- For many businesses, upskilling is a popular, cost-effective way to manage the current talent crunch.
- First, assess your department’s skills gap. Then, work with HR to define a program aimed at closing it.
- Upskilling mechanisms range from formal university programs to peer mentoring.
Qualified talent is in short supply for many organizations, and when you do find it, oftentimes salary competition pushes it out of reach. In May 2020, the American Workforce Policy Advisory Board said what many business leaders in our surveys have since echoed: American workers need to see “immediate and unprecedented investments” in job training and placements. The message is clear: Upskill your workers.
In industries that rely on knowledge workers, upskilling isn’t just about digital know-how but also the necessary skills that come with automating manual processes to free workers up for higher-value tasks. An entry-level accountant who no longer has to manually enter data now has more time to analyze and interpret it and communicate findings internally. But it’s entirely possible that person never learned such skills in traditional education.
More organizations are turning to upskilling, or continuous learning, to deal with the shortage of knowledge workers. They’re helping current employees gain the skills needed to “grow into” job vacancies and preparing them to move up the org chart. Upskilling lets workers evolve and grow in sync with advancements in technology and business priorities. Often, it’s less expensive than hiring. Upskilling and reskilling — the latter of which refers to teaching “adjacent” skills versus more advanced ones — instead of hiring new talent represents a 6x cost savings, according to consulting firm Accenture.
Though there are many benefits to upskilling, many businesses aren’t on board quite yet. Small and medium-sized enterprises are half as engaged in training programs than their bigger counterparts, according to the international Organisation for Economic Co-operation and Development (OECD). It’s largely because time and financial constraints make developing continuous learning programs seem daunting. There are probably questions at play, too. What if you train your employees to qualify for more advanced roles and then they leave? We’d emphasize the opposing question: What if you don’t upskill … and they stay?
Upskilling is also a powerful employee retention tool. In our recent survey, 43% of employees said management should add or improve in-house training opportunities, and 40% said their company should compensate workers for continuing education.
“Retention is absolutely one of the goals of continuous learning programs, and it should be a metric of success,” says Jude Reser, director of talent acquisition for hotel and asset management firm Atrium Hospitality. “Workers are hungry for new skills that keep them competitive in the job market.”
In 2019, the World Economic Forum predicted that by 2022, 54% of all employees would require significant upskilling. Well, the time has come. Are you facing this challenge head on?
Here’s how to get started setting up a continuous learning program.
Assess your skills gap
Before creating and implementing any upskilling initiative, understand exactly where your organization needs to up its game. This isn’t something to spitball. Conduct an actual skills gap analysis so that you know exactly where to focus your time, financial resources and efforts.
1. Refer to your organization’s strategic goals for the next one to five years.
If you haven’t created any, then maybe it’s time for you to learn some new skills. As in frameworks like objectives and key results (OKR), these goals should be more specific than “grow revenue” or “cut costs.” How will you achieve these goals? Break it down: Maybe you need to double down on upselling existing customers; that’s a different sales skill than getting new logos. If you want to expand into a new vertical, then you’ll need employees with experience in and knowledge of that industry. Want to become a thought leader? You’ll need someone who can distill ideas into content that resonates with your target audience.
“Forecast the skills and knowledge sets that you’ll need, both digital skills and softer skills like leadership or communication,” says Reser. “Recently, our strategy evolved to be more sales-centric. That changes everything: training, the interview process, where we allocate limited resources to align with that direction. You can’t begin to think about upskilling initiatives until you know what you don’t know.”
2. Talk with individual team leaders and critical employees.
What skills do teams need to advance their efforts, and where exactly do leaders think a lack of skills is holding teams back from achieving departmental mandates? Also compare your workforce’s skills with market standards and those of competitors. Are others launching digital initiatives for which your company lacks the capabilities? Is there a growing trend you can’t capitalize on because no one in your company knows how? Are you losing money on manual data entry errors? Are you not moving fast enough due to a lack of automation?
