What Is The Skill Gap Costing You?

According to a recent study from CareerBuilder, skills gaps cost a company more than $800,000 per year. For clarity, the skills gap is commonly referred to as the frustrating rift between what candidates have to offer and what companies are looking for. This leads to perpetually-open jobs and frustrated candidates at a minimum, but it can also contribute to reduced productivity, higher turnover, and revenue loss. The research points out that companies are having trouble finding the right people to fill positions, and it’s an issue regardless of company size:

  • 1-50 employees: 49 percent
  • 51-250 employees: 74 percent
  • 251-500 employees: 72 percent
  • 501+ employees: 71 percent

The problem has been around for quite some time, and at a macro level, it’s not going away anytime soon. On a company-specific level, there are activities that can help employers to not only understand their own skills gap, but to start filling it with internal and external talent.

Companies Aren’t Skills-Savvy

Even the discussion about a skills gap is somewhat misplaced, because these employers are focusing on jobs they can’t fill, not specific skill sets. And while we don’t advocate looking at employees purely as a set of skills under a biological disguise, it’s important to get comfortable with acknowledging what skills exist and how to leverage them. This focus on skills needs to be woven throughout the company’s talent practices:

  • Assessments: are you evaluating a generic set of criteria on each candidate, or are you examining the critical skills necessary for success in each role?
  • Selection: are your selection processes geared toward “gut instinct,” or hard skills measurements
  • Training: are you putting together yet another low-impact PowerPoint presentation, or are you seeking ways to develop the skills that create business value?
  • Recognition: are there processes in place to track progress and make employees feel that their efforts to acquire and demonstrate skills are recognized appropriately?

These and other talent practices can help employers to be more skills-savvy, adopting a mindset that skills are not only inherently valuable, but also a core element in a good talent management strategy.

Combating the Skills Gap

Quickly–what are the top three skills that matter the most to your business? Is it a specific sales discipline? Maybe it’s a consulting methodology. Or what about a technical coding skill?

To be fair, most business leaders would have trouble answering that question, because we’re not used to thinking in terms of discrete skills that our people have. At the same time, in the CareerBuilder study, nearly six out of ten workers said that they wanted to learn a new skill but couldn’t afford to. Our workers think about the skills side of the equation, but it isn’t a common boardroom discussion. There are three key areas that need attention to fix this gap:

  1. Peter Drucker said that what gets measured gets done, so if the problem truly is a gap in the skills that we have and what we need, then firms need to start measuring the skills inventory as a way to identify hotspots and other areas of improvement.
  2. Companies must get better about skill development. The number one reason people leave their jobs, according to Gallup, is because they want a chance to grow or develop professionally. Providing relevant development resources will reduce your turnover.
  3. Get clear on what skills drive business value. For some organizations, it’s going to be in how they consult with clients. For others, the skills that matter will be related to technology and software. Each firm is different, but understanding which skills drive business value is necessary in order to get buy-in from leadership to conquer your own skills gap.Organizations must get better about measuring, developing and tracking employee skills. Think about finding and fixing skill gaps. It’s a challenge, and it requires different thinking, yet every day high-performance employers are making strides toward success in this area. As we have pointed out, the value goes beyond the boundaries of talent and HR, extending to business areas like revenue, productivity, and performance.

P.S. To get a free personalized skill gap assessment click here.

3 Step Guide to Engage Millennial Employees

Engage Millennial Employees

The average millennial tenure is only two years. The average cost to replace is $24,000 not to mention the down time. With stats like these it’s important to have a proactive strategy to increase retention.

Millennials are different kind of talent. They grew up with chat rooms and Twitter. Engaging and retaining Millennials is more important than ever because they are now the largest segment of the US workforce. By 2025 they’re expected to be over 75%. This generation wants changes from employers in a variety of meaningful ways and they’re quick to leave if things don’t feel right.

3 ways to retain and engage millennial employees:

1)  Provide Frequent Feedback

In a recent study, 85% of millennials reported they want more feedback from their managers and 74% don’t know what their manager thinks of them. This sentiment aligns with the recent moves by companies like IBM, Accenture, GE & Deloitte to move away from the annual performance review to frequent coaching models.  Millennials grew up in a world of instant communication and feedback. They expect the same from their workplace.

