How a lack of employee skills jeopardize the company’s success

It sounds like a truism that a lack of employee skills jeopardizes the company’s success. However, a current study by the learning portal Degreed shows that millions of employees worldwide do not actually have the necessary skills (abilities and competencies) that they need for their work. In this article, I will show the results obtained in Germany, one of the main European powers.

"The State of Skills 2021"

The report of the learning portal Degreed “The State of Skills 2021” examined the global effects of the corona pandemic on the skills of employees. As part of a large-scale study, over 5,000 employees in eight countries were asked about their current professional situation.

The results show the countries, industries and positions that are most affected by the change. And make the massive need for action and optimization of employees and companies equally clear.

Employees believe that skills quickly become obsolete

More than a third of respondents worldwide (38%) feel less confident that they have the skills they need for their work compared to the time before Corona. Almost half (46%) even assume that their current knowledge will be out of date within five years at the latest. In Germany, even 56% believe this.

This is the result of two factors:

  1. Almost two-thirds (60%) of the workforce believe the pandemic has made it necessary to acquire new skills.
  2. In addition, 46% said that their company had reduced investments in Learning & Development in the last six months. In Germany, 41% hold this view.

There is a high willingness to continue training in Germany

In Germany, 68% of employees want further training in order to advance their professional careers. The respondents see a need above all in the areas of leadership skills, advanced communication and negotiation skills as well as advanced computer and programming skills.

Country comparison on the need for skill optimization

A comparison shows in which countries, sectors and occupational positions the qualifications need to be developed the most:

  • Globally, workers from India, France and Brazil report the most frequently about the desire for professional development.
  • In terms of industries, IT, finance and engineering are the areas that are most vulnerable to their current capabilities.
  • In the case of professional positions, IT, HR and marketing workers in particular indicate a need for further qualification.

A lack of investment in learning & development means risks for employees and companies

This development is having a significant impact on the workforce and businesses trying to cope with the current crisis. When there is little confidence in one’s own abilities, more than half of the world’s employees (55%) find their work more stressful. The rate in Germany is 50%. In addition, 41% state that tasks take longer to complete (Germany 40%) and that the quality of the work is lower (22%).

Employees want to receive further training or quit

This scenario also has an impact on employee retention. Almost half of the respondents (46%) state that they will likely leave their employer if the employer does not invest in the skills development of its employees.

In Germany, a third of respondents believe that their employers are more inclined to lay off employees than to retrain them or transfer them to other departments.

Companies with a focus on classroom training suffer

The past few months have been particularly difficult for German companies that rely primarily on face-to-face offers in the area of ​​employee training and personnel development. The corona pandemic not only confronted many companies on a massive scale with the issue of home office, but also with the question of how employees can be qualified and trained when they are not on site at the company.

It quickly became clear that a simple video conference is often not enough. Therefore, there is currently an enormous surge in interest in digital learning – and that in companies of almost all sizes and from a wide variety of industries.

The corona pandemic will also change learning

Companies that survive the pandemic and later develop successfully will be different than before. Because in order to meet the changing requirements of digitization, employees now have to optimize their skills or learn new ones.

And although new skills are needed, many companies are scaling back their investments in upgrading their workforce. The provider Degreed already sees that the global skill deficit will reduce gross domestic products by billions of dollars. Not to mention the impact on employee wellbeing, sales and productivity.

Which skills will be needed more in the future

Most predictions are that technology and programming, and basic digital skills, demand will grow rapidly over the next decade. However, in many professional positions, such as sales, these skills are only required on a smaller scale or at a basic level.

In absolute terms, i.e. the total number of hours in which certain skills are required per year, the same forecasts predict the greatest growth in other disciplines. This applies to the demand for cognitive skills such as creativity or problem solving and social skills such as communication, entrepreneurship or leadership skills.

Worldwide top 10 skills

The Degreed study “The State of Skills 2021” shows the following ten skills as the top needs worldwide

  1. Advanced IT and programming skills
  2. Leadership skills and management experience
  3. Communication and negotiation skills
  4. Entrepreneurship and initiative
  5. Project management experience
  6. creativity
  7. Advanced knowledge of data analysis and mathematics
  8. Critical thinking and decision making
  9. Adaptability and continuous learning
  10. Skills in technology design and engineering

Top 10 skills in Germany

Broken down by country, the study by Degreed shows that companies in Germany primarily prioritize social skills. IT and programming skills come third, followed by various cognitive skills fourth to sixth. The ranking is as follows:

  1. Leadership skills and management experience
  2. Communication and negotiation skills
  3. Advanced IT and programming skills
  4. creativity
  5. Project management experience
  6. Critical thinking and decision making
  7. Complex information processing and analysis skills
  8. Advanced knowledge of data analysis and mathematics
  9. Interpersonal skills and empathy
  10. Adaptability and continuous learning

Valuable insights for the training strategy

For executives, these insights are invaluable as they show what the training strategy should focus on. Namely, on precisely those skills that are inadequately represented in their workforces. In this way, managers can use HR programs in a targeted manner in order to achieve the greatest possible benefit for employees and their employers. This type of data is already available to many managers – in the form of competence data in learning platforms, HR systems, recruitment systems and more.

The “The State of Skills 2021” report provides detailed information on the impact of recent global events on the qualifications of workers and their willingness to adapt to new challenges. Degreed aims to help employees and managers focus their limited energies and investments on developing the skills they need most. Because those who act quickly have the chance to be one step ahead of the competition.

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