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07.12.07
How To Combat The Worldwide Skills Shortage
 By Sam Polniak
Introduction
In the past decade, we have experienced a steady erosion of skills amongst people working in various industries, professions and businesses. This includes many large industries like chemicals, petrochemicals, oil refining and the like. This is a very provocative statement which will, no doubt be hotly contested by some people, but nevertheless it is true, like it or not. This is the reason why one often hears a cry amongst HR professionals, business leaders and management gurus of a "worldwide talent crunch". A side effect of this skill erosion has been an increase in salaries and benefits in many companies to those employees who have retained or enhanced their skills ( as contrasted with the pay cuts seen everywhere not so long ago), as well as concrete steps to stem attrition at all levels. This paper attempts to provide an insight into the issue as well as provide a solution for companies and businesses that are suffering from this problem.
History of the problem
The problem of the skills shortage can be directly attributed to three reasons. The first and primary reason is the "Downsizing " effect. The second reason is Demographics. The third reason is that not enough young workers are entering the workforce in some sectors. We will study these one by one and also attempt to provide a solution.
Downsize 'em all!
In the mid to late nineties, there was a wave of a new management fad that cut across all sectors, industries and professions. This fad was the concept of "downsizing" and "rightsizing". Coupled with its cousin of "outsourcing", it played a dominant role in creating todays' problem. Like many other temporary quick fixes, it only proved the old adage , that the solution to a problem can create a bigger problem.
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Until the nineties, typically employees in most companies, shared between them, a vast body of knowledge, that was the real driver of the growth and profitability of the business. This was never acknowledged or measured as such by top management seriously. Thus this "intellectual property" of the business was never cared for properly. Merely having a physical location (like an office or a factory) and machines (or plants or computers or other physical assets) and money in the bank, does not make a business. The business requires skilled people, in various functions, having diverse skills, to glue it all together. They co-ordinate the people and assets, use the money productively and thus create value. This key insight was lost on the swashbuckling managers and cost-focussed bean counters of the "cutting nineties" (a term similar to the swinging sixties, but more sinister), who looked askance at people, mocked them as mere "cost centers" and concentrated on cutting them out of the business.
No doubt that every business does acquire some flab and bureaucracy as it grows older, but this wave of downsizing threw out the baby along with the bathwater. This scored the managers of those days some brownie points and lifted the bottom lines of those companies during the recessionary times by some percentage points. Not to speak of the increase in their own bottom lines because of the bonuses and stock options. But then, when the economy picked up again, this downsizing process left the companies with gaping skills shortages. This left companies with little or no resources to again expand capacities, regain their market positions, introduce new products or even to take care of existing products.
This opportunity cost has been never seriously measured by any of the management gurus, to my knowledge.
Continue reading this aticle.
About the Author:
Sam Polniak works with Abhisam Software (http://www.abhisam.com), a provider of e-learning courses on various topics such as Hazardous Area Instrumentation (http://www.abhisam.com/hazareainst.html), Gas Monitors (http://www.abhisam.com/GasMon.html) and RFID (http://www.abhisam.com/rfidcourse1.html)
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