Managers have a great opportunity to satisfy millennial cravings with performance data and frequent informal conversations about their development.  Managers can use this data to coach staff through roadblocks and help them attain goals.  Frequent feedback is the most important key to engage millennial employees.

2)  Empower Through Development

Millennials are the most educated generation with over 57% holding a four year degree.  Education and personal development is a high priority to this generation. 35% of millennials report being attracted to a company based on learning opportunities. Successful companies use competency based models to measure skill gaps with assessments.  This gives employees a clear pathway to skill development which in turn engages the employee while increasing performance.

3)  Leverage Technology

Millennials were raised with chat rooms, Twitter and Facebook. They check their smart phone 45 times a day looking for updates from their connections. This generation welcomes using technology to gather and track performance metrics. Allow employees to update their skill profile with each learning event.  Provide a way for them to monitor and be recognized for their progress.   Give them the ability to receive weekly feedback and individualized learning plans.  Leveraging technology will save companies time and deliver information the way millennials want it, at their fingertips.

The millennial generation has arrived in force with unique technology skills. Meeting them where they are can position your company for success.  Engagement and access to online resources has never been more important.
SkillNet offers a software platform to cultivate the talents of this generation by leveraging technology. Please visit our website and request a demonstration.

 

The Millennial Employee Infographic

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Check out SkillNet’s latest eBook, Improve Performance with Individual Development Plans.

Are your employees operating at peak performance? Find out how SkillNet can help upskill your employees and increase performance and retention.

The New CIO

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This story profiles an experienced CIO who’s been there and done it in a medium sized firm. He was recruited to join a Fortune 100 company three times the size of his current firm. At first he was totally excited, but as the time to start approached he began to worry. His new team is four times larger, he has twice the number of direct reports, including two international regions, and one of the functional groups is in an area where he has almost no experience or knowledge.  He has been hired to fix what top executives believed was a broken area and is under the gun to perform and perform quickly.

 

We’ve all been there

New in a role with high performance expectations, limited time to make an impact, and with extremely limited knowledge about team capabilities – competencies and skills, strengths, weaknesses, track record, style, etc.

In the past, when companies were centrally located, the task of gathering data on employees was much easier than it is today.  In our current global environment, traditional approaches are becoming outdated.

Four traditional ways leaders discover what they need to know about the team

In-person observations

Leaders observe the performance of direct reports in the work area, at meetings, on calls, and more. This gives some insights, but can be very time consuming and a logistical nightmare when multiplied by global operations. And, what about the people who report to the direct reports?

Individual video conferences

Leaders conduct structured video conferencing interviews with each direct report. This is logistically easier, but limits the validity of the information since it is not actually observed behavior. And it’s awkward to go through a checklist for skills, knowledge and behaviors expected for the role in a video conference.

Employee file review

Leaders can review each direct report’s file to learn the experiences and views of other managers. Usually, this is simply the static annual performance appraisal with comments and a few letters of praise or otherwise. The problem is that everything is based on the biased views of the previous manager. And, if the new leader is replacing someone who was not viewed as successful, is this a good idea?

Ask for feedback

New leaders can ask other people to share their views about each member. Opinions from internal and external customers, senior management, co-workers, and more could be asked to provide insight and details on performance; basically a verbal multi-rater assessment. This method is time intensive, and can be logistically challenging.

Most leaders try a mixture of these approaches to “optimize” the logistics and reduce bias. At the end of the process though, these approaches take a lot of time and have questionable validity as the basis to make key decisions and with confidence.

There is a better way

We recommend starting with a clearly defined 30-50 attribute competency model for each role and asking each member to conduct a self-assessment. This is an ideal starting point for meaningful, specific, actionable conversations. It provides a way to learn what each team member thinks of themself in terms of knowledge and skills. Most importantly, when discovering the performance capability, potential, or gaps of the new team; starting with their own opinions demonstrates interest and respect.

SkillNet helps successful companies provide an easy to use competency modeling tool with self and multi-rater assessment features. We can also collect and manage internal and external certification data.

Please share how this compares to your experience. We welcome your comments and ideas!

Our next post will describe other ways for the new leader to get a running start in terms of knowing who is on the team and developing his new staff.

Frequent Performance Reviews

perf reviewPerformance reviews aren’t done frequently because it’s too painful and difficult.

