The global digital skills gap is growing at an exponential rate. According to the Coursera 2019 Global Skills Index, a whopping two-thirds of the global population is falling behind in critical skills, with 90% being in developing economies. IDC echoes this in their 2019 Futurescape report, stating that two million jobs in artificial intelligence (AI), the Internet of Things, cybersecurity and blockchain will remain unfilled by 2023 due to a lack of human talent. The truth is that the rate at which technology is evolving is faster than the rate at which skills are being developed.
Considering the skills shortage, many CHROs are realizing that a one-size-fits-all approach to talent management won’t work in today’s volatile, uncertain, complicated and ambiguous world. Instead many global organizations are looking towards a creative and insights-driven approach to plugging the gap.
Instead of favoring a localized approach, many are accessing the global talent pool. A good example of where this could work well is in a market such as Canada. According to the Robert Half Salary Guide 2020, with its burgeoning startup culture and immigration policies, Canada is looking to attract skilled technology from across the world.
The three key factors to considering when selecting from the global talent pool
Where the world is your oyster, it is important to know where to find the best people for the job. In order to achieve this, global organizations need to consider three factors:
- Concentration of talent
- Labor costs and efficiency
- Business Environment
Concentration of Talent: Finding the right people to fit the job
In a world where connectivity allows for a flexible and global workforce, leveraging pockets of excellence across the globe can be a step towards closing the digital skills gap. Businesses therefore need to identify where concentrations of talent lie. A study by HackerRank identified the countries with the most comprehensive IT skills. Eastern Europe came out on top with the top four including Slovakia, the Czech Republic, Hungary and Poland. Countries with the best developers included China, Russia, Poland, and Switzerland.
Another area of expertise that CHROs are looking into include innovation hotspots. The JLL Global Innovation Ranking report identified San Francisco in Silicon Valley. Yet the top positions are not all dominated by U.S. cities, but rather evenly spread across the three main global regions, with Asia Pacific cities like Tokyo and Singapore having a stronger presence in these rankings than they would have had even a few years ago.
Labor costs and efficiency: Matching the right talent with competitive compensation
Labor costs and competitive compensation also need to be taken into consideration when identifying talent across the globe. One study by CapRelo looked into the average salary of a Software Engineer globally. Unsurprising, Silicon Valley came out on top with $85,000 as an average salary for an American software engineer and the second highest in the world, trailing only Switzerland’s $94,567. The key is to map out a company’s specific labor requirements while remaining competitive.
Business environment: A nimble response to the changing business environment
The ever-changing business environment should also be considered when building a global labor force. In response to changing business needs, the 2019 Global Skills Index showed that the global appetite for developing technological skills is slowly increasing at the expense of traditional business skills. According to the report, the demand for business skills such as sales or communications have been diminishing, while the demand for skills in technology and data science have grown exponentially. In fact, technology enrollments increased 13% since last year, while business enrollments fell by 11%.
While the industry plays catch up, it is vital for businesses to proactively continue with training initiatives in foundational business skills with current employees. According to the World Economic Forum ‘HR4.0: Shaping People Strategies in the Fourth Industrial Revolution’ report, the workforce rates the opportunity to learn among the top reasons for taking a job. The report goes on to say that 94% of CHROs prioritize the move from episodic training to perpetual reskilling to enable a nimble workforce and respond to the changing nature of work.
At the same time, companies should be aware that those adopting a flexible approach to globalized talent will be left with a new emerging challenge of creating a remote culture experience as well as enhanced management skills to manage an increasingly dispersed workforce. Implementing effective global talent hubs will require a solid foundation, which without will prove to be costly; however if implemented properly can provide a healthy supply of technology talent to fulfill the growing demand.
Ultimately, technology can provide global organizations with the opportunity to access a global workforce. By having the right knowledge around pockets of excellence and compensation needs, a new flexible workforce can emerge. The key is to also continue with the implementation of ongoing training initiatives to arm the workforce with the right skills in an ever-changing world. As a global organization, SYSPRO continues to invest in our global workforce to leverage the right skills for unique market needs.