Want to Retain Employees? Invest in Training and Upskilling
Fifty-five percent of U.S. knowledge workers say the best way to develop their skills is to change companies according to a September Microsoft report. With companies struggling to fill skills gaps, the research (based on a survey conducted in July and August 2022) should cause leaders to pause.
Despite the popular narrative that the employer-employee relationship dynamics have shifted, organizations remain very much in control of their talent strategies. In fact, Microsoft's report found that those same knowledge workers would stay longer at their company if leadership made it easier for them to change jobs internally (68%) or if they could benefit more from learning and development support (76%).
The research also uncovered a few trends that have been bubbling underneath the surface of the workplace since before the pandemic. Let's explore.
Tech Is Changing the Landscape
One of the key eye-openers to come from the research is that one of the principal engagement drivers in the digital workplace — that one area that appears to be challenging leaders the world over — is providing access to training and upskilling opportunities. Where those training possibilities didn’t exist, the report found, employees were happy to change jobs. So why aren't organizations keeping up with this need?
According to Taylor Sullivan, senior staff industrial and organizational psychologist at San Francisco-based Codility, while discussions about training and upskilling are now a lot more common than they used to be, the problem isn't new. One of the reasons is advancing technology.
Citing two distinct McKinsey reports, Sullivan said it was estimated that as many as 375 million workers — 14% of the global workforce — would have to switch occupations or acquire new skills by 2030 because of automation and artificial intelligence, and that 87% of executives are either currently experiencing or expecting to experience skill gaps within just a few years.
While this is a problem, she said that less than half of the respondents had a clear sense of how to address the problem. In her view, the time has come for companies to reinvest in learning and development (L&D) and commit to reskilling and upskilling their workforce.
“By retooling hiring assessments and coupling them with thoughtful learning initiatives, you’ll be generating data that will empower you to build operating-model resilience and mobilize your tech talent to retain a competitive edge,” she said. “After all, companies can’t be resilient if their workforces aren’t, and tech workers, in particular, are often the lifeblood of progress and innovation.”
Related Article: How Digital Upskilling Is Redefining the Talent Marketplace
The Economy Isn't Helping
The global economy is in a slump, and in the U.S., experts are debating whether we are in a recession or a slowdown — either way, it's a difficult time for many organizations. Just this week, Amazon was the latest tech company to announce it was freezing hiring. Companies are in cost-containment mode, and this is impacting their ability to compete for talent.
For Sullivan, this is the perfect time for organizations to explore how they can better train existing talent to move into new roles, functions or departments to address evolving business and market needs, increase efficiencies and unlock new opportunities despite the economic challenges. She points to two primary types of skill-based talent mobilization:
- Upskilling, which is the process of learning new skills or deepening learning of existing skills
- Reskilling, which is the process of learning new skills for a new position
Organizations that don't provide these types of opportunity risk losing valuable team members, Sullivan said, adding that her firm's research clearly demonstrates that risk among engineers, where lack of learning and development opportunities will force employees out the door.
Related Article: Where's the Technology to Address Internal Mobility Needs?
New Work Models Require New Approaches
John Fallon, director of product marketing for New York City-based ETU, which provides immersive learning and training simulations, said the development of new work models is another factor having an impact on traditional training. Companies need time to rebuild programs to suit both the new workplace and the new workforce — and upskilling requires practice, he said.
“Providing practice for such a large number of people at once requires new approaches and new technology like more scalable immersive learning and simulated practice solutions,” Fallon said.
The rule of thumb for L&D is that 70% of learning should be experience-based, which highlights the extent of the challenge in a new remote world. At the same time, he said, many organizations are struggling to measure existing skills and mapping skills to programs.
“We have seen the most successful organizations focus on a small number of critical skills (10 to 20) and go big on them. Effective upskilling programs show 30-50% upskill in critical skills, so businesses need to be striving to hit that metric,” he said.
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Organizations that align L&D with talent development can take on bigger programs that have greater impact on people career opportunities, although he says those 55% of knowledge workers who believe changing company is necessary to gain new skills are likely to find the same situation elsewhere, at least for the time being.
“People don’t need to move companies to upskill, but they do need to find a company that is committed to upskilling,” Fallon said. “If their current company is not investing, then it is only logical that people will move. For a modern business to keep up, upskilling needs to be made a priority as soon as possible."
Related Article: Can Employers Change Employees' Job Descriptions?
Room to Grow
There is another factor driving this trend: the labor market. In this climate, it's still easy for employees to leave their employers if they’re not happy with their current roles or aren't getting the level of support they seek.
Jessica Reeves, SVP of operations for Anaconda, said for that reason, it’s important not to pigeonhole the L&D function as solely an HR practice, but rather ensure it’s a collective commitment shared among all departments and leaders.
“While actively receiving training to learn new skills and tools are needed within every organization, digital companies must be flexible and allow the space for employees to grow and progress on their unique career paths, even if that strays from their current one,” she said.
There are many ways to do that. One of which, she said, is for companies to build a program that allows employees to try out a different role or tap into other skills within the company, without fully committing to leaving their current position. Doing so can provide employees who want to explore a new career path or try their hand at a new skill an opportunity to do so, while giving the company a chance to retain and work with motivated talent seeking to grow and take on new functions.
No Time to Waste
A 2021 PwC report showed that although 77% of workers are ready to learn new skills or completely re-train, only one in three feel that their current employer is offering them the opportunity to upskill. Laura Baldwin, president of O’Reilly Media, said the data is overwhelmingly convincing, and organizations should not ignore it.
"We’re seeing reports that 70% of employees would consider leaving their current company for a role in an organization known for investing in employee development. And 94% have said they would remain working for an organization that invested in career development. Those numbers lead to only one conclusion: invest in your people’s development if you want to retain them," she said, adding that with the tech talent pool as depleted as it is today, losing people can be catastrophic.
Too many organizations haven’t put L&D efforts at the forefront of their company culture, and when facing the headwinds that companies are up against today, the cracks in the organization are going to be revealed very quickly.
“Those companies already haven’t been able to find or retain the talent they need to stay ahead of the technologies that drive innovation — and they currently have no way to upskill their current teams either. They’re quickly running out of solutions and they’re falling behind,” Baldwin said.