The skills gap in business is real, and hiring talent isn’t doing enough to solve it.
According to the “New Talent Landscape: Recruiting Difficulty and Skills Shortages” report by the Society for Human Resource Management (SHRM), about two out of every three human resources (HR) professionals surveyed had a hard time hiring for full-time jobs in 2016—up from 50 percent since a similar report in 2013.
President and CEO Hank Jackson says this is largely due to a lack of skills and required work experience. According to the SHRM research, 84 percent of HR professionals reported seeing applied skills shortages in job applicants over the last 12 months.
In a recent annual survey of employers, Deloitte and the International Society of Certified Employee Benefits Specialists (ISCEBS) remarked, “The shortage of qualified talent and the skills gap has emerged as the biggest challenge facing employers over the next three years.”
This skills gap continues to widen, despite the available pool of domestic and H1B job applicants. How can employers expect to fill their needs for such capabilities in emerging technologies?
The answer lies within. More and more smart companies are training their existing employees to acquire the skills they need in the technologies and disciplines that are critical to their evolving business objectives.
Use training strategically to fill skills gaps
As technologies rapidly evolve and corporate initiatives change, talent development is proving to be a faster and more cost-effective solution than talent acquisition.
Certification-level training takes a typical investment of only $1,100 per employee. Meanwhile, the direct and hidden costs of hiring someone new averages 20 percent of the annual salary for that mid-level position, according to a 2012 analysis by the Center for American Progress.
Compared to recruiting, bringing existing employees up to speed on new software or related business skills such as cloud computing or digital marketing makes good business sense. Here are some strategies for making it work.
Upskill and backfill
Upskilling and backfilling involves enriching the technical capabilities of your most productive employees and promoting them into more critical positions and replacing them with new hires in lower-risk roles.
Rather than turning outside to find a new employee who has the specific skills you need, first consider if the desired skill really warrants creating a new full-time position. Instead, could any current employees be able to learn those necessary skills?
If the answer is yes and you find internal candidates who are ripe for upskilling, you can free their time by offloading less-strategic duties on to other promotable employees, or even backfill their roles by hiring junior positions.
In addition to saving time and money, this upskill and backfill process maintains established corporate culture, enables uninterrupted employee productivity, and provides other benefits to your organization, including:
- Improved employee engagement and retention by building self-esteem with a culture of higher promotion potential and refreshingly novel or challenging responsibilities.
- Better company brand reputation (on employer review sites like Glassdoor.com) as a place for career development and longevity for future candidates.
- Reduced dependency on outside consultants or vendors for necessary skillsets.
Nurture employees for future roles
Organizations can use training programs to create a pool of promotable employees as a long-term strategic solution.
By analyzing your company’s history of growth or attrition, “it’s possible to predict that specific openings will occur at a predetermined period in time,” says Hemant Kumaarr, an HR professional at ESQ Business Services, Inc.
That’s how talent development can become part of your talent acquisition strategy. As Kumaarr notes, “[Training] enables you to recruit today for positions that do not even exist today but are expected to become available in the future.”
Leveraging the tried-and-true concept of “on-the-job training,” you could hire at entry level, then upskill from within, and promote to new roles as the anticipated skills become necessary.
Providing training opportunities to employees also lets you guide which new skills your workforce should develop. Target skills to meet your company’s immediate gaps or to build toward projected growth or anticipated vacancies. This also lets you focus employees on training that is useful within your organization, rather than having them spend their time learning skills that are more useful elsewhere.
Manage “key person” dependency
Talent development is an essential part of succession planning and reduces your organization’s risk from key person dependency – when one of your team members is solely responsible for an essential skill and there is no back-up plan. By having multiple employees trained on the same skills, the company can avoid losses of output and institutional memory should any one person leave or become too ill to perform critical functions.
When planning for possible successors or additional team members to perform a critical function, it’s important to choose staff members who have comparable roles. For example, you wouldn’t necessarily want someone from accounting to manage your cybersecurity, or vice versa.
Organizations should take the necessary precautions to make sure team members do not feel threatened by having fellow employees trained in the skills. This is one reason why it’s wise to make this type of training part of a larger talent development initiative, where multiple employees are engaged in training on various skills that are complementary to other departments.
Improve engagement and productivity
In addition to future-proofing your organization, cross-training employees in the skills and processes used by other departments benefits business operations in many ways.
Cross-training builds engagement by adding new knowledge and variety to job tasks. It also improves cooperation between departments by enabling symbiotic team members to understand their business processes and appreciate each other’s roles and efforts better than before.
Plus, cross-trained employees are more productive. Employees who feel they have good work-life balance work 21 percent harder than those who don’t, according to a survey of 50,000 private- and public-sector employees worldwide by the Corporate Executive Board.
Prevent skills decay with applied learning
Compounding the problem of fast-changing skills requirements, existing skills fade from lack of use. Newly-learned skills can also fail to take hold, especially if they aren’t practiced or applied in real-world exercises while being learned.
As quoted in the Wall Street Journal, Eduardo Salas, professor of organizational psychology at the University of Central Florida, says skills decay is a big problem. “The American Society for Training and Development says that by the time you go back to your job, you’ve lost 90 percent of what you’ve learned in training,” says Salas. “That’s why you need to reinforce. If you learn something and you don’t have the opportunity to practice, eventually you are going to lose it.”
One of the most important elements that talent development and other training designers can add to their courses is an applied learning component. Applied learning projects give employees the opportunity to put the skills they’re learning into use by solving practice problems relevant to their industry and work. Examples of applied learning projects include:
- Case studies
- App development
- Peer reviews
- Market analyses
- Solution scenarios
Authentic tasks like applied learning activities not only provide motivation for trainees to use what they’ve learned; it can equip them with skills in social interaction and collaboration. In many cases, the materials that employees create in their applied learning projects may be immediately useful in the performance of their actual jobs.
Establish a learning culture
When done right, training can promote a culture of continuous and progressive learning that motivates the employee to strive for additional courses, higher training levels, and even certifications. It’s critical to have a training program that provides opportunities for growth beyond the learning of basic skills. Providing a clear learning path—from foundation courses to more advanced and specialized levels—offers many advantages, including:
- Inspiring trainees to see what is possible within the training program as well as their career path and aspirations,
- Establishing a quantitative measurement of success through a structure of prerequisites for advancement to a higher-level course, and
- Reinforcing retention of previously-learned skills.
Training helps retention, not just development
Some employers express reticence about investing in employee training for fear that they will take these new skills and use them at another company. On the contrary, statistics show that providing new skills through talent development actually increases employee retention.
A study by the Hospitality Industry Education Advisory Committee (HIEAC) in British Columbia reported that “40 percent of employees who receive poor job training leave their positions within the first year, [citing] the lack of skills training and development as the principal reason for moving on.”
As Henry Ford, founder of Ford Motor Company, professed, “The only thing worse than training your employees and having them leave is not training them and having them stay.”