How People Analytics Enables You to Bridge the Talent Gap
Being unable to close the talent gap at your organization is a serious issue, leading to missed opportunities and lost business now and in the future. But how can you figure out what skills you need to bridge the talent gap? Companies that embrace people analytics to uncover and bridge these gaps within their organizations will be better prepared than their competitors to win the war for talent.
Why do talent gaps occur?
Digitization is reinventing business. Organizational strategy is no longer an annual planning event—it is a constant readjustment to changing priorities. Technology and strategies are changing work faster than the workforce can adapt. In the past few years, competitive pressures, driven by the fast pace of technology change, have altered HR’s mission from managing risk and people processes to enabling the workforce to adapt to this constant, disruptive change.
However, according to Gartner, 64% of managers believe their employees will not keep pace with future skill needs. 70% of employees say they haven’t even mastered the skills they need today.
Industry leaders have been advocating for upskilling and reskilling employees for several years, but it doesn’t appear to be working well enough. Too many companies don’t have a clear idea of their employees’ capabilities or what skills they need to close the talent gap. By the time they figure it out, it’s too late to train. They must go to the market to buy skills or miss opportunities.
There is another way to bridge the talent gap. Using people analytics can help your organization uncover the existing and missing skills and plan how you can close the gap.
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If you are feeling the pressure to improve your team’s analytical skills, you are not alone. CEOs worldwide are concerned about HR’s ability to deliver. In a survey of over 1,200 organizations in 79 countries, PwC found that 41% of HR leaders believe their teams are ready, but only a fourth of business leaders agree.
Work step by step through identifying and closing talent gaps. You can help your organization start thinking about jobs and talent in a way that enables you to make quick progress in closing your gaps.
How to identify talent gaps at your organization?
People analytics is not a new tool from IT. It is a new mindset—a fresh way of thinking about people data—that leads you to ask the right questions to make better decisions about people and talent.
Some organizations have tried to gather all of their data and analyze it to uncover problems that need solving. It didn’t go well. They wasted a considerable amount of time and effort because they hadn’t aligned their effort to the business strategy. It was a solution looking for a problem.
The right way to get started is to begin with a business need. We’ll walk you through the thought process using a series of questions to ask yourself when uncovering your talent gaps.
How will trends such as automation, digitization, competition, and customer behavior influence your core business?
A big-picture analysis of your company’s strategic planning gives you a framework for thinking about skill needs. Review the company’s mission and how leaders view the current and future pressures and opportunities. This conversation will be your opportunity to enlist top-level support for your project and gain executive buy-in.
What technological and other changes are going on in your industry, and how will that impact your workforce?
Many business sectors are transforming in response to automation. For example, retailers can automate over 50% of their activities with current technology. Sensors and deep-learning algorithms can track shoppers through stores and detect when they take products from the shelves.
Shoppers then just walk out of the store—no lines or checkout. The stores still need people to greet shoppers and restock shelves. Associates now spend their time answering questions and making product recommendations instead of ringing up sales on a register. That shift requires a different set of skills.
What skills do we need to respond to these trends?
Analyzing skills in today’s world requires a new way of thinking about jobs, roles, competencies, and skills. Jobs are changing, and skillsets are fluid.
Analytics will help you assess what skills are in demand now and in the future. Instead of focusing on jobs that will be created, change, or disappear, you can identify current and future skill demands. Gartner recommends separating skills by three principal trends.
- Emerging: new-in-kind skills like blockchain.
- Evolving: shifting from legacy skills to new technologies, like relational database management (RDBMS) to graph databases.
- Expiring: becoming irrelevant or being replaced by automation.
What skills do we currently have?
In your analysis, you should not let job structures define skill sets. Let the skills define roles and expect them to change.
This change in thinking will require new skills inventories that don’t depend on job classifications. Forward-thinking HR technology vendors are paving the way for managing the new structures. Some are already introducing blockchain into their skill structures.
What skills do we have that are adjacent to the skills we need?
The new skills you need may already exist in another part of your organization, or you will have people with related skills that can quickly upskill into a new role. A marketing analyst may easily transition into people analytics. A Python programmer already has some building blocks for a natural language processing (NLP) role.
Viewing skills in this way opens up alternative career paths for your people and creates an entirely new level of thinking about your internal talent market. You will discover hidden sources of talent and retain your high performers.
9 ways people analytics helps you to bridge the talent gap
Your people and your HR operations, and the total workforce generate a tremendous amount of useful data. The challenge for HR is to use both internal and external data to close their organizations’ talent gaps by making faster, more informed talent decisions.
Investing time and resources into people analytics (or talent analytics, depending on where you are) can be the catalyst that enables your company to close its talent gaps. Here are a few examples of what you can do:
1. Understand and anticipate business strategies and labor markets
Using external data and your workforce data, you can understand how business trends, automation, and digitization influence business decisions and impact your workforce.
