Digital transformation is changing the way organizations work in the U.S. and around the world. New technologies, such as artificial intelligence (AI), and new methodologies, such as agile, are rippling through global workforces. In the race to acquire the necessary competencies, some companies are turning first to hiring and others to outsourcing. Meanwhile, many employees, especially those in remote locations, are left behind or high and dry.
The best way to gain the digital capabilities that global organizations demand actually lies in training existing teams. Here are three reasons why.
1. Training Cuts the Cost of Turnover
Hiring or replacing employees is expensive and unreliable. The Center for American Progress estimates that talent acquisition can cost an employer 21% of the employee’s salary, and the Work Institute’s “2017 Retention Report” estimates the average total turnover cost to be $15,000 per employee in the U.S.
Hiring new talent is an unreliable solution for filling skills shortages. In the Society for Human Resource Management’s 2019 report “The Global Skills Shortage,” 75% of human resources (HR) professionals who reported having difficulty recruiting said there is a shortage of skills in job candidates.
One hidden cost of turnover is lost business opportunities. In some countries, key technology sectors suffer an average attrition rate of up to 30%, according to John McManus, Mingzhi Li and Deepandra Moitra’s book “China and India: Opportunities and Threats for the Global Software Industry.” Some global corporations contracting for technology services have cited this high employee turnover for their unwillingness to send high-value work to such regions.
The potential for turnover is pervasive almost anywhere. A 2015 Gallup panel found that 51% of employees were actively looking for a new job. Employee development is a major factor driving this turnover. According to Gartner, in 2018, 40% of employees who left their organization did so at least partly because of “the lack of future career development” there.
2. Training Prepares and Motivates Employees
Job skills are more dynamic than ever. More than half of all employees will require significant reskilling and upskilling within the next two years, warns a World Economic Forum report.
In a 2017 survey by CareerBuilder, two out of three employers said “they are concerned about the growing skills gap.” A majority of workers themselves admit they lack the skills necessary for digital transformation. In Gartner’s 2018 “Shifting Skills Survey,” 70% of respondents “said they haven’t mastered the skills they need for their jobs today,” and 80% said they have neither the skills they need for their current role nor the skills they need for their future jobs.
Improving employees’ skills also motivates them to remain on the job, since it provides a personal sense of accomplishment and professional growth, provides more novel experiences within the company, and enables transfers between departments or promotions to more lucrative roles.
3. Training Attracts Future Global Talent
Training is especially helpful for attracting new talent. In a survey by Josh Bersin and LinkedIn, 86% of global respondents rated the “opportunity to learn” as one of their top reasons for accepting a new job offer. In addition, in Ceridian’s 2018-2019 “Pulse of Talent,” 86% of employees said it’s important for organizations to provide training opportunities.
Training Global Employees Is a Priority: A Final Note
Bringing global employees up to speed on new and emerging digital technologies is now an imperative for future-looking organizations. LinkedIn Learning’s 2019 “Workplace Learning Report” states that one of the top seven focus areas for talent development in 2019 was to “provide consistent and valuable learning to employees globally.”
In doing so, SHRM advises, organizations should be savvy about differences in learning practices in the countries they operate in. These differences include preferred learning methods, the popularity of mentoring or live virtual classroom instruction, and the technological requirements of e-learning in remote locations. It’s also important to take precautions to accommodate cultural or linguistic differences to avoid confusion during the learning process.