Analyzing fresh data on the digital skills gap - and how to address it

Since my June semi-rant on the so-called talent crisis, revealing data on digital skills has crossed my radar. No rant this time - the data is framed in a less alarmist manner. Still, a mismatch between employers' digital expectations and what applicants bring is bad news for both parties.

When a watchdog study shows that UK police departments struggle with IT complexity and a lack of digital skills, it's one more proof point for the pervasive demand for digital. Contrary to the "digital native" concept, it takes more than the ability to post exotic selfies and spew emoticons to fill these roles.

Digital is carving a divide in "middle skills" occupations

A 2015 survey by Burning Glass Technologies - funded by Capital One - provides a broader look. This report, now supplemented with new data on hot IT skills jobs and roles, is different because it looks at the impact of digital on "middle-skilled" jobs in the US - not sophisticated "high-skills" digital roles.

Burning Glass compiled the Digital Skills Gap in the Workforce report by analyzing 100 million job postings collected since 2007, along with "other publicly available data sources." They used "advanced text analytics" to analyze more than 70 data fields on job postings.

Middle-skill jobs are roughly defined as jobs that require more than a high school education but less than a bachelor's degree. Given these jobs comprise an estimated 39 percent of U.S. employment, they are worth keeping an eye on. Burning Glass found:

• Nearly eight in 10 middle-skill jobs require digital skills. Spreadsheet and word
  processing proficiencies have become a baseline requirement for the majority of middle-skill
  opportunities (78%).
• Digitally intensive middle-skill occupations are growing faster than other middle-skill
  jobs. Digitally intensive jobs have grown 2.5 times more rapidly than middle-skill jobs that
  do not require spreadsheets, word processing, or other digital skills (between 2003 and
  2013, 4.7% growth for digitally intensive jobs compared to 1.9% growth for other positions).
• Digitally intensive middle-skill jobs pay more than middle-skill jobs that do not
  require a digital component. Digitally intensive middle-skill occupations offer 18% higher
  wages on average: $23.76 per hour compared to $20.14 per hour for all other middle-skill
  jobs.

Burning Glass notes these "digitally intensive" middle-skill jobs have grown at the same rate as high-skill positions since the recession. That's not the case for middle-skill jobs without a digital core. Those have the slowest growth of any category - even low-skill positions. For white collar workers without college degrees, it's digital or bust.

Defining digital competencies - McKinsey's technical view

In last month's The new tech talent you need to succeed in digital, McKinsey laid out the most important technical capabilities for digital projects. By contrast with the middle-skills Burning Glass looked at, these are high-skills roles. These are the jobs that provoke the "talent wars" headlines the tech media loves to flog. McKinsey's Satty Bhens, Ling Lau, and Hugo Sarrazin defined these six tech job roles (seven if you count front-end and mobile engineers):

• Experience designers and engineers - Spanning beyond IT, experience designers are focused on "getting at the heart of the customer through ethnographic research, human-centered design, and rapid test-and-learn cycles with customers." Front-end and mobile engineers partner with experience designers to go from prototypes to working software.
• Scrum masters and agility coaches - Agile requires leadership skills but also the tech know-how to push out product in iterative cycles.
• Product owners - McKinsey defines this as the "mini-CEO of a digital product." Though I'm not a fan of McKinsey's corporate-speak about "laser focused on KPIs to track progress," I don't object to leaders with strong collaboration skills across disciplines.
• Full-stack architects - these hands-on developers are expert in web technologies and "are knowledgeable and fluent across the different 'stacks' of a large-scale software system (e.g., front-end user interface, middleware integration services, databases)."
• Next-gen machine-learning engineers - there is a need for engineers who can "program in scalable computing environments," and who are fluent in tweaking and testing algorithms.
• DevOps engineers - "software engineers with a passion to apply the same craftsmanship to IT infrastructure and operations." That includes infrastructure-automation technologies (Puppet, Chef), cloud platforms (Azure, AWS), and containerization technologies like Docker.