Using forward-looking analytics, you can develop predictive models to inform your business strategists on talent availability. You can anticipate a talent gap before it happen, so you can develop plans for closing it. The information you uncover can inform both short-term and long-term business strategies.
For instance, if you discover that you will need more machine learning specialists in the near future, you can start looking for freelancers for your upcoming projects but also research where and how you can hire full-time ML specialists and if and how you can upskill your existing engineers.
2. Transform your recruiting strategy
By understanding skill sources and availability through tracking relevant recruiting metrics, you can target recruiting more effectively. You can save costs by putting your resources only into those sources that produce results.
Understanding localized labor markets better can help you build a solid sourcing strategy. For example, some companies have found that critical skills, such as data science, can cost less if they hire from small-town colleges rather than competing in large metro areas.
3. Increase onboarding effectiveness
Pre-employment assessments can give you an edge in understanding employee strengths and challenges so that you can create customized onboarding plans. A personalized approach will increase self-development and engagement and lower your new hire turnover rate.
For example, if the pre-employment assessment data shows that your newly hired data scientist is experienced in Python but not so much in R, you can put extra focus on this statistical computing language in your onboarding and training plan.
4. Improve participation in assessments
Using canned, generic assessments can lead to candidate disengagement and high ghosting rates, which can cost you candidates with valuable, much-needed skills. Aon assisted Rolls Royce in designing a shorter, more engaging assessment that increased their completion rates to 98%.
5. Improve learning and development
Employee assessments can also enable you to develop personalized development plans. A well-designed tool will help you create plans that motivate your people by giving them a clear path to self-improvement based on building the skills that they are currently lacking or that they wish to improve.
These personalized development plans can also open up paths that individuals may not have thought possible.
6. Enable internal mobility
The most powerful way to transform knowledge into skill is to put it to work on the job. It is also the best way to reward self-improvement.
If you create an internal talent marketplace within your organization, you will uncover a new talent source that will make gaps easier to overcome. You will also have a significant impact on retaining your best people.
At the onset of the COVID-19 pandemic, consumer goods company Unilever used its internal talent marketplace to redeploy over 8,000 employees once they saw an increased demand for their hygiene-related products and a declined interest in restaurant food services.
7. Reduce employee turnover
High turnover rates can contribute to widening the talent gap at your organization.
HR pros learned long ago that exit interviews by themselves are not practical data gathering tools. The problem is even worse if you allow exiting employees to check off a reason from a list.
You can create more in-depth insights into worker turnover using active and passive data collection to understand the genuine reasons people leave the organization.
Experian built a predictive model analyzing about 200 attributes and circumstances that might drive flight risk. Their analysis discovered that being on a team of over 10 or 12 people increased flight risk. They now include that risk in their organizational design models.
Some of their discoveries merely validated their hunches, but the analysis made it possible to present evidence-based conclusions to managers as they designed their interventions.
8. Manage alternative work relationships
COVID-19 accelerated the trend toward non-traditional employment relationships. Many companies found that some of their people were more productive working at home. 72% of remote office workers say they want to work away from the office at least two days a week, and 32% don’t want to go to the office at all.
Much of most companies’ workforces are not only employees, but contract workers, consultants, freelancers, and contingent workers:
- In the US and EU, gig workers make up 20-30% of the workforce.
- By 2023, 88% of companies will be using gig workers in field services and manufacturing.
- Since the COVID outbreak, 32% of organizations have been replacing full-time employees with contingent workers.
To manage the organizational skill inventory, HR needs to have a comprehensive view of all workers and their skills. People analytics comprises much more than employees in the HRIS. Data aggregated from multiple sources is imperative.
9. Improve change management and policy adoption
Paul Leonardi is the Duca Family Professor of Technology Management at the University of California, Santa Barbara. He worked with a large medical device manufacturer to discover why their change management effort wasn’t gaining traction.
He found that the company was selecting influencers from the people whom colleagues rated the most influential. They applied relationship analytics to learn the strength of connections instead of the number. When they chose influencers using the new criteria, they increased their new policy adoption rate from 15% to 75%.
Once you have worked through your skills assessment, you are ready to embark on a detailed skills gap analysis and develop a plan for closing the gaps.
You don’t need to hire a gaggle of data scientists and data wranglers to get started, as you probably already have much of the talent you need.
You may find that not all or even most of your analytics will entail advanced skills, but those that do require those skills may have the most impact on your business.
If you need a data scientist, you can borrow one for your project by engaging a consulting firm for a short time. Hiring a consultant for a couple of weeks is a lot less expensive than hiring one full-time.
You will be most successful if you think big and start small. Solve one talent gap and learn from it, then scale up as your capabilities grow. Practice your skill gaps analysis on yourself and your team.
If you want to learn more about people analytics and future-proof your HR skill set, check out our People Analytics Certification Program!