Skills Gap:
Rethinking Wor
Investment
Bridging the
Changes in the workforce are
transforming how businesses operate. Yet
the initiative for employers to invest in
their staff is low, resulting in a depletion
of qualified labour and a widening skills
gap.
To stay relevant in a labour market that is and will be disrupted
by technology, workers must continuously develop their
capabilities. We have identified three alternative models to help
companies rethink how they invest in re/upskilling and how they
treat it during the accounting process.
There is a pressing need for businesses, and employees
themselves, to invest in the internal creation of new skillsets.
The idea that a school or tertiary qualification, together with
some informal on-the-job training, will provide an individual with
the skills they need for a lifetime of employment has become
obsolete. To stay relevant in a labour market that is being and
will be disrupted by technology, workers must continuously
develop their capabilities – just as, to thrive in an uncertain
economy, employers need a steady supply of trained, productive
and multi-skilled workers.
Challenging Assumptions
A logical suggestion might be that businesses and their
employees help each other here. Through effective reskilling and
upskilling, employers can construct their own talent base while
giving their staff the capabilities they need to keep their jobs for
longer. There is currently a temptation, however, for employers
to lay off workers who do not have the required skillsets and
replace them with new recruits who have those skillsets already
in place.
Moreover, younger employees often have a very different
perception of their career prospects, away from the
traditional view of developing a role with one company over a
working lifetime. Company culture also typically discourages
interdepartmental “poaching”, meaning that employees must
look outside the business for new opportunities. Companies
cannot therefore assume that employees will stay for the longterm
and, concerned that newly trained employees might leave,
do not see retraining as risk-free. From a short-term financial
perspective, many treat re/upskilling as a sunk cost, rather than
a long-term investment in value creation. Owing to the way
severance payments are reported, it can seem preferable on a
tactical level to make redundancies instead.