New research from Expleo, the global engineering, technology and consulting service provider, shows that a talent drought and heightened salary expectations are threatening business transformation plans for half of UK energy organisations, as leaders admit to under-investing in technical skills.
Talent shortages were cited as a growing concern among 49 per cent of respondents in Expleo’s ‘Business Transformation Index 2023‘, with nearly eight in ten (79 per cent) saying a scarcity of skills in emerging technologies is a growing problem for their organisation.
A further 71 per cent of those questioned admitted that they struggle to retain technology talent due to unaffordable salaries.
“The findings suggest that employees with the skills to effectively harness the latest technology remain in short supply, despite recent job losses in big tech,” said Karen Lee, programme manager for energy and utilities at Expleo. “In turn, this creates upward pressure on salary expectations, with top talent able to influence unprecedented levels of remuneration.”
Expleo surveyed 1,395 business and IT leaders from large organisations in the UK, France, Germany, Ireland, India and the US to understand the impact of the pandemic, geopolitical tensions, and inflationary pressure on business transformation.
Lee continued: “The skills gap remains the most common barrier identified by transformation leaders in our survey, just as it was in our 2022 Index. However, the difference this year is a significant increase in the disruption this is causing – with the acute shortage of digital skills holding organisations back from harnessing the power of new technology such as generative AI.”
Of those sampled from the energy and utilities sector specifically – 113 respondents – 83 per cent agreed that they have under-invested in the technical skills base of their employees. This is the highest of any sector and compares to 74 per cent of overall respondents, suggesting energy companies are more open than other industry players in acknowledging the importance of plugging the skills gap. To address this, nearly half (47 per cent) of companies intend to increase use of temporary/contract labour and engaging the services of third parties – six per cent more than other sectors.
In the 2023 survey, respondents point to economic uncertainty and global instability as the second most significant barrier to the success of transformation projects in the UK, moving up from sixth position in last year’s survey. This is largely due to disruptive global and macroeconomic issues causing greater concern among business leaders, with 58 per cent scaling back digital transformation plans as a result.
Looking to the future, the research found that business and IT leaders are aware of the importance of being able to pivot at pace. In the UK, 45 per cent now identify business agility as a discipline that will be a major focus area for their organisation over the next 12 months.
“While leaders grapple with a changing skills market, they are also navigating choppy economic waters. The uneasy reality for some is that plans set out with a few years ago may not be the right ones for the market circumstances of today,” Lee summarised.
“To help keep transformation programmes on track, many organisations may be looking to external partners to fill gaps in expertise. Doing so can help provide flexibility and scalability to projects, and foster the harmonious blend of innovation, discipline, experience, and effective collaboration that is required for success.”