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The economic case for reskilling staff

Many businesses are reluctant to implement reskilling and training for their employees or do so in a way that isn’t strategic and meaningful. Some may be concerned about cost, or there may be a lack of clarity about where training may be required. Expanding your business’ capability and skillset is often thought of through the lens of hiring new staff and nurturing and developing the talent currently within the organisation is rarely considered the solution. McKinsey & Company however published a report in November 2020 analysing the economic case for reskilling and their findings were conclusive. They concluded that it is economically beneficial for roughly 75% of organisations to reskill an employee yet few companies choose to do so. This is particularly surprising considering that the data from the McKinsey report also found that reskilling increases staff productivity by between 6 and 12 percent. Ultimately a more economic and cost-effective approach can be to reskill existing staff, increasing their ability and, by extension, that of the business. So, taking the findings from the McKinsey report into consideration, how can businesses begin to catch up and successfully implement reskilling into their company culture? Here are some things to think about when implementing a holistic reskilling programme for your organisation:

Be strategic Before beginning to develop a reskilling programme, a business must consider what skills it needs going forward. This must begin by developing a strategic workforce plan which encompasses the mid to long-term business strategy, thinking years ahead to establish achievable and measurable goals. Once a goal has been established, think about what skills will be needed to achieve this goal. What skills do you already have within the company and where do gaps currently exist? It is also important to consider how the retention of staff is key to this strategy and how best to keep employees feeling motivated and valued by the organisation they work for. Finally, it is important to develop scenarios to close the current skills gap within your business through effective and integrated training. It is only through strategic workforce planning that you will be able to fully maximise the benefits of reskilling.

The right training Before undertaking any training as part of the reskilling of employees it is important to understand how the impact of this training will be measured both initially and in the long-term. This will help to ensure training has been worthwhile for both the business and the employee. Modular reskilling throughout the year may be the answer here as due to its nature it promotes a greater sense of integration within the day-to-day running of the business, rather than a few weeks of training every year as an afterthought. The best way to reskill effectively is to ensure that reskilling is tailored, both to the industry you specialise in as well as the role of the employee. You can take your reskilling a step further by choosing to optimise training to best fit the way that individuals within your organisation learn. If there are people within the business who learn best through ‘doing’ then find ways for them to learn on the job, likewise if there are employees who prefer to learn in a more traditional method then partnering with other organisations and utilising the knowledge of external speakers and facilitators may be more suitable.

Transform your learning culture Especially amongst more established employees, there may be some cultural resistance to a reskilling programme. This is an understandable reaction and may require a more holistic effort to change your business’ culture surrounding reskilling. It is important however to implement a reskilling strategy that encompasses everyone within the organisation including the leadership team. This is important to not only optimise the benefits of reskilling those at the top of the organisation but also to set an example to other members of staff of its value and importance in achieving short-term and long-term goals. It would be naive to think that just because reskilling becomes the default across the business that all employees will see the value in the initial phases, one way to combat this to clearly emphasise how this process will lead to career development and advancement down the road. It may also worth considering ways of incentivising managers and other members of staff to ensure that reskilling remains consistent and its benefits are being regularly measured. It is of course easier said than done to reshape the training culture of your business and implement an effective and well thought out reskilling strategy, but with a potential 6 to 12 percent rise in productivity on offer, can you afford not to try?

Think long term and economy wide This year has brought a myriad of changes to working life, not least the proliferation of working from home due to the pandemic. However, this has only emphasised existing trends towards remote working and, more importantly for our purposes, the use of digital technologies to facilitate working and economic activity. With technologies like AI, cloud computing, and ever-more advanced data crunching in the ascendance, certain business functions and operations will likely be changed irrevocably or even wholly automated within the next ten years. Facilitating regular training and reskilling will allow your workforce to become proficient with any new technologies, allowing your business to move quickly and implement them as they arise. If you are at the forefront of industry-wide software, technologies, and practices you will be far better position against front-running competitors than if you’re multiple steps behind. The case for reskilling doesn’t neglect the benefits of hiring but ensures an effective strategic workforce plan is in place to combine the benefits of new staff whilst optimising the potential of those already in your organisation. Through our management, learning and development, and HR support services minc can work with your organisation to implement an effective workforce plan than supports your objectives over the coming months and years. For a free consultation, get in touch here. Furthermore, those interested in reading the full McKinsey & Company report, can do so here here.

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