The gap
Peter Thomas, director of FORWARD — The RMIT Centre for Future Skills and Workforce Transformation — writing with development partners Pete Cohen, Courtney Guilliatt, Sally McNamara, Inder Singh and Kate Spencer about skills gaps and what we might do about them.
The alarm about skills gaps — the inability to find suitably skilled workers to fill roles — is sounding right now.
Take, for example, the education, health and care sectors which currently represent a large proportion of the global workforce — for advanced economies, almost one quarter.
In the face of a global population expected to swell to 8.5 billion by 2030, not only will we need to fill existing gaps in the workforce, but also build capacity for the future — whether this is more healthcare workers to care for an ageing population; and (despite the increasing use of technology in the classroom) more teachers — perhaps as many as another 69 million; or more childcare workers — the carers of nearly 350 million children below primary school age do not have adequate access to childcare services.
In digital skills areas like cybersecurity or cloud computing, the alarm is sounding pretty loudly, too. Still, in any sector with technology as its backbone — which now includes almost every sector — there is a widening skills gap.
Industries like healthcare, for example, may find it particularly hard to recruit more workers because the vast majority of healthcare jobs will have technology, data and analytics components: even frontline staff in the healthcare industry need 'composite skillsets' — a mix of often diverse skills — in this case, the ability to be fluent in handing data alongside exercising patient care skills.
The increasing need for these composite skillsets is, in fact, one of the causes of skills gaps. It's pretty hard to recruit the ideal candidate if what you are looking for requires — and genuinely requires, not just here's a wish list that half a dozen people came up with, so let's see who we get, and Salesforce skills would be a bonus — a wide range of skills.
Very few roles now have the sort of vocational awe or single focus of the heart surgeon or the human rights lawyer — and even these roles need a more complex set of skills, most of which are new and most of which are digital. An oncology consultant I spoke to estimated that his use of technology was up by 300% — and that's technology that is critical to get the work done, not just to get the printer to work or send an email. And because technology is often poorly supported and there is little training on how to use it, he needs a whole other set of problem-solving skills.
Most jobs are becoming like this: they require many and more diverse skills — a trend that the arrival of Slack, Teams, Zoom and back in the day, the humble word processor has accelerated.
Alongside discussion about skills gaps is talk about solutions.
These usually involve either expanding the provision of training and (for Australia at least) increasing migration to allow access to a pipeline of skills more readily available elsewhere in the world: alongside last year's Australian job vacancies of around 400,000, Australia had negative migration, according to NAB CEO Ross McEwan speaking at the AFR Banking Summit in May 2022.
According to the OECD, Australia is experiencing the second most severe labour shortage in the developed world.
It has led to calls by COSBA (The Council of Small Business Organisations), amongst others, for an overhaul of the skills and training sector and a migration program that meets the needs of businesses. According to this Sydney Morning Herald story, in sectors like aged care, where there are "tens of thousands" of vacancies, government aims to address "genuine and persistent skill shortages in the industry" through migration.
Undoubtedly providing more, better and more accessible and inclusive access to skills training, delivered by a more efficient, needs-focused, industry-relevant training sector, is a good thing — and not just to close the skills gap but to enable more people to participate in meaningful work and so enrich our communities and society.
But maybe there are some other issues we must face when considering skills gaps and what we should do about them.
Issues that, if we look hard at what they might mean, suggest that we won't eliminate skills gaps — the acceleration of automation and digitalisation will mean that skills will always lag behind industry needs — but lessen the impacts of the cyclical nature of skills needs and the constantly shifting shape of the labour market.
Here are some of them.
Learning from startups
One might feel that in a labour market where the number of openings far exceeds the number of suitably skilled candidates available, it's particularly tough for startups and other smaller or newer businesses to attract skilled talent.
But arguably, younger businesses have an advantage: they started up, and have only ever existed in, a tight labour market.
