Can reskilling or upskilling employees alleviate the challenges of tech talent shortage and plug the digital skills gap effectively?
The COVID-19 pandemic has changed consumer behavior, and organizations realize they had to pivot to a digital-centric business, to connect with their target audience seamlessly and grow new revenue streams.
However, to survive and thrive in the digital economy, businesses must not let the urgent – such as firefighting – drive out the important – such as retraining and upskilling – without which they will stagnate while competitors continue to reap the benefits of continuous improvement via digital transformation.
According to IDC’s 2021 Global IT Skills Survey, about 68% of Asia Pacific organizations surveyed stated that the lack IT skills has delayed their digital transformation journeys, whereas 72% of them said that the problem delayed the deployment of new hardware and/or software.
The findings suggest that technology spending alone is not sufficient when it comes to digital transformation. Digital investments must be complemented with the appropriate training programs.
Meanwhile, Rackspace Technology’s recent Multicloud Annual Research Report 2022 indicates that organizations are facing difficulties in hiring and retaining IT talent.
DigiconAsia discussed the above issues with Sandeep Bhargava, Global Head, Solutions and Services, Rackspace Technology:
What is the state of digital transformation in Asia given the current economic headwinds? What are your predictions for the next few months now that we are in the post-pandemic era?
Sandeep Bhargava (SB): As digital-first CEOs in APAC aspire to increase their digital share of revenue, a recent IDC study shows that they are prioritizing digital business models such as industry digital ecosystems (73%), as-a-service consumption (62%). Digital-first CEOs plan to drive at least half of their income from digital products, services, and experience by 2027, ahead of the market average of 39%. We observed that amid the current economic difficulties, organizations are going ahead with digital transformation plans as they recognize the need to innovate to stay ahead of their competition.
So we know that business leaders want to ensure digitization brings continuity amid current volatility, while also having one eye on the long term. Achieving this hinges on being dynamic, and it will look different for every organization, but the core commonality is to move IT from being inflexible and reactive to being proactive, agile and aligned to the business. This is particularly critical amid the current business uncertainty, which is likely to persist for the foreseeable future.
Tech talent shortage is not just a tech issue, but also a major business challenge. What are the challenges in terms of hiring and retaining technology talent in Asia?
SB: As we know, the pandemic-induced digitalization drive was a response to a thirst for flexibility and a desire for innovation amid major uncertainty. However, this — sometimes haphazard — implementation has raised IT complexity, exacerbating existing skills gaps. Overcoming this involves multiple stakeholders, but for businesses, it is critical that they invest in employee growth through reskilling and upskilling initiatives.
Organizations should be mindful of what staff concerns are when they embark on efforts to bridge digital skills gap; for instance, understanding employee pain points with the existing technology stacks as well as how daunting it can be to learn the ins and outs of a new tech solution or tool.
Organizations can also encourage employees to invest in themselves when they tie in reskilling and upskilling to a defined career path.
How will businesses/the economy suffer if we don’t plug this gap soon enough?
SB: According to our survey of global IT leaders across industries, more than half (52%) of all respondents cited talent shortages as a major business challenge, well ahead of concerns such as product shortages (36%) and wage growth (28%). Companies are employing a variety of tactics to attract new IT talent, including promoting opportunities for training and development (43%), offering hybrid/flexible/work-from-home schedules (37%), and increasing starting salaries (31%). Twenty-three percent are being even more aggressive, luring talent with large starting salaries or increases, while 16% are offering sign-on retention agreements and 15% are offering signing bonuses.
Some of the short-term impacts of the digital skills gap include low productivity and low-quality output, delays in launches and migrations, as well as increased workplace stress and high employee turnover.
With employers struggling to find the right talent to match their business and technical needs, the knock-on impacts of digital skills gaps can put a significant dent in business growth and economic recovery as we move post-pandemic. In the long run, businesses in Asia that fail to prepare, plan, and address the skills gap are increasing their risk of being outpaced, out-innovated, and ultimately ousted from the market by competitors who do embrace change and innovation.
How can Asian countries develop a holistic talent pipeline that serves to digitally upskill employees, so that we can fix the overall skills gap here?
SB: Collaboration with governmental agencies inevitably offers opportunities to equip the workforce to raise their digital skills. In Singapore, for example, we see an encouraging trend where the national SkillsFuture programme offers prospective higher education students guidance on choosing courses that help set them up to meet demands of the future labor market.
Similarly, Hong Kong is implementing the IT Innovation Lab in Secondary Schools and Knowing More About IT Programme to subsidize local primary and secondary schools to organize extra-curricular activities related to IT, thereby cultivating students’ interest in IT from a young age. Collaboration with the education sector can also help tailor curricula to market needs.
Engaging with other stakeholders can also ameliorate talent shortages. With investment in solutions or building partnerships with specific specializations, organizations can build a more future-ready workforce while simultaneously growing their business.
Finally, empathy goes a long way, and businesses should foster employees’ inclination to learn and try new things by creating an environment that is encouraging and conducive to learning. While this can be difficult to juggle with short-term business imperative, organizations can explore inventive ways to try this.
At Rackspace Technology, for example, we designate every third Thursday of the month as Innovation Day, where staff have the opportunity to take a break from the daily grind and actualize their best, innovative selves, whether it be focusing on a project, engaging in a training session or catching up on work.