Malta’s financial services industry has grown very rapidly in the past years and it reached a 12 per cent total contribution to the GDP in 2015. Asset management firms, trust and fiduciary business and corporate services have been the top drivers in the sector, with the audit and advisory industry increasing their international client portfolio at an unprecedented rate.
The financial services industry now employs over 10,000 full-time staff and if you read the press or speak with any business locally, you will hear: “We cannot find the right staff”.
The MFSA conducted a skills survey in 2015 and it showed that 70 per cent of respondents struggle to fill their vacancies, with the strongest pressure points being in finance, compliance and IT.
But why is there a skills gap? If we look at University graduates in accounting, for example, year on year there are an average of 200 graduates, but the market is still struggling.
Is it truly because there aren’t enough professionals in the market? Or is it because internal skills gap audits are not being taken into consideration by businesses?
A market skills gap is exterior whereas a skills gap audit is internal. So why is it more important to look at the internal side rather than the exterior?
In today’s world, businesses are facing ever increasing and disruptive competition. The consumer pattern in today’s world is dictated by millennials.
This new consumer trend, which is rapidly expanding throughout the globe, is becoming the predominant force in the market place – the ageing population (generation X) has a decreasing buying power and their market place is taken over by the millennials who have a growing buying power. But the buying behaviour of millennials has proven quite different to the one of generation X. “[...] companies need to be present and connect with their consumers […] in ways they hadn’t before” (Drucker Mann, 2015).
The main buying triggers of millennials are the business to be available 24/7, to support causes and to have personality vs the main buying trigger of generation X: the business to resolve conflicts with products quickly, have a heritage and to resolve conflicts sufficiently (Barton, Koslow, and Beauchamp, 2014).
This shift in buying factors has forced the world of business to reinvent itself through the eyes of the new consumers. Businesses realised that in order to remain relevant in the long-term they must re-adapt their products/services to a new market demographic and dynamic which is almost completely different to the one that existed before the millennial generation.
The results that businesses achieved in the past have been accomplished through an understanding of the market dynamics, consumer profiling and trend anticipation and management. These results were driven by the business’s employees, who utilised their skills in the service of the business, thus allowing the business to reach its objectives.
In today’s world, with the changing markets and consumer patters, skills that were pertinent and absolutely crucial in driving the business to success in the past, have also changed. Some became obsolete due to technological advancements, other have gone through complete transformations (such as social media advertising) and others have shifted towards more refined and solution-oriented patterns designed to troubleshoot and decrease organisational and market risk (management accounting, alpha value in fund management, regulatory measures, etc.).
In order for a business to serve its market, which will dictate its ability to make profit, it must adopt new skills, new business models that serve the current and future demands of their market segment.
In the light of the above change in consumer trends, in today’s world, a skills gap analysis is imperative for a business in order to understand whether its skills set are moving along with the demands and trends and whether the skills development is sufficient enough to keep abreast with the changes, and why not, actually disrupt the market by anticipating future trends and acting upon it quicker than their competitors.
In today’s world, a skills gap analysis is imperative for a business
To achieve success in the market place, a business must ensure that their employees are well equipped to face challenges and that the business harnesses top talent that can help them move forward and shift market dynamics.
When conducting a skills gap analysis, businesses are able to identify the necessary skills that their employees need to achieve the results expected. Each employee has a well-defined contribution in the organisation and each contribution is composed of a particular skill set that is necessary to achieve success.
However, since markets are moving constantly and they are affected by new entrants in the market, technological advancements, and product/service substitutes, a business must continuously monitor the skills of its employees to ensure they do not become obsolete or insufficient in the changing market conditions.
More often than not, by performing a skills gap analysis in their organisation, businesses find certain areas in employees that can be improved in order to maximise current results and they also become aware of the degree of advancement of their employee’s skills, based on patterns they would identify (either by comparing current vs past results or current results vs competitor results), allowing them to fully understand whether the degree of advancement is rapid and sufficient enough to keep up with market dynamics and to satisfy the business’s future ambitions and plans.
Another important dimension to consider is that if an employee is not equipped with the necessary skills to perform its task, the business’s productivity and output quality will suffer, as well as resulting in employee burnout and disengagement. Since businesses operate on a specific or limited number of resources, a decrease in productivity or quality is a significant problem that will directly affect their bottom line.
When identifying the skills set of employees, a skills gap analysis will focus on two core areas:
• Critical skills: the skills that an employee must have in order to complete his task;
• Non-critical skills: the skills that allow an employee to complete the task quicker or more efficiently (such as utilising less resources).
By identifying and measuring these two core areas, businesses can assess their current limitations and prepare a plan that will help them improve the quality and speed at which they provide the service/product, thus allowing them to maximise the market at a deeper and faster level than their competitors.
By combining management and market analysis intelligence and trend anticipation with a skills gap analysis, businesses can effectively prepare their employees for new challenges, thus shortening the time span between change and implementation, which will result in the business achieving its objective faster and establish itself in the chosen market segment more thoroughly.
Key areas to consider in a skills gap audit:
• Business dynamics: understanding the business vision, objectives and company organogram.
• Employee dynamics: understanding of the recruitment procedure, including selection and interviewing methodology, on boarding process, employee and training evaluation methods, training (internal and external) and staff retention rate
• Customer profiling: customer targeting tools and profiling, client impact assessments
• Communication: interdepartmental and partners-managers-supervisors-staff communication
• Skills profiling: technical and soft skills required to maintain competitive advantage
By assessing internal skills gap and having a thorough strategy to reduce gaps and maximise positives, this will create better performance of employees and an increased positive market perception of the industry itself, thus attracting future professionals towards the particular sector, and it will reduce the cost-push inflation created by a wage inflation due to ad hoc practices.
Francina Moisa is director of Nicholls Moisa, a boutique headhunting and recruitment business focusing on the financial services sector in Malta. For further information e-mail fran@nichollsmoisa.com.