Skills gap is hindering growth for businesses – PwC report

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2 May 2013 - Business leaders are calling for government to prioritise initiatives that help foster a skilled workforce, as more than half of CEOs around the world (58%) say a lack of key skills is hampering their growth prospects.

A global PwC survey of over 1,300 CEOs reveals that business leaders see the availability of key skills as the second biggest threat to their business growth, just after the increasing tax burden (63%). CEOs in Africa (82%), the Middle East (69%) and Asia-Pacific (64%) are the most concerned about the lack of key skills.

The research shows businesses are looking to government to help them plug this skills gap. More than half of CEOs (57%) said that creating and encouraging a skilled workforce should be the government’s highest priority for business for the year ahead.

This is an area where government could do much better, according to the CEOs surveyed. Only 15% believe their government has been effective in creating a skilled workforce up to now.

Tackling the talent challenge is also an area on which CEOs plan to focus, with 61% planning to increase investment in their workforce over the next three years.

The research reveals that mining, energy, and engineering and construction companies report the most chronic shortage of skilled employees.

Michael Rendell, Global Head of PwC’s Human Resource Services, said:

“Businesses are struggling with a widening mismatch between the skills of their workforce and the skills they need to achieve strong growth. There needs to be a joint approach to addressing the problem, with businesses and governments working together to plug the skills gap.

“At a time when growth is top of all businesses’ agendas, investment in employee training and development should be a key priority for CEOs for the year ahead.”

The research reveals businesses are planning to hire this year, with more businesses planning to increase their headcount (45%) than make cuts (23%). 28% of CEOs expect their headcount to remain relatively static.

Michael Rendell, Global Head of PwC’s Human Resource Services, said:

“Despite the difficult economic backdrop, it is encouraging that businesses are continuing to hire. While headcount has been an obvious target for cost cutting in the past, many business leaders are finding smarter ways to strip costs out of their business which won’t damage their employees’ engagement and leave them with talent shortages in the future.

“The most successful companies will combine recruitment with developing the people they already have. Those with a balanced approach to growing their own talent and buying in key skills are most likely to succeed."

Among the other findings of the research:

  • 77% of CEOs plan to make changes to their strategies for managing talent in the next 12 months, with CEOs in Brazil (93%), Korea (90%) and South Africa (89%) leading the way, versus CEOs in Central and East Europe (59%)
  • 61% of CEOs worldwide are looking to global mobility to help develop their leadership pipeline, with more CEOs in Western Europe (67%) seeing this as an effective way to develop their future leaders than CEOs in North America (54%).

ENDS

Notes to editors:

  1. The results are based on 1,330 interviews with CEOs in 68 countries for PwC’s 16th Annual Global CEO survey.
  2. The full report, with methodology and findings by region, can be found at www.pwc.com/talentchallenge.
  3. PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com.