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The enterprise guide to closing the skills gap

Three strategies can help organizations tackle one of their greatest challenges: building and maintaining a skilled workforce.

Arguably, one of the greatest threats facing organizations today is the talent shortage. Executives recognize the skills gap. They know it’s both real and problematic. But most of their organizations don’t appear to be actively or effectively tackling the issue.

We’ve conducted significant research on the topic for years now – and we’ve found many organizations are merely running in place. Ironically, although executives recognize the significant threat the talent shortage poses, most organizations have not proactively attacked the problem. In fact, our research reveals that the vast majority have not moved beyond traditional hiring and training strategies.

Skilled humans fuel the global economy

Throughout economic history, talented humans have been a source of innovation and advancement – their skills the impetus for economic growth. Today, however, multiple factors, including continued – and rapid – technological developments and business and operating model innovation, have contributed to market shifts that are redefining industries.

Combined with various economic and market disruptions, as well as significant demographic shifts in many countries, these factors have created a perfect storm that is affecting the value of, need for, and availability of workforce skills. The result is a looming global talent shortage with the power to severely impact individuals and economies worldwide.

Skills availability and quality are in jeopardy

The skills challenge will not dissipate; in fact, it’s increasing in severity. Global labor markets are only tightening, as unemployment rates continue to decline. Compounding the issue, new skills requirements continue to emerge, while other skills are becoming obsolete. And while digital skills remain vital, executives tell us soft skills have surpassed them in importance.

Amid all this, the half-life of skills continues to shrink, while the time it takes to close a skills gap has ballooned. As organizations scramble to meet their talent needs, many are making adjustments to their education and experience requirements just to fill roles. Organizations must find ways to stay ahead of skills relevancy.

Intelligent automation is an economic game changer

As business platforms mature and companies continue to introduce new intelligent workflows to succeed on those platforms, the need for continuous reskilling in the workforce will be paramount to remain competitive. Executives recognize that advances in intelligent automation will bring multiple benefits. At the same time, they also realize millions of workers may require retraining/reskilling.

Hiring alone is not a sustainable solution to the talent crisis. Successfully navigating this new environment requires fundamentally reshaping how organizations manage skills, talent, and culture.

How can organizations help close the gap?

In this report, we offer a roadmap to guide executives toward action to address this critical issue. Our recommendations are based on insights from multiple IBM Institute for Business Value research initiatives, including surveys of thousands of global executives representing multiple industries in dozens of countries, as well as performance benchmarking data from hundreds of organizations globally.

Through research and analysis, we discovered certain skills development tactics that have a strong impact on closing skills gaps. We have crafted a set of key recommendations that leverage the common principles of these tactics as a foundation: personalization at scale, increased transparency, and leveraging the ecosystem. These recommendations leverage artificial intelligence (AI) to assist organizations in closing skills-related gaps.


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Meet the authors

Annette LaPrade

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, CFO Lead for the IBM Institute for Business Value Performance Data and Benchmarking program


Janet Mertens

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, Global HR Research Leader, IBM Institute for Business Value


Tanya Moore

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, Partner, Talent and Transformation, IBM Consulting


Amy Wright

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, Managing Partner, Talent and Transformation, IBM Consulting

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    Originally published 11 September 2019