Many companies want to move away from annual reviews but doing it once a year is already so painful that the thought of doing that same process more once a year is too much to consider. The current process is difficult for the reviewer, the subject, and those involved in doing 360 ratings.

Doing frequent performance reviews requires a transformation to the approach. Circulating performance templates isn’t the answer. The best way to make this work is by automating the assessment process and presenting results on demand for management.

SkillNet software automates the competency model, rater feedback, and generates individual development plans. We’re part of the growing movement supporting innovative businesses like GE, Dell, Adobe, Accenture and others replacing painful annual review with frequent skill based feedback.

Are you still doing annual performance reviews?

When it comes to Performance Reviews, Nobody Likes a Surprise

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At a gathering earlier this year, I found myself in conversation with a new acquaintance who had just finished up his first year with a mid-sized IT firm. Being interested in staff development as I am, I asked about how the dreaded annual review had gone. Turns out that his manager had given him a run of the mill critique – some good, some bad, but one aspect of the review really stuck in his mind and left him feeling upset about the process.

Of the negative feedback he’d received, intended as constructive criticism, a majority was related to skills and behaviors that weren’t in his job description or ever discussed. With a year of work under his belt, he felt blindsided by his performance review. He felt he was being evaluated for skills he didn’t even know he was supposed to have.

Who wouldn’t be discouraged by this situation? Surprises like this leave people frustrated and on the defensive. Done right, these could have been simple discussions or suggestions to raise talent levels. Progressive companies are using shared expectations and ongoing feedback to develop and retain top talent. An article published last year highlighted Jeff Lawson, CEO of Twilio, who explained that “If you get into the habit of regular feedback, it’s not confrontational; it’s just the ebb and flow of conversation and a constant tweaking of how you work with somebody.”

Are you sharing your expectations and feedback with employees, or are they out talking about your poor review process with strangers?


Annual Performance Reviews Don’t Work

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When performance management reviews are brief annual events, they often do more damage than good. It’s like a football coach reserving feedback until the season ends.

Employees at all levels benefit from frequent informal feedback and specific guidance to improve. Most employees seek continuous ways to develop knowledge and skills. Ignoring these needs can lead to problems, especially with high performers.

Employee engagement studies show the importance of frequent performance feedback but it’s often manual and difficult on managers. 

Managers need tools to facilitate informal and frequent discussions about strengths and weaknesses. They also need to track results. Spreadsheets and notes are not sustainable. SkillNet offers informal, skill based, performance review methods that is proven to improve performance.



Badges engage users in personal and organizational growth

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According to many sources, the millennial generation are highly motivated by recognition.

We don’t think it’s just the millennial generation that’s inspired to be known for skills or knowledge. Shining light on positive attributes is good for everyone. High potentials thrive on the widespread acknowledgement of their achievements. We believe that positive recognition triggers important domino effects that ripple through the organization. People aspire to gain recognition of those same competencies or other skills or knowledge they feel benefit the firm. These elements guide each persons journey on individual performance. 

There is another far reaching important benefit of digital badges and recognition. Badges clearly reinforce organizational goals and objectives by highlighting the individual achievements that matter most to your organization.

How can you leverage badges and recognition in your firm?


Why Top Talent Leaves: Top 10 Reasons Boiled Down to 1

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recent Forbes article by Erika Andersen explains that the top reasons people leave all boil down to one reason: Top talent leave an organization when they’re badly managed and the organization is confusing and uninspiring.

A popular article  published last year explains the top 10 reasons people leave their big-company jobs. Poor people management is half the problem: Not being part of an exciting project, a bad performance review, problems with their boss, unclear career path, and lack of recognition. Organizational failings are the other half of the problem: poor leadership, gridlock, unclear vision, uninspired coworkers, and shifting priorities.

Andersen says there are two keys to retaining top talent: first, make management a priority and promote those who manage well. Second, have clear priorities and an inspired vision that sets your company apart.

To really bring out the best in your people, everyone should understand how their personal role connects with the goals of the organization. Each person needs to see what is expected of them and have a personal development plan to get there. Individual goals should be tied to departmental goals which connect to the companies high-level aspirations.

Most importantly, these plans need to be transparent where leaders and employees informally and frequently talk about goals, priorities and progress. The best companies recognize accomplishments and shine light on top performers.

How can your business do better at retaining your talented employees?