Seizing the opportunity to close the skills gapThere is a widening gap between the skills employers need and those workers have, recent AICPA & CIMA research found.
I'm a great believer that every challenge is really an opportunity. It is no secret that employers are struggling to recruit staff with the right skills for their organisations. If we could find a way of resolving that shortage, companies would be able to grow more easily, and their employees would have more opportunities for professional advancement.
AICPA & CIMA's research into the future direction of the accounting and finance profession has highlighted the importance of continually learning, unlearning, and relearning skills. This is because the modern workplace is evolving rapidly as a result of digitisation and changes to working practices that developed during the pandemic, such as remote working. The productivity gains that could result from exploiting the opportunities of the new business environment make the process of continued upskilling worthwhile for both workers and their employers.
Unfortunately, the skills gap — the disparity between the skills the workforce has and the skills employers need — is currently widening, according to AICPA & CIMA research released in February.
In the UK, one of the markets I lead for AICPA & CIMA, we commissioned polling which found that 82% of SME employers identified skills gaps within their organisation in the past 12 months. When this question was last asked in 2020 the figure was 65%. This is a global problem. McKinsey & Co. research from 2021 showed that 87% of companies were experiencing skills gaps or expected to within a few years.
I want to stress that it would be utterly wrong to solely blame employers for this. On the contrary, the employers we polled showed a real desire to upskill their workforce themselves. A total of 54% of employers favoured developing employees in-house, either by recruiting individuals with the right personal qualities and attitude and upskilling them internally (30%) or developing their own employees rather than recruiting from outside (24%). Only a fifth (21%) preferred to recruit high performers with experience from other organisations.
Employers don't just say they want to upskill their employees, a great many of them are doing it. We should celebrate how hard they are working to do this. Nearly four-fifths (78%) of the SME employers we polled invested in training and professional development for their employees in 2022 beyond what was mandatory. That is a thirteen-percentage-point increase since 2020, a period which covers the economic disruption caused by the pandemic. That shows genuine commitment to addressing the problem. However, despite their best efforts, they have been unable to plug the skills gaps in their organisations.
Barriers to training
The sad fact is that 90% of the SME employers we recently polled told us that there are barriers preventing them from offering more training, including a lack of time and expertise. However, the biggest barrier — cited by 30% of employers — is a lack of financial resources as a reason they could not train staff further. This is a legitimate point. SMEs do not have the training budgets available to large corporations and will have many competing demands on tight resources. This is especially true in today's tough economic circumstances.
From a macroeconomic perspective, it is highly undesirable for SME workers to miss out on upskilling due to barriers preventing their employers from offering it. According to the World Bank, SMEs account for around 90% of businesses and more than 50% of employment worldwide. If we want to bridge the global skills gap, it would be self-defeating to ignore half of the global workforce.
In the UK market, AICPA & CIMA are delighted that the UK government is looking at reforms to boost skills, and we are very much looking forward to hearing more policy details, particularly with regards to reforming the Apprenticeship Levy.
If the right policies are put in place, and access to upskilling is made as wide as possible to address the global skills gap, great economic opportunities and other benefits await.
The modern workplace is rapidly evolving — digitisation and changes to working practices brought about by COVID-19 mean that all of us need to develop our skills. The potential economic boost that would come from a workforce equipped to take advantage of the changing workplace would be enormous. The time to tackle the skills gap is right now.
Read AICPA & CIMA's Mind the Skills Gap 2023 research.
— Paul Turner is vice-president–UK and Ireland at AICPA & CIMA, together as the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.