Identifying and Understanding the Importance of Soft Skills

You can’t always reach out and touch them, but you’ll certainly feel them. Soft skills are out there; in fact, they’re all around us, permeating life both in and outside of the workplace.

What do soft skills bring to business? 

Today, soft skills are considered so important to the pursuit of business success that some have even tried to measure them monetarily. For example, they’re said to be worth £88 billion (c. US$134 billion) to the UK economy each year, according to research from Development Economics that was carried out as part of an employer campaign backed by companies that include Barclays. How is this measured? Well, the study holds that when a lack of soft skills is in evidence at a company, operating costs go up and new product or service launches can be delayed. In consumer-facing enterprises, it can also negatively impact on customer loyalty and an organization’s ability to adhere to standards of quality.

The study was commissioned by employers because they want to see greater levels of soft skills in evidence in the workplace. This desire has also been confirmed with specific reference to the world of postgraduate business education. While participants at an employer forum held by the accreditation body AMBA in 2014 didn’t downplay the importance of traditional technical capabilities, or ‘hard’ skills – necessary to carry out management duties effectively – these are now expected and often even assumed. Soft skills, on the other hand, are what set people apart.

Soft skills as character traits

When it comes to the crunch, soft skills can essentially be viewed as character traits. They are more than just a capability you acquire through instruction and hands-on application, they inform your personality – for better or for worse.

In business, it’s often the case that when an organization is rocked by a scandal of some kind, attention usually turns quite quickly to the character traits of those implicated– a recent case in point being the emissions scandal afflicting Volkswagen in the latter half of 2015. For those with aspirations of leading corporations in the future and those who have the responsibility of training them, paying due attention to character traits is therefore highly relevant:

“People are realizing that we need to start investing in character,” Mary Crossan, a management professor at Western University’s Ivey Business School, said in a recent report for Canadian Business, which also draws attention to a study in which CEOs receiving high marks from their staff for what are deemed to be positive character traits also enjoyed healthier returns on assets than those with lower ratings in this regard, on average.

With this potential impact firmly in mind, it’s important to pin down precisely what areas of character we are referring to when we speak of soft skills.

Grouping strands of soft skills

To better understand what we mean by soft skills, we need to define their various strands.

When it comes to the qualities desired by those who hire MBA graduates, QS measures the demand for soft skills across four broad areas each year – those areas encompass leadership, communication and interpersonal skills as well as strategic thinking.

Interestingly enough, these are the four most sought-after skills (out of a total of 15 skills and capabilities) among the employers who responded to QS’s latest global employer survey. Communication and interpersonal skills topped this list, ahead of strategic thinking and leadership in third and fourth place, respectively. Attributes left in the wake of this flurry of soft skills by MBA employers include finance and IT skills, marketing and even relevant experience.

Yet none of these skills found their levels of importance matched by the average satisfaction levels, which employers were also asked to give in reference to their recent hires.  

The next article in this series will therefore delve deeper into each of these categories in turn.