Skills shortages changing CEO talent strategies

Increasing concern over skills shortages are forcing CEOs to rethink their hiring and talent strategies, according to PwC's annual global CEO survey.

Globally, 73% of the 1,300 CEOs interviewed by the professional services firm for the report People strategy for the digital age ranked skills shortages as the biggest threat to their business. This is an increase of 10 percentage points compared to 2014, and is up from 46% six years ago.

A further 81% of CEOs said they were looking for a broader range of skills when hiring than in the past and 78% said they "always" used multiple channels when hiring, such as social media. 

The problem of finding suitably skilled workers means that organisations are changing their staffing models, the report found. A third (33%) of CEOs said they are increasingly using contingent workers, part-time employees, outsourcing and service agreements to plug talent gaps.

And 40% said they are collaborating with a wide range of external organisations to fulfil talent needs, including sharing talent with other companies.

Finding talent is also a driver of M&A activity, with more than a quarter of CEOs saying access to top talent is the main reason for collaborating with other organisations.

CEOs are looking wider for talent, with 71% saying they actively search for talent in different geographies, industries or demographic segments. 

Six in 10 (60%) CEOs feel the government should play a bigger role and said that creating a skilled and adaptable workforce should be a top priority for government. This is an increase of 19 percentage points compared to 2014. 

PwC’s global people and organisation practice leader Jon Andrews said the rise of digital had “transformed the skills shortage from a nagging worry for CEOs into something more challenging”.

“Businesses are faced with a complex and shifting world where technology is driving huge changes,” he said. “They desperately need people with strong technology skills that are adaptable and can work across different industries, but these people are hard to find and they can afford to charge a premium for their skills.”

He urged organisations to make better use of data in recruitment strategies. “Organisations can no longer continue to recruit people as they’ve always done – they need to be looking in new places, geographies and from new pools of talent,” he said.

“Businesses also need to make use of data to understand exactly what skills they need, and where they will need them, to focus their future hiring efforts.”

In the UK, 84% of CEOs said availability of key skills is a threat to their organisation’s growth prospects. CEOs in Japan (93%), South Africa (93%), China (90%) and Hong Kong (85%) are the most concerned.

The research also found CEOs are focusing more on training, with 81% of those surveyed saying their organisation continuously equips employees with new skills and 75% believing implementing hiring and training strategies to integrate digital throughout the enterprise is important. 

On diversity, 85% of those with a diversity strategy in place said it had had a positive impact on business performance and 90% said it had helped their business attract talent. However, three in 10 (30%) CEOs globally said their organisation did not have a D&I strategy