A lack of qualified employees and the increasing demand for new and specialised skills is a problem in Slovakia and globally. In response, companies are increasingly prioritising employees' skills over their work credentials and work history. Skills, in this context, are distinct activities that, in specific combinations, form the competencies needed to perform work tasks. Focusing on skills is therefore crucial for acquiring new talent, and for retaining and developing current employees. Hence, businesses that invest in skills development will have a competitive advantage and will be ready for future challenges.
Solving the labour shortage - Germany
Germany currently faces extensive labour shortages - the number of unfilled jobs increased from approximately 320,000 in 2009 to 850,000 in March 2022.(1) The German Chamber of Commerce and Industry (DIHK) reports that half of German companies have problems with filling vacant positions, which reflects a very critical situation as regards qualified labour.(2) The urgency of transformation can be seen in the automotive industry. A study by the ifo Institute warns of the potential loss of 100,000 jobs by 2025 if the transition to electric vehicles is not accelerated.(3) Such transitions will definitely require a major retraining of employees, which will only be successful if German companies focus on skill development.
Why focus on skills?
The urgency of transformation does not only apply in the automotive industry. PwC's 26th Annual Global CEO Survey (PwC CEO Survey) provides a striking insight: a third of employees believe their companies will not be economically viable in ten years if they continue to operate as they are now. This opinion is shared by 39% of CEOs.(3)
Companies also state that 44% of the basic skills of their employees will change over the next five years (4), an opinion shared by employees, 53% of whom recognize the need for specialised training.(3) This fact emphasises the growing need for companies to transform into organisations that focus on skills to remain competitive and sustainable.
Transformation to a skill-based organisation
While the PwC CEO survey shows that most CEOs are considering pay increases to attract and retain people, PwC recommends taking a strategic approach that takes into account the individuality of their employees' needs.(5) Key steps that can help with this strategy, are:
● Identification of current and future skills needs
● Formulation of skill needs in job descriptions
● Development and delivery of skill-based training programs
● Support lifelong learning and access to skill-based learning
● Create skills-based pathways for development and redeployment
It is encouraging to see that Slovak companies are trying to attract and retain qualified people and are looking for ways to take into account the needs of individual employees. This should lead to longer-term success and sustainability of their businesses.
Advantages of a skills-based approach
Businesses that focus on skills are 63% more likely to achieve key business outcomes, such as meeting financial goals by increased productivity. This also promotes talent mobility, with a potential net gain of 9 million jobs by 2030 in sustainable energy, as workers move into new industries with transferable skills.(6)
A skills-based approach also promotes diversity, equality, and inclusion by focusing on skills and potential rather than formal qualifications. This approach reduces recruitment bias, supports a more diverse and innovative workforce, and strengthens a sustainable approach to education.
1 World Economic Forum, 2022
2 Reuters, 2023
3 PwC, 2023
4 World Economic Forum, 2023
5 PwC, 2023
6 World Economic Forum in collaboration with PwC, 2023
PricewaterhouseCoopers Tax k.s.
PwC Slovakia is the largest consulting company in Slovakia
With offices in 152 countries and more than 328 000 people, we are among the leading professional services networks in the world.
We help organisations and individuals create the value they are looking for, by delivering quality in Assurance, Tax and Advisory services. We draw on our extensive knowledge of business and business processes from our financial, process and IT experts as a single team. Therefore we can design and implement tailored digital solutions to streamline your business and your processes.
