To add a layer of complexity to “The Great Reshuffle” where hiring rates are outpacing quit rates, companies are facing major skills gaps that compound the increased competition for workers. How do they fill personnel gaps while addressing today and tomorrow’s gaps in critical skills? How can they prioritize agility when they’re constantly playing a game of catch-up? And how can they help keep employees productive and engaged while future-proofing the business?
Harvard Business Review (HBR) illustrates the challenges like this: “You are behind your competitors in digital transformation and are even more worried about startups with massive funding that may leapfrog you. You are trying to make progress, but cannot hire enough data scientists, agile coaches, engineers, product owners, cyber experts, or design thinkers. […] you have too many unproductive middle managers, and your digitally unskilled frontline workers are not prepared for the changing world ahead.”
How Did We Get Here?
The pandemic isn’t solely to blame for creating this environment. The World Economic Forum says that “Automation, in tandem with the COVID-19 recession, is creating a ‘double-disruption’ scenario for workers.” And digital transformation is expected to drive change even in the mix of workers: “Forty-three percent of businesses surveyed indicate that they are set to reduce their workforce due to technology integration, 41% plan to expand their use of contractors for task-specialized work, and 34% plan to expand their workforce due to technology integration..”
The changing business environment, fueled by evolving customer demands, has led business leaders “realize that the skills they’ll need inside their organizations in the future will not be the ones they’ve needed in the past.”
In its Future of Skills report, LinkedIn’s analysis found that “skills changed by 25% on average globally since 2015. And in most cases, the pace of change accelerated during the COVID-19 pandemic.” At this pace, “skills could change by anywhere from 39% to 44% by 2025.”
Why Is Upskilling and Reskilling the Answer?
Let’s start by noting the difference between upskilling and reskilling. The key difference between the two is the degree of change in the resulting skill set. According to McKinsey:
- Reskilling: When a person is building a different skill or set of skills to be able to perform in a different or significantly evolving role.
- Upskilling: When a person is building a higher level of competency in a skill or set of skills to better perform in the current role.
In both cases, existing employees receive training that ultimately benefits them and the business in key ways:
- Increased productivity
- Enhanced job satisfaction
- Higher retention rates
- Improved agility
Deloitte calls this “a learning transformation […] one that focuses on the connection between continuous re/up/outskilling, on the one hand, and actual work, on the other.” Developing the systems and programs, not to mention culture, to make this learning transformation a reality sets businesses up to keep pace with ever-changing skills with the tools needed to be adaptable.
What’s more, they’re keying in on something today’s workers want: development and growth. “When an employer invests in staff’s learning, development and growth, employees feel valued and are significantly less likely to leave the company.”
How Do We Get It Done?
Increasingly, organizations are adding learning & development to their leadership roster. In LinkedIn’s Workplace Learning Report, “63% of L&D pros globally agree that L&D has a seat at the executive table.” And their top priorities reflect the critical need to hire efficiently and develop existing employees:
- upskilling and reskilling (59%)
- leadership and management (53%)
- virtual onboarding (33%).
To make these efforts successful, business leaders also need to shift how they think about investment in these areas. “The majority of skilling efforts fail because they are set up to optimize for learning and development (L&D) costs instead of driving real business impact.”
The right set of tools and tech will be important for delivering and tracking learning, but as businesses evolve, the requirements for those will as well. “That [technology] landscape should continuously evolve, based on the organization’s learning and business needs, but optimizing the technology stack requires direction on what is trying to be achieved and why.”
In addition to establishing key performance indicators (KPIs), ensuring data and reporting capabilities are in place will be important for achieving results both quickly and in the long term. “Learning design and delivery is both a science and an art. Data can be used to inform decision making in every step of the learning journey.”
What Does Success Look Like?
The challenge with the goal of “future-proofing” is that the goal posts keep moving. In fact, it’s not a destination where organizations can aim to “arrive,” but instead, it’s about setting up the capabilities to help make the business and its people adaptable. “Employers should empower their employees with the right tools, flexible resources, and supportive context to own their personal reskilling journeys.”
That means that beyond those critical data points, like increased productivity rates and reduced recruitment costs, a success looks like an organization that “ensures an adaptable, flexible, agile workforce and enables employee growth, as well as personal and professional development.”
After all, today’s workers (and customers) care more about who they’re working for (and purchasing from) more than ever. “Yes, today’s businesses are still expected to be profitable, but to achieve true success, consumers — and employees — are increasingly asking that the businesses they support demonstrate a significant positive impact on the world around them.”
So perhaps the definition of success isn’t what the business has achieved but instead who the business has become.