The McKinsey report goes into detail on each role. Despite the technical focus of this report, even these roles require significant business savvy. Take DevOps:

Besides technical excellence, DevOps engineers understand how technology serves business goals and are flexible in adapting approaches to changing business needs. What separates a good from a great DevOps engineer is the ability to role model the collaborative DevOps culture, think about infrastructure, and partner with the business to link solutions to real business problems.

Or machine learning engineers:

What really makes a great machine-learning engineer is the ability to understand how an idea goes from concept to delivered insight.

In his summary, ZDNet's Joe McKendrick makes a vital point on how these roles are different. No cubicle coders allowed:

All these IT roles now require an additional twist -- there needs to be greater engagement with end users, and even more directly with customers themselves.

After defining the above jobs, the authors move on to how to recruit the talent. Recruiting tactics include:

1. Build a compelling vision - money matters only to a point. Beyond competitive pay, mission and value proposition are what attracts.
2. Make targeted ‘anchor hires’ - Hiring visible digital leaders causes other hiring dominos to fall.
3. Reimagine recruiting - Brian Sommer has blasted through this topic with vigor on diginomica of late.
4. Create a network of digital-labor platforms - I covered this one in my so-called talent crisis piece.
5. Build an ecosystem of vendor partners - move from reliance on one or two monolithic vendors to a variety of expert suppliers. Too many companies are still hopelessly stuck on this one - time to open up that vendor approval process!
6. Acqui-hiring talent - obtaining talent via acquisition.

Occupation by industries - another digital twist

The Burning Glass report determined how digital skills beyond productivity software (Word, Excel) adds directly to the salary. "Advanced digital skills" such as Customer Relationship Management, Computer Network and Support, Digital Media and Design, and Social Media Tools and Search Engine Analysis invoke a skills premium, with CRM as the highest:

Occupations that call for one or more advanced digital skills pay an hourly wage 38% higher on average than non-digital middle-skill occupations ($27.73 vs. $20.14), and 22% more than occupations that call for only productivity software skills.

Another crucial point: digital skills often have an industry context. That requires an additional level of experience. Burning Glass called attention to occupation-specific digital skills in health care, production, and manufacturing. Spreadsheets and word processing, while usually still required, must be complemented by industry skills specific to the machinery and tech of each occupation, e.g. radiology equipment.

The wrap - digital skills needs are pervasive, and workers aren't ready

Burning Glass reinforced that UK police example:

It’s no surprise that all of the middle-skill occupations in the Computer and Mathematical family require digital skills. But so do those within Office and Administrative Support, Business and Financial Operations, and Management.

Leading to this blunt prognosis:

Effectively, entire segments of the U.S. economy are off-limits to people who don’t have basic digital skills. Even for middle-skill Production jobs, such as machinists, eight in 10 job postings require these skills at some level.

Burning Glass goes on to point out that even people-centric jobs like retail and sales now require some level of digital know-how. Workforce investment, typically focused on high-tech industries and sophisticated coding skills, should benefit from broader upskilling in "widely used used productivity applications and social media tools."

Both reports fall short on how workers can be brought into digital relevance. McKinsey's recruiting tactics are good ones, but they operate on the assumption of a small pool of highly-sought digital talent. That's not wrong, but a smart company would figure out how to grow their own - and recruit from a more diverse applicant pool.

In my talent skills crisis piece, I covered talent reach. That includes partnering with groups the expose companies to underrepresented talent pools. There are a host of external organizations, from the White House TechHire Initiative to LaunchCode, which, as per its web site, “works with hundreds of companies to set up paid apprenticeships in technology for talented people who lack the traditional credentials to land a good job.” Our own Derek du Preez wrote a terrific post on a similar organization, Year Up (“Competency over Pedigree“).

This means breaking out of the box of permanent hires and high-priced digital consultants. Savvy companies can expand contingent labor with use of talent platforms, hackathons, and crowdsourcing.

I welcome studies that provide specifics on digital skills gaps and emerging job roles. Such reports should light a fire under workers at all educational levels. Most degrees are insufficient for the required combination of tech, collaboration, and business skills. What's needed are creative solutions for companies to transition raw talent into digital contributors. With the prevalence of digital needs across industries, a limited approach to fighting over rock stars will prove inadequate at any rate.