I confess to being somewhat surprised when I first saw the most recent data from our International Business Report (IBR), revealing that the number one recruitment challenge for business leaders is a lack of key technical skills in candidates.
Surely with unemployment running so high in mature markets – 11.7% in the eurozone (rising to over 25% in Greece and Spain), 7.9% in the United States – there should be thousands of talented people battering down businesses’ doors?
Apparently not. Yet the issue is a recurring one. The lack of skills is an issue felt almost as keenly in the BRIC economies as in the G7. And whilst certain traditional sectors, such as mining and utilities, are particularly suffering, other modern, fast-moving sectors such as cleantech and technology also report significant skills shortages.
The results speak volumes for the disconnect between educational institutions and businesses, if on one hand business leaders are crying out for more skilled people, and on the other, swathes of unemployed people are crying out for a job. This is backed up by a recent McKinsey study[1] which suggests just 42% of employers believe graduates are well prepared for careers, compared to 72% of education providers.
The impact on economic growth is potentially enormous and represents a worrying vicious cycle: Businesses cannot expand because of a lack of talent and people cannot spend because they do not have an income. So business revenues fall and unemployment increases. It amounts to a huge waste of human capital and should therefore be high up on the public policy agenda.
A final note to business leaders: a business is nothing without its people. I believe a great team with an average plan will be far more successful than an average team with a great plan. So invest in your internal training programmes and hold on to skilled people. Reason is telling you to cut costs, but instinct says the best people will put you in pole position when the recovery finally kicks in.
[1] McKinsey & Company (2012) – Education to Employment: Designing a System that Works