Does the hybrid work model resolve or exacerbate the skills gap?

Welcome to part II of this four-part series discussing the realities of implementing the hybrid working model. Part I laid out the key obstacles businesses face when putting the hybrid working model into practice. Missed it? Read it here.

A study by the World Economic Forum found that c. 54% of employees will need reskilling or upskilling by 2022. That’s only 6 months from now. This dramatic and growing skills gap is becoming a huge focus area for companies as they seek to reconcile the accelerating pace of digital transformation with current employee abilities. Companies are tackling the problem by starting to look to wider talent pools to attract the skills their business needs, at a competitive cost.

c.54% of employees will need reskilling or upskilling by 2022. That’s only 6 months from now.

With the establishment of remote and hybrid working, we now function in a world where we’re less dependent on physical location. This makes the concept of a truly global workforce a reasonable reality. This prospect is particularly exciting for countries where skills gaps are particularly large. Companies can now tap into high-quality talent without the headache and cost of travel, visas and foreign expenses. Sounds appealing, doesn’t it?

A double-edged sword

Few appreciate that accessing global talent pools comes with significant challenges, particularly in countries where the skills gap is persistently large. Examples include South Africa and other developing nations; 87% of African business leaders are concerned about the availability of skills. The small pool of local skilled workers, previously employed by local companies, are now more readily available to be poached by large global corporates that often offer better compensation and career opportunities.

Consequently, while new working models bring greater autonomy and flexibility for individuals and organizations, a ‘universal pool of talent’ is likely not a desirable outcome for all. The Digital Skill Accelerator Africa group have explored both accessing skilled workers and reducing costs by fulfilling digital services through Africa-based resources. But the question is: does this actually serve to develop digital skills in Africa, or does it just isolate the already limited talent pool away from local companies?

Companies’ approach to a global workforce is yet to be seen. What is clear is that there’s a shortage of digital skills. Focus therefore cannot only be on accessing the required skills from pre-existing talent; real time, money and effort must be put into upskilling and developing local talent, wherever that may be, to address the global skills shortage.

Is a global workforce practical?

We can all agree on the attractive opportunities presented by the remote working revolution: accessing new jobs with exciting global companies. Working from rural settings on a weekly basis. Moving to an exotic location and setting up shop away from the hustle, bustle, and sometimes mania, of city life.

Nations are playing a part in these aspirations, offering ‘work from home’ visas and favorable relocation prospects to lure in new residents. The concept of global remote working put into practice can however create considerable headaches for companies. It also may not be as lucrative or as easy as advertised.

The concept of global remote working may not be as lucrative or as easy as advertised.

According to an EY study, corporate tax and payroll risk, such as increased taxes on salary, are the two greatest concerns among companies looking to hire abroad; 39% and 24% respectively. This happens when companies do not have a permanent presence in a separate jurisdiction. This opens them up to liabilities such as increased taxes and issues around labor laws and benefits. Some of these rules have been relaxed post- pandemic; for example, the threshold for individuals working in a foreign country as a non-tax resident. Looking forward, however, companies must assess the feasibility and cost of accessing and enabling a truly global workforce. In the meantime, effective company communication on working and tax allowances it critical to temper employee dreams of a beach office.

Stay tuned

In the next instalment of this series we will explore what happens when physical and remote working cultures collide – can organizations really build and blend culture to successfully support hybrid working models?