In this second article we’ll explore how the current skills gap is playing a role in the increased need for corporate L&D.
According to recent U.S. Bureau of Labor and Statistics data, we currently have 10.6 million jobs unfilled despite a 4.2% unemployment rate. Recruiters everywhere are struggling to fill roles, which suggests that despite the millions of able-bodied workers seeking employment, employers are struggling to find candidates who have the skills their jobs require.
The causes of the gap are varied and include internal forces like unconscious bias, unrealistic expectations, and narrow recruiting practices as well as external factors like rapidly-changing technology and the present-day American opioid crisis (HR Dive).
Regardless of how the skills shortage came about, companies must find ways to overcome it in order to reach a fully-staffed and functional state. They can certainly look at options like casting a wider, more inclusive recruitment net, but by far the best strategy for closing the skills gap is to develop and execute a robust, company-wide L&D program.
Chances are you’ve been hearing the words “upskilling” and “reskilling” a lot lately. While related, the two terms have slightly different connotations. Upskilling deals with teaching employees new skills to keep up-to-date with best practices in their current role, and reskilling is the name for teaching employees new skills so they can take on a different role (Go1). In either case, they are L&D functions, and their primary goal is to close the skills gap with employees who are already on the job.
Why is reskilling or upskilling current employees through L&D a better strategy than simply hiring new talent? The reasons are plentiful:
- As mentioned, finding people “out there” with the knowledge and background you need is becoming increasingly difficult.
- Studies indicate that a large percentage of employees (approximately 50%, including management) will have to be retrained in the next five years (Dashe & Thomson).
- Companies spend multiple thousands of dollars on each new hire through the recruiting, hiring, and training processes, including the inevitable productivity gap between hiring and fully onboarding and integrating new employees. If you’re going to spend money on training anyway, why not spend it on existing employees who are already functioning members of your team (Protocol)?
- Over a third of all new hires quit within their first year. When you compare that timing with how long it takes to become a productive employee, which is between 8 months to 2 years, recruiting new team members can be expensive and frustrating.
“Remember”, says Suneet Dua, PwC’s US Products & Technology Chief Revenue and Growth Officer, “an employee who’s worked for your organization for years has an in-depth understanding of both your culture and your customers. Their institutional knowledge makes them comfortable with your corporate structure and adept at using your company’s tools, systems, and vocabulary” (Protocol).
The best way to implement a strong L&D strategy is to tackle the most pressing needs first. Management and HR can provide useful data metrics to target mission-critical areas and identify high-value skills that are imperative for business success. These areas should be where you focus most of your L&D efforts in order to close any skills gap your company may be experiencing.
Understanding the people analytics of your organization is invaluable.