It has meant these businesses have had to be fast, responsive, strip away the red tape, seek out the unconventional candidate, flex job descriptions creatively and, crucially, be in the skills training business themselves — hiring talented people and rapidly upskilling them so that they hit the ground running. These businesses, which have yet to accumulate the bureaucratic drag of scale, also have the advantage of not being saddled with legacy HR systems that are slow, if not impossible, to flex.
Instead, they use one or more of the hundreds of AI-enabled, data-centric, chatbot front-ended and virtual people tools flooding onto the market. Job seekers, too, are eschewing the traditional venues: younger workers find opportunities not through job boards but through communities such as Ripple, where alongside traditional jobs, they can find 'impact opportunities' from community organisations and not-for-profits.
Long before the pandemic, one of my colleagues, the CEO of a rapidly-scaling software business, said:
“We used to get CVs from Oxbridge graduates but we learned that it wasn’t really important to us where they got their degree. Now we get CVs from people with degrees and now that isn’t really important either. What matters is attitude and ability to learn fast and contribute. The training we do relates directly to the jobs our people do, and especially to being onsite with our customers.”
At an industry dinner with this CEO and his colleagues, I talked to one of his people with no degree and another with a PhD in theology. And this is a software business — but one that hires for potential and promise, not a list of past achievements and qualifications.
Large legacy businesses are much less likely to do these things. Instead, they cling to the idea that it's take it or leave it, our job description or the highway when it comes to hiring. Candidates come through the door with a list of what they have done (usually in the form of the traditional CV full of qualifications and roles) and are matched, or not, with what the position description says. But of course, given that most candidates have more than one job offer (and often more than one job), that probably isn't going to be a successful strategy for these businesses.
The skills gap then is not just about a lack of suitably skilled people but an inability to connect meaningfully and effectively with those who are suitably skilled, regardless of what a CV or a position description says (and somewhat more confrontingly, what a hiring manager thinks).
The lesson here is that it's really about what you think 'a job' is. And, correspondingly, what you think a 'skill' is.
The great unbundling and rebundling
Of the many things that the COVID-19 pandemic has done to us — not least the still-raging argument about hybrid work (see Elon Musk's recent directive that everyone should be in the office) — is to make us all aware of the need to flex.
And that applies to organisations rethinking how they do leadership in a world of hybrid work to the many accommodations we have made in pursuing our own ways of working that work. Skills gaps are evidence that organisations aren't bending enough to match the demand curve of employees seeking different things and having characteristics that don't meet what organisations perceive as matching their current needs.
The basic architecture of jobs, skills and roles — along with definitions of 'empowered' and 'high performance' — will have to shift if companies, and entire industries, want to build sustainable, resilient and future-proofed workforces. Transformation is everywhere.
We are starting to realise that this architecture should be based on skills, not roles. According to Ravin Jesuthasan and John W. Boudreau, writing in the Sloan Management Review, a skills-based approach "increases the efficiency, responsiveness, inclusiveness, and transparency of the labour market by replacing the traditional one-to-one relationship between a person and a job with many-to-many relationships between skills and tasks."
The way to achieve this is to deconstruct, or unbundle, roles and rebundle them as collections of skills. Just as we are unbundling work from traditional employment and employers — through gig-economy work or portfolio careers performed by independent creators, freelancers, and other contingent workers — we can unbundle traditional jobs and put them back together as a collection of skills.
As Jesuthasan and Boudreau say, the practical implication of this is that organisations shouldn't ask, "Is this worker fully qualified for this job?" but instead ask, "What tasks are bundled together into this job, which workers are qualified to perform which of those tasks, and how could the tasks be unbundled and reconstructed?" Each worker then becomes an array of capabilities and skills rather than a degree or job holder.
In a deconstructed, unbundled world, the approach to hiring then becomes skills-based. Organisations recruit for the skills needed — and it doesn't matter whether that person is from your organisation, outside it, or on what basis they work with the organisation.
