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Bridge over the troubled waters: The EU skills gap

Partnerships between business and academic institutions can overcome scepticism about value of intervention

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European Commissioner for the Digital Agenda, Neelie Kroes, unveiled plans for a “Grand Coalition of ICT Skills” designed to bridge the digital skills gap currently being felt in the Eurozone.

In certain respects, this is not surprising. The pervasiveness of technology in all sectors and businesses means that employees across every industry must develop and maintain equally sophisticated skill-sets to keep up. Moreover, the lightning pace at which technology is evolving means that at ever-shortening intervals, this training (for the workforces of today and perhaps more importantly tomorrow) becomes obsolete.

However, this is not just a problem in the technology space. Research carried out by Accenture in December last year reveals that 91 per cent of UK senior executives from across all sectors believe that investing in the skills of their employees is essential for their businesses to grow; particularly during turbulent economic conditions.
This is the skills paradox we’re facing at present - investment is lowest when it is needed the most.

The fact is that in the teeth of a global economic crisis, businesses have to stretch smaller budgets further, meaning they have less financial resource to allocate to this skill-maintenance. Indeed, a recent EU-wide piece of Accenture research revealed that 86 per cent of decision-makers had either reduced or frozen their levels of investment in skills and training in the previous 12 months.

People and skills are the bedrock of the European economy and unless business leaders act quickly, Europe faces a downward spiral of low demand, high unemployment and skills shortages. So how can Europe enhance its approach to developing skills among the workforce? Our research has identified 3 imperatives.

Activating untapped labour pools
There is a vast reservoir of untapped talent in Europe, namely some 25 million unemployed workers and a further 15 million “discouraged workers” comprising mothers, older people and youth. Previous attempts to mobilise these groups have foundered on their failure to recognise the differences between them; the difference between, say, an unemployed skilled worker who needs retraining for another career and a “discouraged” worker whose skills have been eroded by a long period of professional inactivity.

Using analytics to generate insights from labour data could go some way towards remedying this by enabling bespoke initiatives to train the unemployed; ones which are tailored to their characteristics, challenges and skill sets. Often the talent that organisations need is easily accessible but just hidden from view.

Mobility and transferability of skills
In her speech, Commissioner Kroes envisaged a system whereby employee skills could be more easily shared across the Eurozone. “We must encourage mobility for…workers, and fix that problem. Of course, supporting free movement, in any sector, is the EU’s core business,” said Kroes. Indeed, while 47 per cent of respondents to the UK-based research indicated that they were using the full range of skills available in their domestic market, this figure fell to 28 per cent in respect of skills located across Europe.

Improving mobility within an organisation is a useful first step at a micro level inasmuch as it equips workers with a more diverse range of skills and creates latent talent pools which can be deployed in situations of restructuring. Organisations also need to become more adept at looking outwards and recognising talent further afield. On the policy side, regulators must establish a more streamlined immigration system for highly skilled workers. This is always a political tightrope and particularly so at times of crisis but policy makers must work to protect the free movement of skills from the current hostility to trappings of the common market being expressed by some domestic factions.

Strengthening the skills ecosystem
Worryingly, nearly half of both businesses and government decision makers believe that targeting public investment in education and skills is only minimally effective. Increasingly, businesses are recognising the need to take a more direct leadership role in addressing skills issues.

This can be done by building partnerships between businesses and educational institutions, enabling the private sector to positively inform the curriculum and offer work experience. B2B partnerships around skills would also help pool resources and develop a more versatile workforce. 48 per cent of those surveyed across the EU indicated that skills investment would be more effective through joint projects within a particular industry.

As Commissioner Kroes concluded: “This is serious: it matters to our people, to our global competitiveness, to our very future. But the European Commission cannot do it alone.” This is where enterprise must step in. The EC can help provide the framework but businesses must drive the agenda. With informed targeting of the out of work demographics, improving the fluidity of skills across the Eurozone and a concerted engagement with education and training, Europe can realise the potential of its chief resource: its people.

Posted by Andrew Poppleton, Managing Director, Technology, Accenture UKI

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