A significant majority of talent managers in Europe, nearly 60 percent, are grappling with the challenge of young employees leaving their jobs and the difficulty of finding adequately skilled replacements, according to the 2023 Global State of Upskilling and Reskilling Report by the educational platform 360Learning.
The report, which surveyed 3,600 talent managers, Learning and Development (L&D) professionals, and learners in the UK, US, France, and Germany, sheds light on the critical issues surrounding the current skills crisis.
The study reveals that the high turnover of young professionals and the inability to hire talent with the right experience and expertise are posing substantial hurdles to addressing the skills shortage, presenting a ticking time bomb that transcends generational divides.
Additionally, 38 percent of respondents from the UK, France, Germany, and the US cited the knowledge gap created by retiring older employees as a significant challenge. In the UK, this issue was especially pronounced, with 48 percent of talent managers identifying it as their primary obstacle.
Difficulty in finding hew hires
In both France and the US, the main concern was the difficulty in finding new hires with the requisite competencies, with the baby boomer issue ranking as the second most substantial challenge in France and the youth problem in the US.
The data highlights that these problems are further exacerbated by companies struggling to upskill and reskill their workforce quickly enough to bridge the knowledge and skills gap created by departing employees.
In the UK, the loss of knowledge from retiring staff was considered more impactful than the monetary costs of replacement. In the US and France, significant staff turnover was found to demotivate those remaining, while in Germany, the cost and delay in filling vacancies created by staff turnover were the primary concerns of managers.
Moreover, employees who cannot see a clear career progression within their organisation are more inclined to seek opportunities externally, thus exacerbating the skills crisis.
The report also revealed that in the United States, talent managers faced difficulties in managing the transfer of knowledge between experienced and new team members when replacing staff. In Germany, the rapid pace of technological innovation was depleting skills, while in France, understanding the most in-demand skills represented a significant hurdle for talent managers.
How can businesses overcome these challenges?
In response to these challenges, many businesses are shifting their hiring practices. While external hiring has historically been the primary focus, there is a growing trend toward internal hiring, with the goal of reducing costs and time investments while harnessing proprietary skills among current employees. Across all surveyed countries, a quarter of talent teams prioritise internal hiring over external recruitment. In the UK, US, and Germany, talent teams are split evenly between internal and external hiring, while there is a slight preference for external hiring in France.
Nevertheless, there is still room for improvement, as nearly two-thirds of respondents described their organisation’s upskilling efforts as inadequate. Additionally, over half (58%) expressed concerns about the sharing of knowledge between more experienced colleagues during internal transitions, describing it as “well-meaning but full of gaps.”
The study also suggests that greater involvement of L&D teams in mapping skills to job roles and implementing upskilling and reskilling strategies is needed. Only in the UK do half of the respondents believe that L&D teams play a significant role in these activities, whereas, in Germany, the figure is 34 percent, in the US, it’s 36 percent, and in France, it’s 37 percent.
Research by LinkedIn has indicated that employees are more likely to stay at companies that invest in their long-term learning, emphasising the positive impact of implementing upskilling and reskilling initiatives on workforces.
David James, Chief Learning Officer at 360Learning, emphasised the urgency of the skills crisis, stating, “The demand for talent is far outstripping supply, necessitating a culture of continuous learning and the provision of tools and opportunities for teams to advance their skills. By doing so, companies can create resilient and adaptable workforces without resorting to lengthy and expensive hiring processes.”
Amelia Brand is the Editor for HRreview. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.