Elite Business: Crack the skills crisis
In this article, originally featured in Elite Business, Pavlo explores the topic of the UK’s GBP6.6 billion skills gap, exacerbated by inflation and tech advances, demanding attention. To succeed, prioritise growth and talent. Build a resilient business model and hire system operators to navigate the skills crisis and pursue higher growth.
Skills are short globally. In the UK, the skills gap cost businesses an estimated GBP6.6 billion. The subsequent challenges of inflation, war in Europe, and the accelerated adoption of AI and other technologies can only have increased this.
This shortage of skills is not a problem if you don’t want to grow. There are two parts to this comment.
If you’re not growing, you’re dying because your competitors intend to, and in a low-growth environment, their growth will come from eating your lunch. Add inflation, and you are eroding the value you have built thus far. If you opt not to grow, look to exit and realise your value before it whittles away.
If you want to grow, there are two options. First, grow to maintain what you have. This pegs your annual growth rate at inflation, the tepid country growth rate, and your industry growth rate. It approximates 8% per annum. At this level, you are maintaining what you have. To grow beyond what you have, your growth rate should add another 5-10%, depending on your ambition.
In the instance of growth, you need a plan, and that plan needs two things. First, and most importantly, your time and attention to focus on growth. Next, a business model and team that allows your time and attention to focus on growth. Both mean you need to have a good team on board of the right people doing the right thing at the right time.
Across businesses I visit the following constraints regarding human talent become apparent.
- I need help finding the right people.
- I have people in senior roles who don’t have the skills or mindset to get the job done without my regular support and guidance.
- It takes ages for new employees to get up to speed and wash their faces.
- My “rock-star” employee is constantly toying with other opportunities.
The employment challenge is here to stay. Demographically, each year sees fewer people entering the workforce. Over 2.8m working people are sick, waiting for operations. About 500 000 able, capable 50 years and older, experienced people opted for early retirement.
If structure determines behaviour, build your business to accommodate the skills challenge.
A business does not just emerge. It is built against an operating model. Your operating model must sympathise with the challenges of growth, size, and shifts in the economy.
However, the bones of the operating model that will resolve many of your human capital challenges remain the same.
It begins with defining your business in terms of the customer segments you serve rather than the features and criteria of your products and services.
Understanding these segments, what problem you solve for them, and what experience they want in the process forms the blueprint of your operating model.
Using the blueprint, build the operating processes and systems to deliver that outcome reliably. Systems are sequential activities that bring the experience of the blueprint to life, and that can be taught and measured. Do this across all your commercial functions that comprise that customer experience blueprint. In each function, these activities make up a job description.
You can now hire people, not because they bring some of their superstar ability to the role, but because they can be evaluated and trained against the activities in their employed function.
Hiring system operators, rather than mavericks and gurus, has several benefits:
Recruitment is simplified as you can assess through simple questions whether someone has the experience or capability to perform the tasks that make up the system.
Your employees are motivated and have a purpose as they know what to do and when to do it, to achieve a specific outcome. Their performance can be measured and managed.
Your business becomes less reliant on you, as the systems that underpin it are documented, trainable, and don’t depend on a few superstars to get things done.
This unlocks your time to focus on next-level growth despite the skills crisis.