Instead of asking, for example, "How do we find or build talent with the skills that fit with future automation?" (a supply-side view), organisations might ask, "How do we rebuild the work to optimise the combination of humans doing some tasks while automation does others?" (a demand-side view). As Jesuthasan and Boudreau say, "reframing the question creates more options for making work more attractive and solving prominent dilemmas such as labour shortages and resignations."
This unbundling approach can provide another way — beyond retraining and migration — to address skills gaps. Unbundling provides options, for example satisfying short-term objectives through knowledge gigs or the opposite — leveraging long-term engagement through intentional knowledge ecosystems — as we at FORWARD are doing through our industry fellowship programme.
Of course, some platforms support this unbundling: the problem is that most organisations are stuck with legacy systems that don't permit the flexibility that these platforms provide. People can earn a living as a writer through Substack or as a content creator through YouTube because the platforms give them the tools without the need for any employee-employer relationship. Whether the platform is horizontal (across industries) or vertical (focused on a specific industry), it provides a bundle of services, many of which remove barriers to entry, unlocking economic value.
So perhaps the unbundling of skills from jobs and people from organisations can solve some of the skills gaps we are experiencing. Maybe if organisations became like platforms, we might see a better fit between people and work; and perhaps if platforms started to become more like organisations, we might see a better fit between skills and needs. Of course, some platforms are beginning to do this — for example, on Substack, newsletter authors are self-organising into bundles of subscriptions, and some are hiring entire teams to professionalise their content. All at a lower cost structure and without the processes characteristic of traditional organisations.
Imagination and creativity
We are realising that there's more to skills than the technical. We've written about this before when thinking about change resilience skills — the ability to deal with the stresses that change inevitably creates.
But maybe there is even more to skills and the skills gap than even these durable, power, or resilience skills.
Organisations like the World Economic Forum have been looking at this topic. They argue that while automation was previously seen as a threat to jobs, it seems that it's creating new job opportunities and new skills niches. Traditional training programmes, especially those offered by universities, haven't prepared graduates for the skills they will need in the workforce.
To future-proof workforces and lessen the incidence and severity of skills gaps, perhaps we need to look beyond tangible skills (role or job-based skills) and beyond intangible skills (soft, human, power or durable skills) and explore skills that — at least on the traditional view — seem more ill-defined, possibly innate and less readily teachable.
Perhaps the most interesting of these is imagination.
There's no doubt that imagination is a powerful skill, although you'd be hard-pressed to define it precisely — you know it when you see it. Imagination has been useful to us as a species. It was likely selected for in evolution because it conferred some survival advantage, not least of which is to come up with possible futures, scenarios, walkthroughs, and mental rehearsals that help us figure out what might happen in the future. Imagining the future is to prepare for it, whether you are playing wargames or planning your perfect garden.
As this expansive article by Stephen T. Asma argues, imagination is a cognitively demanding skill and works because we can routinise many of the other skills we use every day. If you have ever found yourself imagining your ideal cruise around the Greek islands, down to the level of the colour of the umbrella in your frozen strawberry daiquiri, while driving to work, you will recognise how imagination is not just possible but flourishes while you are doing something else. Imagination is adaptive, and possibly more so in a challenging environment, where you need to continue business as usual and (in the hackneyed and inaccurate phrase) 'think out of the box'.
One of the problems in thinking about imagination as a skill is that it doesn't fit neatly into the rational/emotional distinction we are used to. Just like 'hard' job-related skills are 'logical', and 'soft' human or durable skills are 'emotional', we have the distinction between STEM and the arts, which have been treated so far as separate.
It's more likely that imagination is a different category of thing — it's partly rational, partly irrational; cognitive but embodied; both action and reflection-oriented; partly intangible but situational; and may be antifragile — it flourishes in chaotic and unpredictable environments.
"Imagination is as imagination does", says Asma. It can work in involuntary mode, such as mind-wandering and dreaming, or in voluntary mode, when exercised in a range of solution-focused imaginative methodologies such as design thinking. Maybe, as Asma says, we need an "imaginology", an applied science of the imagination that encompasses art, creativity and other forms of cognitive processes. Imagination, he cautions, is not the same as the products of imagination — art, paintings, dance, music or anything else — but it is a process to be looked at in its own right.
