Dean Corbett, chief people officer at Avado, defined a capabilities gap as more deep-rooted than that of a skills gap, as it is an ability that is not easily taught.
Avado's research into how businesses have supported employee learning has found that those who invested in employee development before the pandemic performed better over the past year.
A significant number (71%) of businesses which saw growth over the last year had previously increased their training budget.
Around half (47%) had prioritised developing their marketing, innovation (45%), and adaptability (44%) capabilities.
Among businesses that saw a decline during 2020, 61% said they did not have a training strategy.
Mark Creighton, CEO of Avado, said there is an opportunity for employers to invest more in their people and to move the conversation beyond skills.
He said: “The businesses that remain competitive in our recovering economy will be those that embrace a strategic approach to the development of capabilities, not just answer the challenge through recruitment.
“We must take urgent action to implement training strategies fit for the future that give existing employees, not just new recruits, the opportunity to contribute to business success.”
More than two-thirds of senior HR (69%) and half of executive leaders (57%) surveyed agreed their organisation had prioritised survival over capabilities, and had spent their budget on quick-fix strategies that were not fit for purpose (46%).
Corbett said the skills gap in the UK has widened much further, becoming a capability chasm.
He told HR magazine: “While a skill is a specific ability to do a particular task, we have defined capabilities as going above and beyond skills.
“They represent a deep-rooted knowledge or ability that is not isolated and flows between different skills, for example, knowing how to use Excel to a good standard is a skill, but being data-driven is a capability.”
In the UK, nearly half (40%) of executive leaders and two-fifths (41%) of HR leaders admitted to using recruitment of new talent to fill capability gaps.
Corbett said it’s discouraging to see businesses have been recruiting to fix this problem, while they have been struggling or cutting learning and development budgets.
He said: “While recruitment can often seem like a quick fix, it isn’t. Hiring new staff can actually be more expensive for a business than investing in good quality learning, and it also doesn’t make staff feel invested in or secure in their role.”
Corbett said it’s vital that businesses invest in capabilities so that people’s talents are not limited to an individual or department but spread across the whole organisation.
Miatta Fahnbulleh, chief executive of the New Economics Foundation and ambassador for Avado’s research, said investment in capabilities matters more than ever to business growth and long-term productivity.
She said: “To succeed in a future of profound change, we need to think well beyond skills. In fact, we will need a capabilities revolution.”
Avado’s Beyond Skills report surveyed 1,000 respondents across UK organisations with over 5,000 employees.