3. Anticipate advances in technology or the market that might impact your workforce.
For example, maybe you estimate that some positions’ tasks will be automated in a few years. That will change your organization’s needs in the future, as well as the skill sets you’ll want in order to meet those needs. For instance, when Walmart set a goal to double down on ecommerce and health and wellness services, it invested in an education effort that taught supply chain and healthcare skills. You probably don’t have Walmart’s resources, but that doesn’t mean you can’t make some market predictions and act accordingly. You can find loads of reports and research that predict the future of almost any industry. Where does McKinsey think your industry is headed? What does the World Economic Forum have to say about the future of the workplace? You’ll likely need to right-size these predictions for your business, as these organizations often advise larger enterprises.
4. Find out which skills specific employees already have.
Have team leads interview employees about any strengths or knowledge they have but haven’t been able to showcase at your business. There are formal cloud-based skills assessment platforms you can use for this, but like any digital technology, they cost money. You can probably get away with those frank conversations with employees or conducting a 360-degree review process in which supervisors, colleagues and direct reports anonymously weigh in on an individual’s performance. Alternatively, use a software platform that serves as both a skills assessment tool and a learning management system on which you can host and track employee education.
At this point, you should know which skills you need and which you already have in-house. Everything in between is your skills gap.
Choose from options for upskilling
In the olden days, continuous learning pretty much meant taking classes at a trade school, traditional college or university, or maybe your odd seminar here and there. Today, employers have a host of educational options to take advantage of — and if you’re keeping pace with trends, then you’ll likely pick a virtual one. Nearly 80% of learning and development professionals said they plan to invest more in online programs in LinkedIn’s 2021 Workplace Learning report, which also noted that Gen Z workers are consuming online learning en masse. Ninety-one percent of workers who can work remotely said they want to continue doing so at least some of the time in a recent PwC report. Self-directed, self-paced upskilling programs that employees can complete at home are growing in popularity.
A few options:
1. Higher education
Lots of accredited universities and colleges have recognized the market for professional certifications. Even Ivy League schools like Cornell and Harvard offer online continuing education programs for career fields from marketing to finance. For workers, it never hurts to have a solid university’s name on your resume. They might earn a certificate in “retail leadership in the age of digital disruption” in a month-long Wharton program that costs $600, or “AI applications for growth” in a two-month, $2,500 program from Kellogg.
Of course, there are also broad-based degree programs, but they might not be specifically geared toward the skills you need. If you just need your employees to learn financial modeling or analysis, you probably don’t want to pay for a full MBA program.
2. Online course catalogs
Video, online content and mobile learning apps are redefining professional development. Platforms like Udemy, LinkedIn Learning and Coursera give employees access to lectures and courses on hundreds of skills at little or even no cost.
Not all of these courses come with some form of certification, but if your goal is just to make sure someone in your organization has the skills you need, then a piece of paper probably doesn’t mean much. Plus, most programs or courses allow employees to work classes around their existing schedules or simply access them at any time, so the convenience factor is high.
Data Analytics and Coding Courses for Finance
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3. Internally-developed training
Years ago, I was the in-house writer for a software company that hired most of its call center employees and junior business development reps straight out of college. These young workers were bright, educated and motivated but often had trouble with written communication. The executive team approached me to develop an in-house training program to teach grammar, syntax and persuasive writing. In both beginner and advanced segments, about 70% of the company’s workforce was funneled through the program.
This course was designed to address a very specific skills gap. Since it became part of my job, the cost to the company was very low. The mandate to take the class came from the highest levels, so team leads made sure to carve out time for their employees to take the class and complete the assignments. All in all, it was a well-executed, effective program.
Internally-developed training can be as simple as peer education or as complex as creating learning modules in a learning management system complete with video, test questions and online lectures. The price ranges dramatically, but the point is that if you want a more hands-on approach, in-house education is worth looking at.
