Telecommunications employees have a tough message for the C-suite: we’re not sure the company is going to make it, and we may not stick around long enough to find out. In PwC’s latest Global Workforce Hopes and Fears Survey 2023, nearly half of telecoms respondents said that their company won’t exist in a decade on its current path (compared with less than a third of respondents from other industries). Perhaps as a result, roughly one in three telecoms employees plan to change jobs over the next 12 months.
These sobering results reflect the tough challenges that telecommunications companies (telcos) are facing across the globe. As companies look to cut costs, seek out new areas of growth and refresh their workforce, they must also continue making significant investments to upgrade their legacy networks and move to the cloud. But they will likely struggle to monetise those investments. PwC’s Global Telecom Outlook 2023–2027 found that data consumption over telecoms networks will nearly triple between 2022 and 2027, largely due to the growth of digital video, yet revenue will rise at just 4% compound annual growth rate (CAGR) in that period.
At the same time, telecoms leadership teams face two important workforce challenges:
- A growing skills gap: Badly needed software talent is hard to find and attract. As a result, many organisations lack the institutional capabilities to unlock new growth, modernise the back-office and legacy systems, and work at the pace of new technologies. Companies that are more accustomed to designing fixed assets, made to function for a decade, must now pivot to software and cloud development cycles that happen in months—and sometimes weeks. Moreover, they are competing with most other industries for the type of talent required to successfully facilitate this shift.
- Front-line labour shortages: Telcos also face a dearth of workers to dig up streets and install wireless towers. In Europe, some telcos are importing teams for these projects from countries where their network upgrades are further along in the process.
Given these issues, here are three priorities for leadership teams to focus on:
Link workforce planning to strategy. Current planning processes can be backward-looking and incremental. Companies often take a top-down approach to making staffing decisions, focusing excessively on capital expenditure (capex) and projected revenue to determine how many people they can have in any given role or function. A smarter approach is to work from the bottom up, focusing on capabilities and skills. That means determining which capabilities will differentiate the company, versus those that are required to simply keep the lights on.
For example, telcos should look ahead to see how digital technologies and AI factor into their strategy over the coming five to ten years. They can determine which capabilities they need in those areas, compare that to their current baseline, and start coming up with a plan to close the gap through a combination of new hires, upskilling and reskilling of the current workforce, automation, and other measures. That’s a big challenge, but it will help companies look ahead and plan more effectively for their future needs.
Expand talent pools. One potential fix for both workforce challenges is to expand the recruiting pool. For instance, rather than competing with other industries and telcos for talent from the same top-tier business and engineering schools, telcos should consider a wider range of schools and backgrounds. Forging closer relationships with a particular school—for example, funding a chair in an engineering programme—may be one way to ensure a regular influx of new graduates.
Market trends may also play to the advantage of companies taking this expansive approach. Recent rounds of layoffs at big technology players have made some talent available that may not have been in the past. And the shift to hybrid and remote working means that telcos can look beyond their own geographic footprint to source talent.
Build your own pipeline. In addition to sourcing from a wider talent pool, telcos can also develop their own training academies to teach people the skills they need, such as basic network engineering. This is a well-established model in Germany, where industrial players create their own vocational training programmes. German telcos often fund student tuition and offer internships and apprenticeships to supplement classroom sessions with on-the-job learning—all with the goal of building their pipeline of future talent.
The business challenges that telcos face are inextricably linked with talent challenges—and they must be solved in tandem or companies risk failure. Urgencies around both business model reinvention and a refreshed workforce are core to developing the resilient telcos of the future.
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