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Business investment in developing skills has not kept up with the growing demand for new skills during the pandemic

Chris McCarthy, CEO at Degreed
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The State of Skills: Endangered Skills 2021 

To compile this report, we surveyed 5,000 workers in eight global markets to reveal the impact of the coronavirus pandemic on skills and which businesses, sectors and job roles are most at risk. Countries surveyed: UK, US, India, Australia, Germany, France, Mexico and Brazil.  

Top line global findings include:  

  • The coronavirus pandemic has accelerated the need for the majority (60%) of workers to build new skills  
  • Yet nearly half of businesses (46%) have reduced upskilling and reskilling opportunities  
  • The skills gap is set to widen further as three quarters of workers predict their current skills die out in the next 3-5 years  
  • This is impeding workers’ productivity and performance, and intensifying “people costs” for businesses, such as employee wellness and turnover 

Top line HR findings include:

  • HR – lack of skill data holding back organisations  
  • Organisations are flying blind on skill data, because HR systems can’t keep pace 
  • Only a third (34%) of workers believe that the most up to date data on their skills is on their employer’s HR systems and 18% say there is no real time data on their skills anywhere.  

In a post-pandemic world the right skills are needed to ensure organisations are future-proofed and employees are able to succeed –  but this starts with recording the right data  

Workers’ mental health damaged by lack of upskilling during the pandemic:

  • Research from Degreed has found that that the need for workers to learn new skills has increased as a result of the pandemic but they aren’t getting the support they need. Upskilling opportunities have been cut since March.  
  • When they don’t have the skills to do their job effectively, 55% of people find their jobs more stressful and 38% saying this causing their mental health to suffer 
  • Combined with the wider mental-health impact of the pandemic and increased remote working, employers need to ensure their workers have the skills to not only survive and thrive. This won’t just improve the business’ bottom-line, but their staff wellbeing too.  

A lack of skills development will impact global economic recovery post-Covid. The World Economic Forum estimates that closing the global skills gap could add US$11.5 trillion to global GDP by 2028. Without investment in upskilling, this gap is set to widen.   

Surveying 5,000 workers in eight global markets, The State of Skills: Endangered Skills 2021 highlights the skills now most at risk of becoming obsolete and the sectors, countries and job roles most in danger. The report is designed to help businesses target upskilling investments at the areas most likely to positively impact their organisations and employees.  

The current economic uncertainty resulting from the coronavirus crisis is accelerating demand for new skills among 60% of workers. Yet, nearly half of businesses (46%) have reduced their upskilling opportunities in the past six months. 

The result is a widening global skills gap: over a third (38%) of workers feel less confident they have the skills to do their job effectively, compared to pre-pandemic, and nearly half (46%) predict their current skills will die out in the next 3-5 years. 

Employees report this is increasing stress levels, and reducing their productivity and performance, which, in turn, hurts businesses. 

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When skills confidence is low, over half of workers (55%) feel more stressed, but also find that tasks take longer to complete (41%) and work is of a lower standard (22%). Nearly half (46%) of global workers also say they are likely to leave their employer if there are no upskilling opportunities.   

The report is the first to reveal the specific countries, sectors and job roles where skills are most endangered:

Sectors where skills are most at risk:

  1. Skills in technology and telecoms,
  2. Finance
  3. Engineering 

Countries most at risk of skills mismatch:

  1. India
  2. France
  3. Brazil

Job roles where skills are most endangered:

  1. IT
  2. HR

Chris McCarthy, CEO at Degreed said:

“The businesses that survive and flourish following the crisis will be different than they were before. This means workers are having to sharpen their current skills and build new ones to meet changing demand. Yet just as upskilling became vital to economic recovery, most organizations have cut investment in learning and development opportunities. We already know the global skills gap is costing trillions of dollars in lost GDP. Not to mention the impact on employee wellbeing.  

“Despite the urgent need to upskill, businesses can’t make informed decisions as they don’t have the data they need. Up-to-date information on the workforce’s skills, if it exists at all, is often spread across multiple outdated HR systems used once or twice a year for things like compensation and benefits. Without this data, businesses can’t make smart decisions about the skills they need for growth, and even if these can be sourced from existing workers within their organisation or need to be learned. By understanding the complete picture of your organisation’s existing skills and targeting your energy and investment where there are the biggest risks, you’ll have a clear focus for the road ahead, improving your odds of success – and your people’s too.” 

Methodology: Degreed commissioned independent market research company, Censuswide, to survey 5,208 workers in the UK, US, India, Australia, Germany, France, Mexico and Brazil between 4th and 12th August 2020.

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