Talent shortage hampering digital transformation moves of firms

Published: 03.12.2019 Related countries:  China China

With the rapid transformation of almost everything into digital, the hunt for talent seems to be following in similar footsteps. In fact, the significant increase in the number of digital job opportunities has not been matched by an equivalent increase in talents.

With the rapid transformation of almost everything into digital, the hunt for talent seems to be following in similar footsteps.

In fact, the significant increase in the number of digital job opportunities has not been matched by an equivalent increase in talents.

 

"Probably 80 percent of Chinese enterprises are adopting the digital transformation concepts, while only 16 percent of the companies will finally succeed in the digital transformation process," said Nancy Wang, head of talent solutions of LinkedIn China.

 

Wang explained the biggest problem is the hiatus between the demand and the supply of digital talent.

"We found there are very few companies lacking strategies to hire more digital talent. The main reason is that companies cannot attract enough digital talents in the market. All firms are competing for the same small pool of leading talents, such as data scientists and algorithm engineers," Wang said.

In the past five years, professionals with data skills have increased nearly threefold, LinkedIn data showed. In 2019, 40 percent of the candidates listed data skills as a talent on the LinkedIn platform, compared with just 13 percent in 2015.

However, the gap between the demand and the supply of data talent is widening. LinkedIn noted in a recent report that demand for talents with data skills rose nearly sevenfold in the past five years. In 2019, 46 percent of the jobs required data skills, compared with 6 percent in 2015.

Today, digital technology impacts not only the IT sector, but a wider range of sectors, creating a huge demand for digital skills.

Among industries with the fastest growth for data skills, many are from the non-tech fields and even the traditional sectors, including real estate, finance, petroleum energy and human resources.

Notably, the supply of talent has not kept pace with the surge in demand since 2018. This year, the supply of data talents is sufficient for just 85 percent of the job market requirements.

Wang said the key is to find the right talent, adding that companies need to hire new talents and train the current employees to embrace digital transformation.

 

"During the process, companies need to have a better understanding of today's much-needed skills and then take actions accordingly, Wang said.

Another new report released by LinkedIn last month noted that there will be a shortfall of 12.3 million workers by 2020 in the Asia-Pacific region, leading to added costs of nearly US$4.2 trillion every year.

One of the reasons that is driving the labor shortage is the rapid change in skill needs, which requires employees to refresh their skills more frequently to cope with the fast-changing digital environment. By 2020, the essential skills for most jobs will see a significant change, the report said.

LinkedIn highlighted the top 10 emerging skills in the Chinese talent market, including compliance, cloud computing, data science, small languages, risk management, interaction design, artificial intelligence, blockchain, digital marketing and full stack development.

"Among these skills, many are those we had not heard of five years ago," Wang said. "But now there is a huge demand for them in the job market. Both digital companies and traditional companies are actively embracing the digital transformation, and they are looking for similar digital talents in the job market."

Wang believes when taking the first step toward digital transformation, the biggest obstacle is the lack of talents rather than technologies or money.

"The key to success is to recruit high-quality digital talents, (maintaining the ability) to analyze talent data, transform it into business insights and ensure the human resources department is adaptable (to the new requirements)," Wang said.

Buoyed by the blossoming big data, cloud computing, AI, the internet of things, blockchain and other emerging technologies, the digital economy is playing an increasingly significant part in driving China's economic growth.

 

The size of China's digital economy hit 31.3 trillion yuan (US$4.5 trillion) in 2018, accounting for 34.8 percent of the country's gross domestic product. To gain a key edge in the future market, a growing number of Chinese companies are gearing up for digital transformation.

Daniel Sun, research vice-president and analyst at Gartner, a leading research and advisory company, said it will still take some time for Chinese companies to deepen the digital transformation.

"During the process, many foreign companies will spend more than 3 percent of their total revenue on digital transformation. Chinese firms, on the other hand, may spend 1 percent to 1.5 percent of their revenue for the same," Sun said. "It is a good thing that more and more Chinese companies now consider digital transformation a priority. But it will still take a long time for them to increase the IT spending and finally enter the mature period when the integration of IT and the firm's business will foster new opportunities and generate new revenue streams."