A workforce equipped with the exact competencies needed for a business to remain robust in an uncertain economy is any CEO’s dream. So why is it so hard to achieve?
When the global pandemic hit in early 2020, the effects were immediately - if unevenly - felt across all industries, as unemployment rates skyrocketed. Businesses closed under the strain of lockdowns and decreased revenue. Fast forward to the end of 2021, the global economy is starting to turn around, companies are eager to rehire their workforce and launch initiatives to make up lost financial ground.
The world of work has changed due to the significant acceleration of automation and digitization across all industries. Companies still struggling with vacancies are battling to fill critical roles due to a lack of correctly-skilled candidates.
Those rebuilding their workforces need to apply strategic, data-driven approaches that align with these changes.
Many companies are now at a crossroads where they face several essential questions: What roles are integral to company success now and in the future? What core competencies are necessary for these? Is there a way we can define and standardize the skills our staff need for business success?
Creating 'codified skills' is organizational-speak for the process of identifying and standardizing key competencies underlying the most important roles within a company and, wherever possible, creating internal ways of measuring and training for these competencies.
In its most precise form, this involves not only designating a priority skill but determining a concrete level of proficiency needed in that skill for an employee to execute their role optimally. Companies can then utilize their codified skills as the basis for forming a workforce that possesses the competencies they need. And, ideally, they can use the people they already have to fill these in-demand roles.
A rudimentary example: A company decides that a particular role requires "80% proficiency in the Google Suite" - that is the codified skill - and for this company, an 80% means a working knowledge of Google Docs, Sheets, Slides, and Forms, but not necessarily Google Jamboard.
Focus on the skills, roles, and jobs you need to grow to deliver on your company strategy. A critical first step is a process of identifying a handful of the most high-demand roles needed to be successful in the future. These roles will vary significantly by company and by industry - and it is crucial for company heads, HR, and other stakeholders to work collaboratively to identify and, if necessary, create these roles.
The next step is mapping the competencies necessary to execute the key roles correctly - to create codified skills. These likely include a combination of hard skills and soft skills: Hard skills are skills that can be both taught and measured, and include technical skills - project management, data analytics, IT, product ownership, or UX/UI design, for example. Soft skills may be harder to quantify but are equally important; these include communication, innovation, time management, and the ability to manage conflicts.
How proficient is "proficient," exactly? Companies need to decide on a way of assessing or otherwise measuring these key skills and what necessary "level" of skill will yield success in the roles it relates to. Is it time to merge your recruiting team(talent acquisition) with those leading L&D in your HR function?
The process of creating a set of codified skills for key roles involves not only understanding workflow in the current setup but also anticipating and forecasting future trends (such as, say, the broad adoption of specific SaaS platforms or the diminished utility of certain non-digital processes) that may impact company product and workflow.
Note that codifying skills should be a mindful process, not just a list of search terms for a future recruitment post on a job board. Overly restrictive, keyword-stuffed, and carelessly-worded job descriptions can prevent potentially qualified applicants from ever having their résumés seen (and considered by HR).
Such a haphazard process also obscures the skills of the current talent pool available to a company, keeping those in a position of hiring from evaluating the competencies of their existing workforce and thus missing opportunities to provide training for minor adjustments to current positions that may meet company needs.
The real impact on a business unit’s productivity happens when a company views the team’s collective competence, and doesn’t focus on upskilling individual employees. Look at the departments in your company and map out the skills a team of people need to have to contribute not just to company success but the success of other departments. One thing is sure: at the beginning of pandemic as digitally wobbly employees started remote working, IT departments were grateful to companies who had digital skills at the heart of their L&D plans.
A 2019 study revealed that, at the time, 59% of corporations preferred to hire brand new employees to fill in-demand roles, looking outside of their existing employee pool for talent. It’s unlikely this study would produce the same results today.
With current high levels of unemployment or under-employment, companies can’t assume they can immediately snap up a candidate with a particular set of skills from a large available labor pool. They will waste valuable time and resources, slowing their productivity by initiating a new head-hunt every time they need to fill a critical role.
In addition, these companies put themselves at a competitive disadvantage by creating a pattern where they must repeatedly halt their processes while recruiting employees with the relevant skills to keep up with an ever-evolving digital landscape.
The inefficiency of trying to hire anew routinely is demonstrable by the sheer number of companies trying to stay afloat while searching for staff with a bespoke combination of skills. As a result, these companies lag in productivity, with roles staying vacant far too long—inhibiting growth and productivity on multiple fronts—all for want of available candidates with the desired skills.
