“The Great Resignation” is well underway. While early into the pandemic, businesses laid off millions, the opposite is happening now: millions are quitting. This has been driven by several factors, including employees’ reluctance to go back to the office due to increased health risks. Others have resigned to switch careers or pursue their passions, as pandemic-fueled changes forced employees to rethink their personal and professional priorities.
Millions of professionals out of work have contributed to a mass labor shortage across all industries for people with all levels of experience.
While job satisfaction and health considerations might be responsible for the labor shortage, it’s important to note that a skills gap is also at play. Companies are increasingly relying on employees who possess a very specific skillset, and are unwilling to hire employees without them.
Adding further headaches, skills are becoming redundant more quickly than ever before. While the pandemic fueled rapid, mass digitization of processes across all industries, organizations have been struggling to keep up. As businesses continue to adapt, so will the demand for new skills.
The need for employees to acquire or improve their technical skills is nothing new. However, the pandemic saw job requirements shift, and the need to train employees accelerated dramatically.
LinkedIn Learning’s 2020 Workplace Learning Report—published in February 2020 just before the pandemic set in—discovered that 51% of L&D professionals planned to launch upskilling programs in 2020 and 43% planned to launch reskilling programs.
Of course, the pandemic has only served to accelerate the need for learning leaders and talent developers to upskill and reskill their workforces. Indeed, L&D has heeded the clarion call to help their organizations stay ahead of the curve regarding tackling the skilled labor shortage.
To design an effective upskilling/reskilling program you need a deep understanding of the forces that are driving the need to overcome internal skills obsolescence. Download this free eBook to inform your talent development strategy.
Employers of choice have strong L&D
To address the skilled labor shortage, many companies simply try to sweeten the deal by offering higher compensation, including salaries and bonuses.
However, training and development is itself a benefit that many companies overlook as a component to an overall benefits package.
According to a survey conducted by talent management organization Clear Company, 68% of employees say training and development is the organization’s most important policy and benefit. This makes sense because employees are increasingly viewing particular positions less as a job and more as a conduit to acquiring knowledge and skills that will be necessary for them to continue in their chosen professions.
Unfortunately, according to Nick Day in an article in Roundtable Learning, many companies tend to pull back investment in training during a labor shortage. This is because companies have a fear that they will be investing in workers who eventually will simply move on to other jobs. Such companies view training as a waste of time and money—and perhaps as a way to staff their competitors.
However, “the truth is that outlining a career path and setting attainable goals will retain your skilled workforce and elevate their quality of work,” explains Day.
Companies that invest in training and development often show that they are loyal and care about their employees, and employees will reciprocate by demonstrating more engagement. In this way, by offering robust training and development programs, companies can become employers of choice.
How do you plan, organize and execute an L&D audit that provides valuable insights and actionable recommendations? Download this free toolkit, which includes templates and checklists, for the planning of your L&D audit.
More cost-effective to build than buy
Promoting internally can be less costly than hiring new talent. According to HR consultant Josh Bersin, it can sometimes cost a company 6 times more to recruit than to upskill and promote from within.
The cost of recruiting a mid-career software engineer earning $150,000- 200,000 per year can be $30,000 or more when taking recruitment fees, advertising, and recruiting technology into consideration. This new hire also requires onboarding and has a potential turnover of two to three times higher than an internal recruit.
“By contrast, the cost to train and reskill an internal employee may be $20,000 or less, saving as much as $116,000 per person over three years,” notes Bersin.
Organizations can also cost out the hours they provide in training and provide this transparency to employees. This can reassure employees that they have selected an environment that wishes to foster a learning culture, as knowledge and skills acquisition is not only part of the job but also part of the compensation.
Labor shortage also includes leaders
In an age of robots, machine learning, and automation, do we need leaders anymore?
Ironically, strong leadership, creative problem solving, and communication skills are still in demand.
According to LinkedIn Learning’s 2020 Workplace Learning Report, 57% of L&D professionals are focused on developing leadership and management skills. Further, over half of the executives surveyed for Deloitte’s 2021 Global Human Capital Trends report suggested that skillful leadership is vital to navigating the unknown futures ahead.
But the skills needed for today’s leader are different from years ago. In the past, many organizations used “positional leadership,” or the concept that people led through the power of their intelligence, title, and job level.
However, times have changed. “Today great leaders drive change through their reputation, ability to empower people, willingness to experiment, and focus on developing people and their teams,” notes HR consultant Josh Bersin.
Companies have discovered that they need a new breed of leader—because the very definition of “leader” has changed. Every professional, whether full-time, part-time, or even outside contractor can be thrust into a leadership position. Leaders do not necessarily need to have a job title—supervisor, manager, team lead, etc.—but yet they can hold positions in which they demonstrate leadership.
L&D can insert this nuanced leadership into training programs to ensure that employees are acquiring the critical leadership training that their organizations need.
Shifting priorities in the organization make it more challenging than ever to keep L&D aligned with business goals. If your L&D strategy is in need of an overhaul, download this L&D strategy toolkit for guidance.