4. Industry association certifications
Looking for project managers? Cybersecurity experts? Digital marketing pros? From tire experts to telecommunications sales reps, you can find certifications from independent industry associations for myriad job functions. Training for these certifications can last a couple of days to several weeks, and costs vary depending on the intensity of the course and market value of the certificate.
This is a good route for companies looking to raise their industry reputations or prove their worth to customers via a slew of acronyms after their employees’ names.
5 Major Business Functions and Their Industry Association Certifications
Managerial Accounting: Certified Management Accountant certification from the Institute of Management Accountants
Financial Planning & Analysis: Certified Corporate FP&A Professional certification from the Association for Finance Professionals
Data Analytics: Associate Certified Analytics Professional credential from The Institute for Operations Research and the Management Sciences
Supply Chain Management: Certified Supply Chain Professional certification from the Association for Supply Chain management
Project Management: Project Management Professional certification from the Project Management Institute
Odds are you’ve got several experts in your company who can share their know-how in a formal mentorship program. We could write an entire article on how to structure such a program, but at its core, mentorship consists of laying out a set of objectives at the beginning, creating timelines and KPIs, having one-on-one conversations and working sessions and providing content for mentees to consume on their own time that will be up for discussion in the next meeting.
Whether you’re grooming a future leader or teaching someone how to prepare a rolling forecast, you’ll find loads of books, podcasts and blogs to inform your objectives for a mentorship program and guide mentors’ conversations.
Not only are you getting an educational program almost for free, but you’re also making sure more seasoned employees pass down the “thing or two they’ve learned over the years” before they retire or leave for greener pastures.
Industry events and conferences can keep employees up-to-date on trends in your market. Conferences come in all shapes and sizes, from small, one-day, regional events that cost a couple hundred dollars to giant week-long extravaganzas in places like Vegas or Orlando with registration prices in the thousands. Many of these events have educational tracks. While talks tend to stay high-level, they’re often full of market statistics and expert insights from well-regarded leaders in your line of business.
Plus, the peer-to-peer conversations and networking opportunities that conferences provide are immensely valuable for both business development and sharing of best practices. You can learn as much, and sometimes more, from hallway conversations as you can in an educational session.
7. Job shadowing
The software company where I taught writing had a core philosophy that every employee needed to have at least some understanding of how every job function operated. New hires listened to customer service calls in the call center, tagged along on business development meetings, learned about product insurance and compliance standards and got a taste of the developers’ pool before starting in their official roles. The process typically lasted six weeks, and by the time new hires sat down at their own desks, they had a solid understanding of how the company worked as a whole. They also had an idea of which department they wanted to wind up in so they could gear their career trajectory toward that end.
You’ll see job shadowing mostly during this type of onboarding process or in some internships, but it can also be highly effective in upskilling current employees. During the process, it’s typical for those being shadowed to teach “shadowees” new skills and allow them to practice, at least on a basic level.
There are three main benefits of job shadowing. First, obviously, is knowledge transfer. While mentorship programs also have elements of this, job shadowing is more holistic and more practical in terms of application. Think about it like an apprenticeship, with more seasoned employees showing others the most efficient, effective ways to do certain jobs, as well as passing on institutional knowledge about the inner workings of an organization. Second, it’s convenient. Workers don’t have to shadow all day; managers can work this kind of arrangement around existing workloads. Third, it’s inexpensive. All you’re losing is a few hours during which the shadower and the shadowee are still getting work done, but maybe not as much as they would if they were plowing through tasks on their own.
Choosing from and pairing upskilling options
If you’re like most companies today, then you’ll probably find that the skills your organization lacks often revolve around understanding digital systems and their capacity for automation and data analytics. If that’s the case, some of the above methods will work better than others.
Pairing some of these upskilling options will offer your employees a more well-rounded experience. For instance, you might suggest employees read a book or attend a conference session on a given skill, then discuss what they’ve learned, gain insight into how that skill applies to the business and get an opportunity to put it into practice. That might involve a certification program, mentoring and job shadowing, for example.