In our work at FORWARD, we are also exploring creativity — not just in the sense of creative arts — as a distinctive skill and how it relates to human and technical skills. Research into creativity and 'the creative process' has been ubiquitous for decades. But 'creativity' has proved difficult to harness and nurture at scale within organisations, something especially true beyond the so-called 'Creative Industries'.
Yet 'creativity' is widely predicted to be one of the critical skills for the future of work. The World Economic Forum's Future of Jobs Report lists creativity, originality and initiative as the third most important skills for the future workforce. The forum's work on Education 4.0 lists several skills in the creativity space — such as collaborative problem-solving and innovation — which, if developed in the workforce, could add $2.54 trillion in productivity to the global economy.
Nesta, the UK's innovation agency for social good, looked at creativity and the future of skills. They found that of 39 transferable skills they analysed, 'creativity' is "consistently the most significant predictor for an occupation's chance of growing, as a percentage of the workforce by the year 2030." They also found that alongside creativity, skills related to organisation and management were positively correlated with an occupation's probability of growth and are important complements to creativity, leaving creative jobs with even better prospects.
But there are critics. As Theodore Levitt, in 'Creativity is not enough' in Harvard Business Review, notes:
“Creativity” is not the miraculous road to business growth and affluence that is so abundantly claimed these days. And for the line manager, particularly, it may be more of a millstone than a milestone. Those who extol the liberating virtues of corporate creativity over the somnambulistic vices of corporate conformity may actually be giving advice that in the end will reduce the creative animation of business. This is because they tend to confuse the getting of ideas with their implementation — that is, confuse creativity in the abstract with practical innovation; not understand the operating executive’s day-to-day problems; and underestimate the intricate complexity of business organizations […] advocates have generally failed to distinguish between the relatively easy process of being creative in the abstract and the infinitely more difficult process of being innovationist in the concrete.”
This looks pretty removed from the kinds of skills we talk about in skills gaps.
But maybe not.
Constructing roles and jobs that allow, and maybe require, people to exercise their imaginative and creative capacities (and not just the 'you should be a creative problem-solver' beloved of most job ads), and seeking — and testing for — imaginative and creative capacity may be one solution to skills gaps.
This is because the exercise of imagination, defined as open-minded, exploratory, ambiguity-tolerant, inclusive, action-oriented thinking and behaviour, may well provide huge advantages in learning other skills, both hard and soft, at the right time for the right purpose — and doing so in a way which is generative of novel solutions that solve the kind of business problems which may as yet be far on the horizon.
If we accept the idea that imagination is a skill, the question remains can we teach it?
There is, of course, a rich thread of thinking in pedagogical circles that imagination can and should (and is, in fact, essential) to teach to children. Education systems have been increasingly recognising that the nourishing of imagination is a desirable goal, especially in The Nordics, where play is a serious business.
It's less clear that adults can be taught how to be imaginative. But approaches such as the Institute for The Future's Massively Multiplayer Forecasting Games (MMFGs) — along with evidence that games of all kinds, from first-person shooters to roles play games, increase our imaginative capabilities — suggest that imagination can be developed.
This is not an argument for having people sitting around playing Rainbow Six Siege (although one suspects that during lockdown, this was happening a lot) but an argument for making imagination a part of work by constructing roles around it, recruiting for it, making time for it in organisations and treating it as a valuable skill.
More than the now
The discussion of skills gaps tends to focus on a very narrow range of people who can be upskilled or reskilled to bridge them. The discussion fails to realise that there are a whole group of people who may be able to help us.
People are living longer. If life expectancy grows as it has for the last few decades, 100-year lifespans will be the norm. And what comes with that lifespan is 'multistage lives' that are very different from the school-university-work-retire pattern that has been characteristic of the last century, certainly in Western developed economies. Increasingly people will learn, work, volunteer, learn, semi-retire, sabbatical, work for one employer for a while, and then many at the same time, semi-retire and learn — all curated and organised by individuals themselves.
