Why investing in workforce skills is a win-win for employers and employees
Find out why focusing on skills pays off, for both your people and your business
New year, new skills? That’s what leaders are hoping for, particularly as technological advancements begin to shift the capabilities that employees will need most. 77% of employers now have difficulty filling job vacancies due to a lack of qualified candidates, marking the highest talent shortage in 17 years.
As the competition for talent with in-demand skills intensifies, many leaders are shifting their focus to their existing workforce and looking to build pathways to help employees level up their expertise. While some executives may be cautious about investing in skill-building amidst market uncertainty, there are many reasons why developing upskilling and reskilling strategies is a smart decision, both for your business and the people who work for it.
The spotlight is on building workforce skills
Skill-building has always been important but recent events have turned it into a necessity for business survival. Now that we’re in the Fourth Industrial Revolution—a time in which AI and automation are revolutionizing the way we work—everyone needs to hone new capabilities so that we can successfully collaborate with emerging technology.
Since the pace of change is accelerating and the half-life of skills is shrinking, developing new competencies can no longer be an afterthought. Instead, research points to upskilling and reskilling as prerequisites for success. The World Economic Forum predicts that half of all employees will need reskilling by 2025 as the adoption of new technology accelerates.
While the rise in AI and automation won’t push employees out of the job market as people once feared, The World Economic Forum predicts it will create as many as 69 million new roles. Although that’s good news, these jobs are going to come with new sets of required knowledge, which is where the increased need for building workforce skills comes into play.
3 reasons why investing in workforce skills benefits your business
There are several reasons why investing in building new workforce skills is a smart decision, including the following advantages:
#1. Bridge skill gaps that slow your business down
If your organization doesn’t have the critical skills needed to perform various business functions, you’ll constantly be scrambling to do the research, look things up, and rely on the same talent for support—which only works for so long and quickly becomes inefficient.
Rather than letting skill gaps delay essential work processes, leaders must create a systemic way for employees to build in-demand skills. Executives need to be aware of potential skill shortages so they can address them before these gaps lead to serious inefficiencies.
#2. Minimize external hiring costs
Most leaders know that hiring processes come with a high price tag, especially if the role they’re looking to fill is in high demand. Overall, it is 1.7 times more expensive to recruit, train, and onboard talent from outside your organization.
Businesses that prioritize skill building can often sidestep these expensive talent acquisition processes through internal mobility. When a vacancy emerges, HR leaders can identify employees who possess most of the skills they’re looking for and efficiently upskill or reskill workers so that they can hire and promote from within.
#3. Become a destination for growth and development
Access to skill-building opportunities is one of the top motivators that inspires employees to stay with your business and perform to the best of their abilities. Since 63% of employees who left a job within the last year cited a lack of professional development opportunities as one of their primary reasons for leaving, it’s evident that employees won’t stay at organizations where they feel like their career options are stagnant. With 77% of workers saying they’re eager to learn new skills, it’s up to leaders to give their people the growth opportunities they’re asking for.
3 reasons why investing in workforce skills benefits your employees
In addition to helping the business, increasing access to skill-building opportunities has an array of benefits for employees, including:
#1. Fulfill employee ambitions
Every employee wants to feel like they have the tools and pathways needed to take their careers to the next level. When organizations develop comprehensive upskilling and reskilling strategies and ensure all employees have access to them, their workforce will in turn feel more invested in the business, loyal towards their organization, and inspired to take advantage of these opportunities. The more employees grow with their company, the more likely they are to view it as a great place to work.
#2. Ensure employees’ skills stay relevant
The proliferation of AI and automation is shaking up the skills employees need to be successful in their careers as well as changing the roles that are most pivotal to business success. As AI advances and takes on some of the tasks workers currently perform, certain skills will become less crucial while there will be a rise in demand for other capabilities. People who take advantage of the skill-building opportunities that their workforce provides can ensure they’re honing new capabilities that will keep them relevant and in demand as an employee.
#3. Cultivate a sense of connection among coworkers
Learning should be a collaborative process. At many leading organizations, employers use talent marketplaces to connect their people to an array of skill-building opportunities, including projects, gigs, full-time roles, and mentorships.
All of these experiential forms of learning give employees the chance to connect with colleagues they may not typically have the chance to work with and broaden their institutional expertise. Participating in cross-functional collaboration opportunities will cultivate a sense of camaraderie while simultaneously helping employees to develop important soft skills like coaching, communication, and conflict resolution.
How can leaders launch an impactful skill-building strategy?
Given the benefits for both employees and employers, it’s easy to understand why skill-building is rising to the top of many leaders’ agendas. While there’s no one-size-fits-all strategy for successful upskilling and reskilling, there are a few steps executives can take to set their people up for success.
Many leaders are harnessing skills intelligence tools like Gloat’s Skills Foundation to gain an in-depth understanding of the skills their people possess, the knowledge gaps their organization has, and the capabilities that they’ll need to build to bridge them. Once leaders gain these insights, they can tap into a talent marketplace to reallocate talent based on shifting priorities and increase access to skill-building opportunities across their organization.
The talent marketplace can generate suggestions for projects, gigs, full-time roles, and mentoring opportunities that will help employees build the skills they wish to hone and the capabilities the business needs. These experiential learning opportunities will help employees develop more confidence in their abilities to execute key tasks, expand their professional networks, and reinforce the content-based lessons they learn in their L&D curriculums.
To learn more about what managers and employees expect when it comes to building critical capabilities, check out our research report on workforce skills.