More Resources From NetSuite
Upskilling isn’t the only way to encourage key staffers to stay with your company. Get a toolkit of tactics ranging from focus groups to office hours.
Talent-related KPIs enable you to provide a better employee experience — and some can help you gauge the success of your upskilling initiative.
Tightly align workforce performance to business performance with a single tool that manages human resources, payroll and financials.
Align with HR
As soon as you identify a skills need, initiate a conversation with HR. Like any department, this one is metrics-driven. This team needs to know exactly what skills are needed on what timeline and what “good looks like,” so they can communicate goals and track them across the organization. Work with HR leaders to answer the below questions, or have your managers do so, in order to structure an upskilling initiative that will fill your department’s skills gaps:
1. What is the goal of the program?
Maybe it’s to elevate skill sets for all employees, to prepare some for leadership roles, or to pave the way for a new strategic mandate that requires new knowledge. Again, tie the program to your organization’s strategic mandates so you know how to measure success.
2. Which employees are eligible for upskilling programs, and which platform is appropriate for each student?
E-learning may be appropriate for technical upskilling, while softer skills will probably come from one-on-one sessions with coaches or mentors.
3. Will you give employees time off to attend classes?
In most cases, training hours are paid. Who is going to pick up the slack when employees spend some of their working hours training?
4. How much will you reimburse for tuition or pay upfront for a continuous learning course?
Reser suggests making training a part of the value package that you offer employees at the time of hire or at milestones like promotion. Often, reimbursement for training is tied to length of employment. Some organizations offer reimbursements after a year of employment, for instance.
5. Will there be regular progress check-ins?
Your upskilling program should include pre- and post-training evaluations so you can gauge whether employees have learned the skills you’re targeting. These evaluations should include observation of these skills in action at work.
6. What are the tax implications for employees?
Employees may be able to deduct tuition from their taxable income or receive a tax credit for it. Formulate some guidance you can give to employees who participate in your upskilling program.
7. Will compensation and promotion opportunities be immediately available to trained employees?
Upskilling is more cost-effective than hiring, but you’ll still have to offer some form of compensation. Take into account what the average worker with the desired skills would cost you on the open market. This should be part of an informal contract with the employee: If they acquire X skills and take on Y new responsibility, they’ll get Z promotion. When that occurs, will it hamstring your upskill initiative because the organization will need to use resources to support increased salaries instead?
Once you’ve answered the questions above and worked with HR to arrive at a plan for an upskilling initiative, you’ll endorse the plan by funding it. Then, it’s HR’s job to execute, with your support.
Carving out time for continuous learning
Millions of organizations were forced to downsize over the past two years. Combine this with historically low unemployment, and there’s a dearth of workers in many organizations. Many employees are working longer, more jam-packed hours than ever. Beware the pitfall of telling them they have the opportunity to advance their careers, potentially on the company’s dime, and then not giving them the time and space to do it.
However, it’s a unique company culture indeed if every manager or supervisor has enthusiasm for losing hours of work to upskilling programs. Thus, the mandate has to come from the highest levels of management with support from HR. It’s far less effective to make training a mere suggestion than it is to tell managers they have to get on board. Working with HR, you can determine how many hours your department can stand to lose in the interest of advancing its skill set — and who’s going to pick up any resulting slack.
Yes, you’re upsetting the apple cart a bit here. Some processes and workflows will need to be adjusted in order to accommodate workers who are upskilling, and you’ll need to find time to allow these employees to apply the skills they’re learning on the job. Consider who’s going to oversee that. That is, who else is going to be losing time because of this initiative?
The bottom line
Whichever upskilling route you take, give employees opportunities to put their new skills to the test and experience using that knowledge to further their own and the company’s goals. Assign new responsibilities or tasks along the way to give workers the chance to see their new skills in action. It will communicate and reinforce the confidence you have in employees, likely producing the sense that they and their contributions are valued.
You can get as elaborate or go as simple as you want in creating your continuous learning program. The important thing is to make a commitment to helping employees grow. In return, they’ll do the same for you.