In the face of critical skill gaps, talent scarcity and digital disruption, the demand for new and improved skills has led to an increased focus on upskilling of current talent. According to McKinsey and Company, 87 percent of business organizations are currently suffering significant skill gaps, while research from the National Skills Coalition says one-third of today’s workers lack the foundational digital skills needed for the future.
To meet these challenges, leaders must pick up the pace and get more intentional about upskilling their workforce. Upskilling current talent is more cost-effective than hiring new employees and makes it easier to attract and retain talent. For example, an overwhelming number of employees say upskilling opportunities can increase their job satisfaction and the overall likelihood that they’ll stay with an organization. Tech professionals in particular cite a lack of mobility and skill development as a primary reason for leaving an organization.
While most organizations recognize the importance of upskilling, many leaders fall short by relegating development responsibilities to HR or L&D.
Here are five key actions leaders can take to step up, ramp up and ensure the success of upskilling efforts.
Identify the skills needed for your organization to thrive. Leaders should consult with stakeholders across the organization and think together critically about what skills are becoming outdated, what skills are in short supply and what skills will be needed to move the business forward. As part of a future-fit agenda, financial leader HSBC used a workforce intelligence solution to identify current skills and understand where they needed to strengthen capabilities. Hamish Nesbit, group head of resourcing, says this effort provided “a stronger platform to think about increasing our internal mobility, which in turn retains our global corporate knowledge and builds employee engagement.”
Not sure where to start? Increasing employees’ general digital literacy is generally considered necessary groundwork for more advanced skills-building. For instance, research from the National Skills Coalition says about 92 percent of today’s jobs across every industry require digital skills, and one-third of workers don’t have the foundational digital skills necessary to enter and thrive in those jobs.
Invest time and money for development. Upskilling initiatives require financial investment, whether through tuition reimbursement, paying for certifications or paying someone to simply learn on the job. As an example, the leadership team at Seagate invested more in strategic workforce planning, mentoring and succession planning to strengthen internal, future-ready skill sets and avoid layoffs during the height of the COVID-19 pandemic. Patricia Frost, chief human resources officer, says: “We decided to grow new operations from within.” As a result, the company was able to fill 30 percent of their full-time roles internally. In addition, the investment paid off by saving $13 million from reduced external hiring costs and saving $20 million from minimized termination costs.
A time investment from leaders is also a critical success factor since mentorship programs and leadership training are integral to most effective upskilling programs. Consider Singapore-based financial institution DBS, known in some global circles as the “World’s Best Bank.” As part of its commitment to build the long-term career of its people, each of its more than 10,000 upskilling programs has a business sponsor who provides direct access to participants. Today, one out of four vacancies in the bank are filled internally due to its strategic people agenda and distinctive leadership culture.
Prioritize continuous learning. Leaders must create an environment that celebrates learning and links learning to opportunity. To that end, leaders across all levels should actively demonstrate a commitment to their own continuous learning and development and make learning conversations part of their everyday work. Since employees frequently complain that managers do not allow enough time for learning, companies like Allstate supplement managers’ performance measures to include “time to learn.”
Effective upskilling solutions also integrate skills taxonomy and skill practice into existing workflows. To promote employee engagement and buy-in, provide collaborative, social learning networks and the use of newfound abilities in real-world settings. Unilever utilizes an AI-enabled talent marketplace, known as FLEX experiences, to automatically connect workers with training, mentorships and projects that align with personal and organizational goals.
Ensure equitable, easy access to upskilling opportunities. Research from Gallup shows that many upskilling opportunities are disproportionately offered to the highest-skilled workers while many of those who express the greatest desire to learn are the least likely to have participated in opportunities. For instance, 54 percent of employees in computer and mathematical-related occupations participated in an employer-provided upskilling program compared to 19 percent in transportation or moving services. This suggests many upskilling programs are, in effect, “skilling the skilled” rather than being offered to those who would benefit most from developing new skills and advancing their careers.
When considering inclusive access, keep in mind that minorities, women, younger workers, and workers with lower education or income were most affected by job losses during the pandemic. For those groups, upskilling is essential to preventing further job erosion and helping with reentry into a digital workplace.
Measure progress and collect continuous feedback. Part of any good upskilling strategy includes a continuous feedback loop so that leaders can determine if their programs and processes are effective. While measuring the precise payoff of upskilling can be challenging, performance indicators like employees’ productivity levels, satisfaction and retention rates, and successful application of newly acquired skills can be used as metrics.
In general, use tracking systems to answer such questions as:
- Are employees taking advantage of opportunities?
- How much utilization happens across the organization?
- Do employees view upskilling resources as relevant?
- Are skills gaps closing because of the participation in upskilling opportunities?
- How are newly acquired skills impacting the business?
Final thoughts
The skills shortage doesn’t show any signs of easing up. It could take decades for today’s employees to be ready for the future if the current pace of upskilling doesn’t pick up. Practices promoting a renewable, upskilled workforce enable employees to successfully redeploy to new roles and help businesses increase productivity, improve morale, lower hiring costs and enhance their brand reputation. While upskilling is no quick fix for closing skill gaps, now is the time for leaders to double down and tip the scale toward a more future-proofed talent pipeline. Harness the power of upskilling in your organization — heed the call and start putting these five actions into place.
