European companies struggle to recruit and retain talent with digital skills
Skill shortages in Europe are damaging the growth prospects of companies and the continent’s economy, according to Building a Better Working Europe, a new survey released as part of the EY Attractiveness Survey series. The most alarming talent shortages are in digital skills, with cybersecurity (48%) and artificial intelligence (AI) and robotics (48%) identified as the scarcest skills according to the survey respondents.
Andy Baldwin, EY Area Managing Partner – Europe, Middle East, India and Africa (EMEIA), says:
“Innovation is happening at a faster rate than companies can acquire the skills that they need to adopt new technologies. The relentless march of digitalization is already having a profound impact on the labor market, creating shortages in specialist digital skills and surpluses in other areas. The reskilling and upskilling of Europe’s workforce need to take an inclusive view on what talent means, implement comprehensive people strategies and commit to investing in the training and development of existing staff alongside the recruitment of new employees.”
Being digitally mature* pays back
Among the companies surveyed, 60% have digital transformation as part of their strategy, 57% have their people strategy as part of their digital transformation agenda and 54% have a chief digital officer (CDO) or a chief information technology officer (CITO). These three elements, however, co-exist in only 17% of companies, which have been classified by the study as “digitally mature” and have a board-level technology “champion” as well as a people strategy that forms part of their transformation strategy.
Digitally mature companies that are managing their people strategy in the boardroom tend to have higher productivity (76%) compared with the chasers (73%) and the laggards (65%). In addition, staff turnover is much lower in digitally mature companies (59%) compared with the chasers and laggards (71% and 74%, respectively).
Investing in talent and rethinking the HR function
According to the survey, European companies recognize they have skill shortages and 89% say they are investing in improving the digital skills of new and existing workers. However, only 43% of companies have a human resources (HR) strategy that looks more than three years ahead.
David Storey, EY EMEIA People Advisory Services Talent Lead, says:
“Successful digital transformation strategies in European companies will depend on changes to the size, shape and skill set of their workforces. HR and people functions must take deliberate steps to drive these changes. They need to plan for the future workforce’s needs and develop, track and leverage the capability of current and future workers. New approaches to people analytics are generating deeper insights and enabling strategic workforce planning based on capabilities rather than roles. New approaches need new skills. Just as HR is focused on recruiting talent with digital skills, the function itself must also evolve and acquire its own digital and analytical talent base.”