This contributed post comes from David Perring, Director of Research at the Fosway Group, a leading European analyst firm focused on next-gen HR, talent, and learning.
What’s driving the need to upskill and reskill?
Economists think a global recession is looking more likely in 2023. They suggest the chances of recession in the year ahead are between 35 and 50 percent as living standards are squeezed by rising energy prices, the forces of inflation continue to ripple out from the pandemic, interest rates continue to rise, and consumer spending weakens.
Just how deep and disruptive that recession might be is uncertain and is likely to vary from sector to sector and by region. But, regardless of where you are, fiscal pressures will put a fresh focus on radical cost efficiency and organisational agility to deliver exceptional results.
The world and work have become more complicated, still unsettled by ongoing change as a result of the pandemic, accelerating waves of digital innovation, growing pressures for sustainability, and the need to combat climate change. And the workforce is becoming more dispersed and diverse.
How upskilling and reskilling are essential in driving organisational resilience and agility
Just as COVID acted as an accelerator for change in organisations, economic turbulence is causing organisations to more deeply scrutinise their people strategies and how work gets done. Workforce optimisation is now on the agenda — working in tandem with talent and opportunity enablement. These two elements have similar goals but different starting points. While talent and opportunity enablement started from enabling the transparent flow of talent — encouraging employees to unleash their potential – workforce optimisation focuses on enabling the organisation to better align its workforce to its strategic direction.
For most organisations, the need to attract and retain talent has driven the employee proposition. The focus has been on linking people intelligence — people’s skills and aspirations -— to individual goals. This acts as a beacon for other talent as the organisation builds a reputation for developing skills and helping people fulfil their potential. And it’s a people strategy that is helping organisations differentiate themselves as an employer of choice.
Remember, according to LinkedIn, 94 percent of employees would stay with a company longer if it invested in their career development. And those who experienced a move are 24 percent more likely to stay with an organisation that invests in their mobility after three years than those employees who didn’t make an internal move.
As costs and efficiency come into sharper focus, how HR optimises the workforce will be watched keenly by CEOs and CFOs. At the same time, HR teams must maintain a strong employee value proposition. HR can do both because the solutions that enabled organisations to connect work opportunities to their people’s aspirations and drive people’s careers through internal mobility are also the ones that drove workforce optimisation.
How are organisations transforming upskilling, reskilling, and cross-skilling?
And this is how organisations are in one breath transforming upskilling and reskilling: by using talent and opportunity marketplaces to energise colleagues to grow their skills by linking them to mentors, learning and new initiatives, projects, gigs and the work organisations need to get done, whilst at the same time releasing and harnessing that energy to deliver new results.
It’s a triple play. Develop new skills, get more work done, and engage people to stay longer. And what makes it even more powerful is that despite the looming recession, the need to attract and retain good people is high. There continues to be a talent shortage, according to a range of studies:
- 99% of retail business leaders are concerned about talent shortages
- UK unemployment falls to the lowest level in nearly 50 years
- 47% of employers have hard-to-fill vacancies
- The top response planned by employers to overcome recruitment and retention difficulties is to upskill existing staff (41%), followed by advertising more jobs as being flexible (35%)
And the reasons for attracting and retaining the best are compelling, too. Across most tasks, high performers are between 125 and 800 percent more effective than average performers. Skills-centred organisations bring transparency and connections and proactively engage people in future challenges so that both individuals and organisations can succeed. This also enables them to be more inclusive and deliver on diversity goals.
The challenges of becoming a skills-centred organisation
Now, that all sounds amazing. But what are the challenges of bringing upskilling and reskilling alive against the backdrop of talent mobility?
Becoming a skills-centred organisation is about change management and engaging people and their managers to think differently about work. It’s about empowering managers to let go of command and control and to not feel threatened by simultaneously losing their span of control whilst at the same time helping them adjust to more people being involved in their projects.
There are also challenges in understanding and validating skills in some solutions so validating your skills ontology is an important step and artificial intelligence (AI) has a role in doing the heavy lifting.
By inferring skills and understanding skills adjacencies and transferability, AI can detect the signals that would indicate a person was a good fit for another role. And it can do this at scale. However, understanding how you are going to verify skill levels can also be a challenge, not only of individuals, when you want to have some assurance about expertise, but also when it comes to matching learning to skills. Again, the AI can do some heavy lifting, but some human verification might be needed.
And finally, consistency and sharing skills across platforms remain a challenge. HR systems don’t have a universal approach to sharing skills, and many want to bring their skills ontology to the table as the default choice. The lack of granularity and the inability of some platforms to share skills can also be debilitating. So, you will need good answers from your technology providers around these questions as well as their support in the change-management process if you want to succeed with as little pain and as fast a gain as possible!
Change is driving the skills agenda, and for employers, there are plenty of opportunities to build agility and resilience through upskilling and reskilling employees. Innovations in artificial intelligence provide organisations with opportunities to do just that — and at a speed and scale, like never before.
David Perring is the Director of Research at Fosway Group, where he independently explores the experiences of practitioners and suppliers to understand the realities of what’s happening in corporate learning, talent development, and HR.
Ready to learn more? Here’s our overview of skills intelligence to support business strategy.