There is no doubting the drive towards digital transformation, and the impact it brings, is accelerating. We can see it with the rise of fintech opening up financial inclusion for millions, or telemedicine and healthtech solutions transforming the healthcare sector. But these “tech” innovations are often driven by startups disrupting their respective industries, rather than by the digital transformation taking place within large corporations.
Digital transformation has been a buzzword for over a decade
While digital transformation has been a buzzword for over a decade, the Covid pandemic and world-wide shutdown provided an additional boost to digitalization efforts. Digital financial transactions increased, businesses had to move processes online overnight, and governments deployed new technologies to track and monitor populations.
Yet despite this forced acceleration, many large organisations are still pursuing the ‘inefficient’ path towards digital transformation. While bigger budgets mean bigger investments in new technologies and the ability to hire more tech talent, this will only take corporations so far unless the rest of employees possess the right digital skills for the business of the 21st century. Tech is no longer a skill reserved solely for the tech teams. Companies need to invest in upskilling existing team members for tech enablement to be engrained within every day thinking and processes.
87% of employers are experiencing skill gaps and talent shortages
Research by McKinsey suggests that 87% of employers are experiencing skill gaps and talent shortages globally, and an estimated 85 million jobs will be unfilled by 2030. A survey of employers across emerging markets by Nexford University, found that half of all employers reported at least 20% of their teams needed upskilling. This number will only grow as employee skills continue to develop at a slower rate to the wider digital transformation taking place.
The standard answer for skill shortages from executives – at those businesses who can afford it – is to find a consultant. But this can end up being a sticking plaster or ointment when a more long-lasting treatment is what’s really required. Those whose budgets can’t stretch to expensive consulting contracts are left behind to think about replacing lost talent by hiring new talent. Another expensive ‘inefficient’ path – more attention should be placed on upskilling or reskilling existing company talent.
Ultimately the identified employee skill gaps will still need to be filled, whether the new vice president of product you just hired delivers a new best-selling product or not. The lack of skills is the root cause holding back digital transformation in companies, and the only sustainable way to address this is through creating a culture of education that looks to continuously upskill existing employees to meet the demands of modern business.
Building internal capacity and being adaptable to changing circumstances and demands through upskilling is more impactive, sustainable and cost-effective. The experience of Nigeria’s Sterling Bank offers lessons on how alternatives to using consultants can pay dividends.
Sterling Bank faced significant challenges to its expansion and transformation projects; an underlying lack of skills acquisition in Nigeria (44%) compared to the average across Sub-Saharan Africa (55%) coupled with Nigerian employers facing most difficulties in filling managerial, professional and technical jobs due to lack of skilled applicants.
In response to the skills shortage Sterling Bank decided to join the ‘Nexford for Business’ program in 2020, focused on reskilling and upskilling employees. Via the Nexford platform, Sterling employees can carry out training programs and develop the skills that align with the business needs. While employees benefit from the company-funded educational courses and improving their workplace skills, the main beneficiary is the company whose team is better equipped in the digital skills that will enable the business to be more efficient and productive.
There really is no substitute for education – helping to reskill the existing workforce and the pool it is drawn from locally, and regionally through online education, makes more sense than reaching out to consultants?