays report. Automation could also lead to routine tasks being reshored, which would no longer make India a destination for outsourcing, Rana said.
3 strategies to build a finance team
A loyal, deeply skilled team is an invaluable asset for a finance leader. It has also possibly never been harder to build and nurture such a team, given the new skills required by the changing role of finance, competitive hiring scenarios, and demographic pressures.
Recruiters and finance professionals recommend these three strategies to build a finance team:
Building the employer brand: Organisations should consider investing in their employer brand, Young advised. Prospective employees should be able to get an insight into what it is truly like to work at an organisation. In particular, employers should clearly publicise any benefit their organisation can offer that candidates in a certain market may be looking for.
In the UK, for instance, 40% of accountancy and finance professionals currently rate their work/life balance as very poor to average, Hays found. An organisation that offers flexible working or work-from-home options would be viewed as one that values the needs and desires of its employees and is far more likely to attract applications.
Unconventional avenues of talent: Finance, like other business functions, is hiring temporary workers, older workers, and those who look for flexible work options. Finance leaders now also hire from nonfinance backgrounds. “Understanding the wide range of workforce solutions available should be a priority,” Young said. Employers should reconsider their approach to hiring temporary workers, she said, bringing them in to help alleviate daily work pressure rather than only for short-term needs. This would free up permanent staff to work on strategically valuable projects, focus on growing the organisation, and also help retain critical knowledge within the business.
A nuanced HR approach: “Recent EY research tells us that contingent workers will make up more than a quarter of the workforce in the decade to come,” Rana said. But how these workers, who often become important to the organisation, will impact the culture, and how the organisation should train and engage with them, is something managers need to mull over, she added.
“Organisations need to own learning and development, for employees acquire skills that they have not gained from the education system, which hasn’t yet caught up,” Rana said.
Training and growth programmes should also be calibrated to the needs of different age groups within the organisation — while older workers will benefit from a different set of inputs, such as digital skills and analytics, to prepare them for the workplace of the future, Millennials will look for exposure across functions and geographies and continuous learning.
— Shilpa Pai Mizar is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at Sabine.Vollmer@aicpa-cima.com.