July 01, 2014

| By Paul Oswald, President, ESI

View the original article posting.

Addressing The Skills Gap

It’s time we as industry begin to focus our efforts on investing in the people necessary to properly apply all the great technology we have in order to deliver quality solutions that provide real value to end users.

Inevitably conversations in our industry focus on technology; new or old, doesn’t matter, we like to talk about technology; even to the point where we lose sight of the other things that make our industry work.  The most important of these non-technology issues is the skills gap.

For most of the system integrators in this industry, they have only one asset – people.  Contractors may have trucks, tools and inventory, but their number one asset is people.  Let’s face it, integrators and contractors don’t manufacture anything, they typically don’t have any patents or licensable IP.  They have one primary asset and it goes home every night. 

Yet, how do we manage the number one asset?  What do we invest in it, how do we attract it, how do we retain it?  For most services firms, their real point of differentiation is their people, not the brand of product they represent or the geography they conduct business in.

We have an abundance of technology with more coming at us every day and yet we do little to equip our number one asset, our only asset in many cases, to deal with this technology effectively.  This leads to the industry facing a significant skills gap.  According to Forbes magazine, more than 70% of organizations cite “capability gaps” as one of their top five challenges, and many companies say that it takes 3-5 years to take a seasoned professional and make them fully productive.  This is an incredible statistic and one that as an industry is frequently overlooked.

And this skills gap exists in two key areas; within organizations such as system integrators and services firms who provide the technology and solutions, and the end users who use these solutions on a daily basis.  We are losing experienced building engineers and not replacing them or attracting younger talent to fill their roles.  The result is powerful technology being delivered and not enough skill to properly use it. 

With so much riding on our people, what are we doing to attract, retain, and develop them?  What are we doing to challenge them and keep them engaged so they continue to add value to their organizations and their customers?

The answer lies in how businesses manage their talent; how they invest in it.  It’s not enough to simply hire an engineer and provide them with basic factory training (a model that unfortunately happens all too frequently).  That’s training, which is not the same as learning and too often it becomes a one-time event.  

Businesses need to manage their investment in people as much or more as they manage their investment in technology, tools, business systems, etc..  To compete effectively in today’s market, they need to invest in developing a learning organization; one that promotes life-long learning and development and career development paths for its employees.

They need to ask questions such as:

  • What’s the average age of your talent pool?
  • Do your people have the right skills?
  • What’s your talent attraction strategy?  Do you have one?
  • What’s your talent retention strategy?

Firms engaged in the business of providing solutions in our industry should understand that the value they bring to their customers is proportional to the knowledge and skills of their people; not the brand of the products they represent.  And as history shows, if you’re not consistently adding value to your customers, you will be replaced.

At the recent IBCon Smart Building Integrator Summit, we had the opportunity to hear from several high-profile customers (end users) on what they look for in a systems integrator.  They were unanimous in their response that they not only wanted, but expected the integrator to bring them ideas and to not just respond to a request for services.  As an organization, if you’re not committed to continuous learning it will be very difficult to add this value; you may get lucky a few times but it won’t be consistent.

So what does it mean to be a learning organization?  According to the Maturity Model for Corporate Learning by John Bersin, learning in an organization typically matures over time and companies tend to evolve their training in four phases:

At Level 1, learning is incidental – there is no formal training at all. Managers and staff tend to coach each other to do their jobs more effectively.   As managers either tire of training people or find that their efforts are ineffective, they call in the professional trainers.

At Level 2, training is developed through a needs analysis model – trainers and HR staffs look at work functions and build competency-based programming designed to elevate performance. 

At Level 3, organizations realize that “learning” is more than training. Here companies bring all of their learning programs together (leadership development, technical training, compliance, etc.) and attempt to tie them to an overall talent strategy.  Over time companies realize that specialized skills take years to develop, so Level 3 companies build long-term career paths and continuous learning programs that enable employees to develop deeper and richer skills in their chosen profession. This level of learning requires an integrated effort on the part of L&D, HR, and team leaders using a well-defined employee development model.

Few organizations achieve Level 4 status. At this level, companies focus on organizational effectiveness over skills and job needs. Companies conduct “after-action reviews” after projects to force teams to take time and learn what went well. One of the most experienced “capability development” organizations in the world in the US military. All US military services use structured reviews to analyze what happened, why it happened, and how it can be done better by the participants and those responsible for the project or event.

Skills and capability development have risen to the top issue on the minds of talent, HR, and business leaders. Spending on corporate learning went up 11% last year as companies look to develop their capabilities and find ways to improve organizational effectiveness. The bottom line is this: corporate learning is not just a program to improve productivity and reduce errors. When managed well, it can be one of your most important sources of competitive advantage.

Like any investment, businesses may ask what’s my return.  Organizations with strong learning cultures outperform their competitors in several ways1:

  • Innovation.  They are 42% more likely to be first to foster ideation and implement change initiatives
  • Productivity.  Their employee productivity is 37% greater
  • Customer Service.  They’re 35% more responsive to customer’s needs
  • Quality.  Their ability to deliver quality products is 26% greater
  • Profitability.  They’re 17% more likely to be market share leaders

All things considered, when you look at these statistics and consider that the only real differentiator a services firm has is their people, the real question is how can you not be investing in this?  Based on this here are some questions to consider:

  • Do you have a learning and development plan for each employee?
  • How much do you spend annually ($) on learning and development?
  • How many hours per year/per employee do you allocate to learning and development?
  • What is your time to competency?
  • How much of your learning programs are devoted to non-technical, product-specific learning; i.e., soft skills, leadership development, problem solving, etc.?
  • Are your learning activities tied to your HR and performance management systems?

We have a very real skills gap in this industry and technology is not going to solve this problem.  It’s time we as industry begin to focus our efforts on investing in the people necessary to properly apply all the great technology we have in order to deliver quality solutions that provide real value to end users.

1 Bersin and Associates, 2013