Companies around the world are now understanding that the talent paradigm is shifting. There is, in fact, a continuous war for talent worldwide, with a pressing need for businesses to develop a skills strategy that looks at both the need to operate the business in a cost-efficient matter, while redefining the business model at the same time.
In Singapore, government and the private sector have come together to develop Industry Transformation Maps (ITMs), which are part of their strategy to sustain their economy into the future. The ITMs are designed to be road maps tailored to industries to address specific challenges collaboratively, by trade associations and chambers, businesses and government, in order to develop skilled manpower. While ITMs are perceived to still need streamlining and improvement, the basic concept is sound.
Each ITM includes a relevant Skills Framework, which was established to provide a common skills repository for individuals, companies and training providers to help people remain competitive and employable in the disruptive business environment. However, for companies to truly benefit from the Skills Framework, they need to adjust the context to their own business needs.
A recent EY article, Skills at the heart of talent strategy, identifies five key considerations for companies:
ALIGN YOUR TALENT WITH THE BUSINESS STRATEGY
As more disruptions occur, companies are starting to see that their past successes are not guaranteed to carry them into the future. Digital, for example, is a primary concern. Companies need to identify the right skills to sustain their strategic digital goals in their work force plan, regardless of industry. Without a clear idea of how digital will impact future operations, some companies may struggle to balance the need to “buy” or hire digital talent, and “build” or develop the talent internally through training. They will also need to constantly monitor the skills development of the existing work force in order to manage possible obsolescence.
PLAN YOUR WORK FORCE BASED ON SKILLS
To remain competitive and successful, organizations need to have the right people with the right skills, when they need it and at a reasonable cost. This means identifying the optimal number of people and the type of skills profiles needed. This includes analyzing existing competencies and abilities, and projecting how they will fit into future business needs, and performing a gap analysis between the required work force strength, the changing job requirements, and the necessary training to develop the right skills and competencies.
HIRE FOR SKILLS
Another traditional practice that companies should consider changing is how they recruit talent. Recruitment teams should place more emphasis on skills-based interviews — combining the parameters of knowledge, attitude and competencies, as opposed to the usual getting-to-know-you interviews. The interview process should replicate the work environment as closely as possible, and should ask questions that specifically assess the needed competencies for the role. One such technique is using a behavioral event approach, where candidates are asked to describe their behavior in an important situation in the past, so that the evaluation is based on actual events.
Likewise, this goes back to the earlier point about skills-based manpower planning. Recruitment can leverage effective job profiling to identify candidates who have the right skills for a position, independent of academic degrees. It also allows candidates to better communicate how their knowledge, skills and competencies are relevant to potential employers, as well as how they fit into the organizational culture.
IMPLEMENT SKILLS-BASED REMUNERATION
To better develop and retain needed skills, companies can consider shifting from a “fixed-pay” remuneration system to a skills-based one where wages and pay progression are linked to knowledge, skill mastery and competency. This, however, will require companies to accurately measure their employees’ perception of rewards and balance against a cost-benefit analysis that is specific to the company’s strategy. Using data analytics, companies can better make holistic decisions on reward programs.
Having a skills-based pay system may result in higher wage costs since employees receive more wages, incentives and bonuses for acquiring the right skills. However, it may also translate into leaner work force models, higher productivity and new avenues of business for the company.
INVEST IN TRAINING
One of the oldest jokes in the business world has one manager asking another, “What if we train our people and they leave?” To which the other manager says, “What if we don’t, and they stay?” This illustrates the challenge some companies face in weighing return on investment for skills training. One way to address this is by shifting perspectives to see training as a long-term investment in the company’s success, and not a short-term cost. Proper training can help people add value to the company and expand their job scopes.
At the same time, employee surveys also often indicate that training is one of the key elements that employees look for in a job. By providing useful and relevant training, companies can help their people stay engaged and motivated.
This also boils down to the need for companies to create a corporate culture that embraces lifelong learning and flexibility. This is particularly important for businesses that are becoming more and more reliant on technology. A culture of learning can encourage your people to learn with enthusiasm, allowing them to maintain their lifelong employability and be more productive.
In SGV, we have made lifelong learning a consistent part of our corporate DNA since the company’s inception. Training is a major investment from Day One of a new employee. Even senior partners are provided with learning and development opportunities. True and effective training goes beyond classroom lectures although we also have those consistently. The bulk of the actual training for our people is on-the-job supported by a powerful and inclusive culture of mentoring. And as our people progress through the organization, they in turn become leaders and mentors who embody our values of excellence, service and stewardship to empower successive generations of professionals.
This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the authors and do not necessarily represent the views of SGV & Co.
Clairma T. Mangangey is a Partner and the Head of Learning and Development of SGV & Co.