Over the last few years, high unemployment rates have masked a serious business problem: the lack of available talent and an inability to manage talent in key areas, including IT. According to a new study conducted by the Hackett Group, “Cracks in the Foundation: Closing the Critical Skills Gap Undermining Business Capabilities,” business leaders are now feeling the pinch. They are seeing “dangerous deficits in talent and skills, and are highly dissatisfied with the level of support they receive from HR on talent issues,” the report states.
“At most companies, business services functions were badly weakened by across-the-board cuts during the recent recession,” says Harry Osle, Hackett’s global HR practice leader. “Underinvestment in talent has created deficits in important skills such as business acumen, strategic thinking and analysis, change management, and process improvement capabilities.”
Unfortunately, companies are increasingly ineffective at addressing this talent challenge, in large part because human resources and business services leaders are not collaborating with other groups within the organization. “This is a dangerous situation” with the potential to cripple companies that don’t address the problem quickly, Osle adds. “While these business services functions are often considered cost centers, they provide key services that enable companies to manage and optimize assets ranging from cash, capital and talent to technology and product/service inputs.”
The problems center heavily on areas such as collaboration and knowledge sharing, which tie directly into IT capabilities. Less than one-fifth of organizations said their HR organizations are providing adequate levels of services or expertise. In other areas, including workforce planning, performance management, and learning and development, only 33 to 47 percent of all companies said they are able to provide adequate levels of services.
Even in the top-performing area, recruiting and staffing, more than 40 percent of all companies indicated that they are able to provide only limited services and expertise. In fact, a scant 13 percent are able to provide a full range of services for recruiting and staffing; 7 percent for performance management; and 5 percent or less for all other areas.
Although the Hackett Group places the blame squarely on the shoulders of HR, it’s also clear that in today’s highly intertwined organization the need to break down silos and collaborate on solutions is greater than ever. IT must play an active role in connecting various departments and systems.
There are no simple fixes. According to Michel Janssen, Hackett’s chief research officer, “Today’s changing business environment requires that business services organizations retool and radically change their mix of staff.”
Talent management is key, and business services must work with human resources departments to improve talent acquisition, as well as processes throughout the organization. These various groups, including IT, must “redouble their efforts to improve their working relationships,” he notes.
What’s more, business services managers must take the lead in specifying their needs and taking accountability for talent management results. Organizations require “comprehensive process and administrative support, methods and tools, training and guidance for function leaders,” Janssen concludes.