The data science skills gap is something I’ve touched on a number of times over the years, not least because so many organizations highlight it as a major barrier to their digital transformation efforts. Most of the time when companies complain about the lack of skills, they’re talking largely about operational skills, but recent data commissioned by Qlik as part of the newly launched Data Literacy Project highlights the scale of the challenge.

The survey of several hundred decision makers, which was conducted by Wharton School of the University of Pennsylvania, found that just 24% of senior decision makers passed the test for data literacy.  This cannot simply be put down to a generational thing either, for the study also suggests that data literacy among digital natives was just 22%.

A variable picture

The data provided additional granularity to these findings across both geography and industry.  For instance, Singapore emerged as the most data literate country in the survey, with Europe also scoring highly via the UK, Germany and France, who all trumped the United States.

It could be argued that EU nations score highly because of the intense focus placed upon data by the new GDPR regulation, which came into force in May 2018, with the report also citing greater recognition of the importance of data among European executives than their peers from elsewhere in the world.

These differences matter however, as the data suggests that a lack of data literacy can cost organizations several hundred million dollars in lost value, whilst high data literacy was also linked with better gross margin, return-on-assets and return-on-equity.

Knowing-doing gap

Unfortunately, despite so many executives appearing to value what data can bring to their business, few are doing much about it.  Not only are they not particularly literate themselves, but they also don’t appear to be supporting employees in becoming data literate either.

The data reveals that just 17% of businesses are encouraging employees to become more confident with data, with only 34% offering any kind of data literacy training.  What’s more, just 36% of companies said they would pay higher salaries for people with data skills.

This represents a considerable missed opportunity, as a previous report by Qlik revealed the number of employees wanting to invest in improving their data literacy.  Indian employees led the pack, with a whopping 95% of employees keen to improve their data literacy, but similar numbers were recorded elsewhere too, including 82% of American employees and 76% of Germans.

Improving your data literacy

The report provided a number of tips to help organizations improve their data literacy:

• Understand how data literate you are – it’s vital that you understand where you’re starting your data journey from. The Data Literacy Index provides a tool to help organizations assess their overall data literacy, with businesses able to compare themselves against others in their country and industry. This is a vital first step to help you understand where you are so you can take any remedial actions.
• Communicate the power of data – if organizations truly believe that data can transform their business, then they need to communicate that so that employees are left in no doubt. This should not just be done via mission statements, but via success stories of how data has improved the business.
• Provide individual training – Qlik suggest that even with relatively low numbers of employees getting access to training, those that do often complain that it wasn’t relevant. There isn’t a one-size-fits-all approach to this, and training should be customized where possible.

This can then be a continual process of renewal in response to the ever changing data needs of the organization.  With a clear connection between data literacy and financial performance, it’s a process that really can’t start soon enough.

“This is the first time that data literacy has been measured on a company level, which includes not only the data skills of company employees, but also the use of data for making decisions throughout the company,” said Lorin Hitt, Professor at Wharton School of the University of Pennsylvania. “This is important because our research suggests that this broader concept of corporate data literacy represents a mutually reinforcing set of business practices that are associated with higher financial performance.”

If you would like to explore the project, or look into taking the data literacy test in your own organization, you can find out more about the Data Literacy Project via their website.