Solving the Skills Crisis

25 October 2011:

Here’s a cautionary tale.

In 2001, a US medical device maker expanded its product line to include a new heart defibrillator it had acquired from another company—despite the fact that it didn’t have the manufacturing and engineering skills needed to meet the strict regulatory requirements associated with marketing the new product.

Although managers put hiring and training programs in place to close the skills gap, they weren’t fast enough. Five years later, the US Food and Drug Administration discovered that during the first year of the product’s life, the company’s quality engineers had not met federal government requirements, due to inadequate knowledge and skills. Skepticism about the product’s safety swiftly followed, and in 2010, the business had to be sold.

Interesting, you say, but not your problem. After all, with global unemployment at near-record levels, there’s obviously a huge pool of qualified talent out there, in practically every discipline, just waiting to be hired . . . right? Wrong. The medical manufacturer had discovered what thousands of companies—across industries, geographies and types of workforces—are currently experiencing: New skills requirements cannot be met by old, traditional methods.
Counterintuitive though it may seem, about a third of employers worldwide are experiencing critical challenges filling positions due to a lack of available talent, and almost three-fourths of employers are affected by talent shortages to some degree. The people are there, just not the right people—those with the knowledge, skills and abilities companies need, right now.

It’s a situation with potentially grave business consequences. For many companies, skills gaps have resulted in delays in product releases, reduced customer satisfaction, loss of revenue and, sometimes, the demise or sale of the business. In a rapidly changing world where talent is increasingly what propels an organization ahead of the competition, organizations are finding that their ability to quickly and effectively develop skills they need is one of their most important competitive differentiators.

Doing nothing is not an option, nor is making only incremental improvements. If companies are to generate a new period of growth, they must adopt new strategies to ensure they have the skills they need to succeed.