And, aside from studying Ikebana or narrow gauge model railroads for the fun of it, it's likely that the sheer range of skills — both human and technical — that individuals will acquire and exercise in a range of types of employment settings will be highly valuable in volatile job markets.
People with multistage lives will be able to deploy their skills faster when there are critical skills gaps and learn new in-demand skills much more quickly — after all, they have spent a lifetime doing it. Accredited skills will be valuable, but those with hard evidence of deployment in many settings will be the most valuable of all. These people are — in the language of bildung, the Nordic approach to inner development we are exploring at FORWARD — people who 'self-author' and 'self-transform'.
This is not in the future: research suggests that over three-quarters of employees are investing their own time and money in upskilling — spending nearly 7 hours each month and thousands of dollars each year. And in Australia, as recent data suggests, students who choose more expensive humanities degrees rather than STEM courses are driven by personal interest and employment prospects, not just fees.
As Lynda Gratton and Andrew Scott say in their exploration of multistage lives:
“The capacity for individuals to transform will become an ever more valuable asset as employees work longer and make more transitions in their careers. Those most likely to make successful transitions will be those with self-insight and with diverse networks that provide alternative experiences and role models. There is much that organizations can do to support this — such as encouraging employees to regularly reexamine their own goals and skills, and helping them develop dynamic and diverse networks.”
This means that organisations, and entire industries, may be able to address skills gaps not by post hoc reskilling or migration but by continual overinvestment in people's 'transformational assets' — self-knowledge and networks that support personal change and transitions. And as governments slow the economy to control rapid inflation, as is now happening in Australia and the US, it may be that those who continue to learn will be in a better position. As this story in the NYTimes says, when talking about students' decisions to work rather than study, "an incomplete education will come back to haunt these students."
This approach runs counter to how organisations currently see people, skills and jobs. "Why train someone if they are just going to leave?" the conventional narrative goes. "They'll just work for our competitors." Leaving is disloyal, and the departed are gone forever.
And the counter-response? "Train them to leave — then they will come back, but in a possibly different role and relationship to you, with a set of skills and experiences that are much more valuable because they used them at your competitors." And maybe this is starting. 'Boomerang employees' are on the rise: according to LinkedIn, 4.5 per cent of new recruits on its platform were boomerangs last year, compared with 3.9 per cent in 2019. Perhaps the departed are starting to be treated as valuable alumni, not defectors, and seen as an opportunity for the organisation, not a betrayal of it.
In the past, and maybe still, too many short-term roles in too short a time, and too many gaps in your CV for too long, was enough to get you dinged from the recruiter's shortlist or at least prompt questions at interview time. But maybe that's starting to end too, and skills gaps can be solved by focusing on more than the now — and instead on how the past can transform the future.
As we said at the top of this story, the increasing need for 'composite skillsets' — along with the inability of large legacy businesses to flex, coupled with the acceleration of automation and digitalisation that means that skills will always lag behind industry needs — suggests that skills gaps will always exist.
But alongside the traditional solutions of expanding the provision of training and increasing migration, perhaps learning from startups, unbundling and rebundling, skills-based hiring, fostering imagination as a skill, focusing on more than the now and developing creativity as a skill, may help close them.
FORWARD is the RMIT Centre for Future Skills and Workforce Transformation.
Our role is to build an innovative learning ecosystem at scale, create new collaborative applied research and invent next-generation skills solutions that will catalyse workforce development in the future-oriented industries crucial to Victoria's economic renewal.
We lead collaborative applied research on future skills and workforce transformation from within RMIT's College of Vocational Education, building and scaling the evidence and practice base to support Victorian workforce planning and delivery and acting as a test lab for future skills to develop and pilot new approaches to skills training and education through digital transformation and pedagogical innovation.
We leverage RMIT's multi-sector advantage to translate research insights into identifying workforce requirements and the co-design of practice-based approaches with industry.
Contact us at forward@rmit.edu.au
