How Employees With Mismatched Skills Are Damaging Your Company’s Productivity

Many companies are employing people with mismatched skills and this is damaging productivity and profitability within their business.

I wrote an article in February this year about the dangers of recruiting employees with the wrong skills for the vacant position. Many employers look for skills that aren’t needed to get the job done.   Almost half of employees in the UK are in jobs with mismatched skills.  They are either over-or-under skilled for the job.  Or they might have the wrong qualification, or are not qualified at all.

A report by the Chartered Institute for Personnel and Development (CIPD) last year found that over a third (37%) of workers have the skills to cope with more demanding jobs.  Additionally, many people with degrees are in jobs which do not require such a high level of qualification. Conversely, one in ten people reported lacking the skills needed to carry out their job effectively.  The report concluded that as many as half of UK workers could be in the wrong job, based on their skill level.

Why does it matter if your employees have mismatched skills?

Mismatched skills bring negative impacts for our employees.  This has a knock-on negative effect on our business.

For employees, the CIPD survey found that over-skilled workers earn less than those whose skills are well-matched to their jobs.  This can result in a long term inability to increase their salary to a level they feel equals their skills. This can lead to resentment.

On the other hand, if someone has not got the relevant skills for their job, then they can become stressed and may work longer hours than is healthy.

Other issues for employees who have mismatched skills may include:

  • reduced chances of promotion;
  • difficulty in getting a new job;
  • poor job satisfaction;
  • lack of trust in the workplace;
  • lower confidence.

Why does an employer need to worry about this?

For employers, these implications for our workers are a key factor in the productivity levels for our business.

If our employees have mismatched skills, they are less likely to do a good job for us.   Their motivation and job satisfaction will suffer.  As a result, they may become resentful and even disruptive.   Their sickness absence levels are likely to increase.  All of these things are difficult to manage in the workplace and result in cost (in time and money) for the employer.

You may start to wonder why you have been unable to recruit a more satisfactory and happy employee.  Employers often think that it is difficult to recruit the right people.  But it may be more accurate that they are not even looking for the right people.

You may also find that employees are leaving only a short time after they started working for you.  Over-skilled employees will want to leave and find a job which is better matched to their skills.  And under-skilled employees may just be very unhappy because they struggle to do the job.

All of these things affect the overall productivity of your workforce.  And that increases your costs and reduces your profits.

How can I address the problem of mismatched skills?

If you ensure your employees have the right skills for their jobs, either through recruitment or training (or both), then they will be happier in the workplace and you will benefit from higher productivity and increased profitability.

To avoid mismatching skills to jobs in your company, there are some key areas where you might want to take some action.

  • Recruitment . A good place to start is to review your recruitment process.  Have you got a recruitment strategy?  If so, does it need to be adjusted?  How accurate are your job descriptions? Have you reviewed your job descriptions lately?
  • Skills Development And Training. Is it time for you to invest in some training? You could arrange some skills development for the current job holders, where they are under-skilled.  Clearly this will address specific problem areas.  But it can also send a powerful message about valuing your employees .
  • Conducting a skills audit. This can give a clear picture of the skills you already have in your workplace. You may be unaware of some of them.  It is certainly likely that you will find a number of areas where some adjustments can be made in terms of job design or training plans.   It could even lead to some restructuring if you can move people around to address some of the key skills gaps.
  • Job design. Once you understand the skills you have in your workplace, you can prioritise better use of those skills.  Then you can adapt how well  and where those skills are used.  You can then ensure you have the right jobs with the right people in them.  And you can recruit and train others, as necessary.
  • Management training. Your managers are key in this whole process and it will pay you to ensure they have the skills to support employee development. You may want to review your management practices as well and ensure your managers are confident in those practices.

What benefit will it bring?

If you can address these key areas, your employees may start to use their skills fully and appropriately in the workplace.  This will bring them increased levels of job satisfaction.  They are likely to earn more throughout their career and have more confidence and less stress.

This can lead to increased loyalty, trust and motivation.  Your retention rates will go up and the money you need to spend on recruitment will reduce.  All of this leads to higher productivity, more rapid growth and – ultimately – better profitability for your business.

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Is Investment In Employee Skills Your Secret Weapon To Increase Productivity?

I was taught at a very young age to put some pennies in my savings account each week. Money given by generous relatives at birthdays and Christmas also went into the same account. And if I did simple chores around the house, then I was sometimes rewarded with some more to add to the savings.  And it grew, slowly but surely.

But it never occurred to me that there were other ways to make my money grow more quickly.  And I don’t think it occurred to my parents either.  They were never very well off and they worked hard for every penny they ever had.  It is only as an adult that I have learnt about investment and compound interest.

Investment is a subject which we would do well to learn about, as employers.  Investment in the skills of our employees can pay rich dividends.

What do savings and investment have to do with employing people?

It is sensible to save into an emergency fund, both in personal terms and in business.  Your business may win a piece of work which requires some unusual skills not found in your workforce, or you may just need extra people, or some equipment.  If you have an emergency fund, this enables you to hire in temporary help, or people with the required skills.  Or it allows you to buy a piece of essential equipment.

Training and developing your employees is more of an investment.  Your future plans may highlight the need for new skills or a different approach and if you were to invest in training your employees, those skills will be available when the need arises.

What is the benefit of investing in my employees?

If we make an investment, we are seeking two types of return.  Investment needs to bring either a regular income, or an increase in the value of the investment.  Preferably,  both.

The same rules apply when we invest in our employees.  If we buy new equipment, or some skills training, or even an additional employee, we need to know that the money has been well spent and the return will be worth the investment.  There has to be an increase in the amount or quality of work done, or increased efficiency.  This, in itself, is evidence of increased productivity.

But more importantly, there is likely to be an exponential effect on productivity in general.   Where employees feel valued, they will be more productive.  If people have evidence that their employer is prepared to invest in them, they will go the extra mile and productivity will naturally increase.

The alternative is a decrease in productivity, brought about when employees feel undervalued, sidelined or taken for granted.  Our natural inclination is to do a good job but that can slide into mediocrity if our efforts are not recognised.

Return on Investment

Many employers are reluctant to invest in skills training for their employees.  In these days of austerity and tight budgets, that is understandable.    Such training can turn out to be a waste of time and money. The person either does not learn the right thing, or they fail to put it into practice properly.  It can feel as though you are spending the money for the employee’s benefit, rather than for your business.  Especially if the employee then leaves to work for someone else, with their new-found skills.

To get the very best return on investment, it is wise to plan beforehand.  We want to be  sure the skills training is appropriate and is likely to achieve the required result.   And what about the employee?  Do they want to do the training?  Do they have the right attitude, aptitude and attention span?  Is there a clear plan for implementing the training as soon as it is done?

This also applies to an investment in equipment or new employees.  Or, indeed, to any type of investment.

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