Upskilling, reskilling, continual learning — no matter what you call it, chances are you’re thinking about the need to teach your workforce new skills to compete in the future of work.
Organizations are transforming faster than ever. With technical innovations adopted by businesses every day, new skills requirements continue to emerge, while other skills become obsolete. And as unemployment rates continue to decline, the skills shortage is only increasing in severity.
This new landscape demands new skills at an exponential rate. Businesses can no longer rely on hiring new employees to keep pace. To stay ahead of today’s workplace disruption, organizations need to think about how they can continuously access talent by mobilizing internal human capital.
Why Invest In Upskilling Your Employees
The skills shortage is becoming a tangible reality for most. In the U.S., the rate of job openings, 4.6%, is now higher than the rate of unemployed Americans, 3.5%. Not surprisingly, SHRM’s 2019 skills gap report found 83% of recruiters had difficulty sourcing talent in the past 12 months, with 75% attributing the difficulty to skills gaps.
As companies continue the fight for talent, they’re realizing they can win the war at home. In a recent PwC report, the majority of executives surveyed listed upskilling as their organization’s top talent acquisition strategy, and for a good reason: It is now cheaper to upskill current employees than to source talent externally, according to a 2019 report by the World Economic Forum.
The current talent drought is not the only reason for an uptick in upskill initiatives. The fast-paced obsolescence of skills is increasingly driving inter-mobility initiatives. McKinsey Global Institute estimates that by 2030, the shortened life cycles of jobs due to rapid technological advancement will require the acquisition of new skills by nearly 40% of the U.S. workforce. Organizations that invest in upskilling employees are setting the stage for long-term, sustainable success.
In 2008, AT&T launched a retraining initiative after analyzing the workforce skills the company would need to thrive in the new, digitalized world. The skills of a large number of employees were projected to be obsolete in less than a decade, and extensive skill shortages were fast approaching.
Rather than attempting to hire external talent to fill the looming skills gaps, AT&T developed an internal recruitment plan for hard-to-fill positions to retrain existing employees. The company’s Future Ready initiative is a $1 billion web-based upskill effort that includes online courses, collaborations with leading universities and an online portal that creates a customized skills profile for each employee, matching them to available jobs projected to grow.
A growing number of top companies like Amazon, JPMorgan Chase and Walmart have launched upskilling programs. In 2019, Amazon announced its $700 million push to upskill its U.S. workforce. The online retailer will provide onsite training and tuition reimbursement over the next six years to meet its goals.
With 84% of today’s workforce eager to learn new skills, it makes sense to leverage talent in your workforce. Below are five steps to designing and executing an upskilling initiative.
1. Conduct an internal talent analysis.
An effective workforce development strategy requires an analysis of the workforce to assess staffing needs and locate talent gaps that are the most significant, the highest priority and the most difficult to fill externally. Use a skills assessment to quantify each employee’s skills and create individual profiles.
2. Forecast your future workforce needs.
To gain a clear picture of the size, type and timing of skills gaps, project the number of employees and the skills that will be needed to meet business objectives in the future. Consider future company needs, new roles and potential outsourcing or automation of current functions that would render some roles obsolete or require new skills. Estimate the types of new skills that will be needed, the impact of new technologies and the timing of these changes.
3. Access the right talent.
Armed with a skills profile for each employee, human resource professionals can execute an internal recruitment plan for hard-to-fill positions. By exploring adjacencies — jobs that share similar skill sets — HR can shift employees into new roles and strategically create upward and lateral career paths for employees with in-demand skills.
4. Upskill your employees.
Regardless of the training platform, proficiency requirements for positions must be directly aligned with the curriculum and subsequent assessments. From tuition reimbursement to mentoring programs, apprenticeships and online educational platforms, employers are investing in a diverse selection of programs to upskill their workforce.
5. Create a system to monitor progress over time.
Develop a real-time system that helps monitor progress. As market conditions continue to evolve at an increasingly rapid rate, the days of approaching workforce planning as an annual exercise are over. Organizations should regularly track, measure and review the internal talent development strategy monthly or, at the very least, quarterly.
The decision to upskill is repeatable, no matter your size or industry. Executing a well-thought-out talent development plan strengthens your company’s human capital component and leads to better performance and profits.