A more cost-efficient route is to create pathways for existing staff to acquire skills in-house. The knock-on effect is a higher retention rate of employees with existing abilities and legacy knowledge vital to company performance. This is why savvy, forward-thinking companies focus on upskilling and reskilling their current workforce instead of hiring out. Upskilling - that is, learning additional skills to improve performance in a current role, and reskilling - learning skills to do a different job within the same industry, are increasingly emerging as preferable alternatives to hiring.
This is backed up by LinkedIn’s 2021 survey of learning and development priorities in the workplace: When professionals globally were asked about their most important areas of focus in 2021, upskilling and reskilling topped the list.
Of course, hiring outside is a great way to bring in fresh thinkers and staff who have different ways of doing things gained from diverse experience at other companies. Codifing skills is a win-win here too. Onboarding new employees can be done through an upskilling lens, which means everyone who joins the company immediately receives the skills training they need to meet company business goals.
This approach also opens up a wider pool of candidates, as you can recruit on ability and skillsets, not limited by extensive requirements which don’t prove someone can do the job you need them to do. Even the smartest software engineer is not going to accelerate your tech objectives if s/he lacks the soft skills needed to work cross-functionally.
After creating a set of codified skills (and, preferably, ways to measure these skills), companies must institute clear pathways for their employees to learn these new skills and apply them productively within their workflow.
Some of the ways to do that include taking advantage of e-learning platforms, like MOOCs, which host courses in an array of disciplines, and many cases, have links to brick-and-mortar universities. The courses on these platforms offer real-time instruction that can be accessed from anywhere and reward successful students with certificates of completion; they provide an active learning experience that meets students' logistical needs (such as working full time while attending class) and offers tangible, standardized evidence of successful attainment.
Other options include:
It's not only companies with a small workforce (and fewer resources to devote to recruitment and hiring) that are prioritizing upskilling and reskilling employees. Corporations like Amazon and JPMorgan Chase are committing hundreds of millions (and in the case of PwC, billions) of dollars to upskill their current workforces within 3-4 years, retraining workers in non-technical roles to move into technical ones. Northrop Grumman is providing opportunities for employees to spend three months in various positions before choosing one that's the best fit.
The benefits of providing pathways to upskilling and reskilling employees are not merely in avoiding the opportunity cost of a time-consuming and inconvenient (and sometimes expensive) head-hunt; these efforts also provide meaningful incentives for valued employees to stay put rather than being lured away to rival companies or deciding to hang out their shingles.
A recent American study found that only 63% of female middle-managers planned to stay at their jobs for more than a year because of an absence of clear paths for advancement, hitting a ceiling in salary and seniority, or feeling under-valued by management. Thus, upskilling or reskilling their own people to help them advance can provide a much-needed bulwark in the war of employee attrition that many companies are now facing, with employees in whom companies invest training becoming 2.9 times more likely to be engaged and satisfied at work.
Increasingly, employees and employers alike are turning to online learning as it's relatively inexpensive, fairly easy to roll out and offers training in critical competencies over the course of just a few months.
Important to note: MOOCS have been shown to have a low completion rate because of the asynchronous, individual learning style. Cohort-based learning, where employees / learners belong to a group doing the same thing, and can learn from one another in the process, rank most highly in remote learning outcomes.
If this is the route you go, then make sure the training is contextualized for different departments. For example: ‘Learn how to apply human-centered design principles to improve customer service feedback’ resonates more with staff than rather than just offering a course called ‘Learn human-centered design’. The goal should be learning experiences which are designed to integrate closely with the role, so that an employee can apply their new skills immediately to their job.
A recent study showed that 94% of business leaders reported that they expect employees to learn new skills on the job (up from 65% in 2018), with 40% of their employees requiring reskilling within the next six months. Online learning and training uptake is also rising, with four times as many people seeking these types of learning opportunities (of their initiative) and five times as many employers providing these opportunities to their employees.
Employers are clearly realizing the need to meaningfully invest in their workforce: The same study found that companies expect to offer over 70% of their employees opportunities for reskilling or upskilling, with 66% of these companies correctly anticipating that doing so will yield a "return on investment" within one year.
And employees are ready to learn: In a 2019 survey, even before the pandemic, 89% of employee respondents stated that their company "could do more" to provide learning and upskilling opportunities, while 84% said that they would prefer to learn these skills within the context of remaining employed at their current firm, to be able to fill roles impacted by digital transformation.
Companies that are able and willing to provide the pathways for gaining new skills will find employees eager to learn, improve, innovate, and take on ever more senior roles to help businesses succeed. Mapping out and codifying these skills is key to thriving in the new ‘era of uncertainy.’
2022 is about your talent strategy: do you have one, and does it include upskilling your current workforce?