Employees aren’t confident their leaders have a handle on the skills shortage, finds research from Cornerstone. But there are some relatively simple things organisations can do to change that.
It won’t be surprising to anyone reading this that skills and talent shortages are still the number one concern for business leaders, according to Cornerstone’s latest research into the global skills shortage.
At an executive lunch in Sydney, unveiling the results of Cornerstone’s report, its Global Vice President of Strategic Initiatives Mike Bollinger noted that many of the jobs employers are trying to train people for don’t even exist yet. He also cited data from the World Skills Clock which shows that 63 per cent of the world’s youth don’t currently have adequate digital skills.
So the skills shortage conversation runs deeper than our workplaces. This should be a concern for our schools and the broader community too.
It’s a complex challenge to solve and requires collaborative, long-term investments from the government and the business community. Fortunately, both seem to be moving in the right direction.
LinkedIn’s 2022 Workplace Learning report shows that 72 per cent of learning and development (L&D) specialists feel L&D has become a strategic function within their organisation over the last few years. And, at the Jobs Summit earlier this month, the government announced a temporary 35,000 increase to skilled migrant visas, as well as 180,000 more fee-free TAFE places as of next year.
While there’s positive movement towards addressing the skills shortage, Cornerstone’s research, which surveyed 815 employers and 1818 employees globally, shows that employees and employers aren’t necessarily on the same page.
Employees are far less confident than leaders about their organisation’s ability to prepare talent for the future.
“There’s always going to be a perception gap because employers are the aficionados of what [the organisation] does and the employees are just the recipients, so they may not recognise an investment at the same level,” Bollinger told HRM in a sit-down interview during a visit from America last week.
While the existence of a gap isn’t reason to ring alarm bells, the size of the gap could be cause for concern.
“We asked both employees and employers, ‘How confident do you feel in your organisation’s ability to develop skills?’ We found thirty percentage points between the two groups on average. That is statistically significant.”
For the Australian and New Zealand portion of respondents, less than half (46 per cent) were confident in their employer’s approach to skills development. However, the APAC region is doing slightly better in terms of prioritising skills development, with 37 per cent of APAC employers citing this as a priority compared to 24 per cent for other regions.
What’s driving this confidence gap?
This gap existed before the pandemic, says Bollinger.
“We all feel like our skills will atrophy,” he says. “Our [required] skills are changing all the time. What we need to know to stay current feels almost impossible given the pace of change.”
When you combine people’s feelings of extreme busyness, increased workloads and research from the World Economic Forum which suggests that 50 per cent of our workforce will need to be reskilled by 2025, you peel away people’s resilience and reveal a very basic human emotion: fear.
“When employees feel that much fear, their ability to perceive if their employer is making the right investments… is a little bit stymied,” says Bollinger.
The murkiness of future skills needs is another challenge for HR, employees and business leaders alike.
“Couple people’s fear, which is five times more impactful than benefit – this comes from the days when the saber-toothed tigers were going to eat us – with the fact that the clarity of [skills needs] has been quite opaque, and that all contributes to the confidence gap.”
“The ability for an employee to express an interest and have their employer find ways to use that interest to the organisation’s advantage is the height of personalisation.” – Mike Bollinger, Vice President of Strategic Initiatives, Cornerstone
While he’s not able to point to statistical evidence, anecdotally, he says the gap might be widening because people are placing higher expectations on their leaders.
During the early days of the pandemic, things were held together with “baling wire and a little bit of duct tape to make things work,” he says. Employees were more forgiving of scrambled or unclear processes. We were all muddling our way through and doing our best to keep the wheels turning.
But now that we’ve lived through a few years of hybrid working set-ups – or out in the field as a blue-collar worker – employees have had enough time to sit back and watch what their leaders and HR teams are prioritising (or deprioritising), and how their leaders approached topics such as skills development and training.
The outcome? More people expect to be set up for success by their employers – and they’re less forgiving of those who put it on the back burner.
High-performers versus laggards’ response to the skills shortage
To get a sense of how to move forward on this challenge, Bollinger and his research team broke the data down into high-performing, average and laggard organisations.
The three groups were determined by 16 indicators, including profitability, turnover rates and employee NPS scores.
The confidence gap for high-performers was significantly lower (11 per cent) compared with low-performing organisations (48 per cent).
High-performing organisations (HPOs) also had closer alignment between employees and employers in terms of sentiment towards the organisation’s profitability, response to COVID-19, employee retention and regulatory compliance.
“That’s because people [from HPOs] feel like their employer has a sense of responsibility. They feel like their employer has a handle on those future skills. And they feel like their employers are not only letting them make an investment in their own interests, but recognising that in terms of internal mobility. Those things create a perception of alignment and belonging. They make all the difference.”
Employees working for HPOs also rated their employers highly for employee development, options for personalised career paths and for multiple forms of L&D opportunities, suggesting HPOs understand the power in a holistic approach to training and professional development.
HPOs are also more likely to prioritise an investment in specific skills now, as opposed to average and laggard organisations, where the majority plan to invest within a year and three years respectively.
So how can employers follow in the footsteps of high-performing organisations? Bollinger shares five important things to keep in mind.
1. Personalise the learning experience
Cornerstone found that 96 per cent of HPOs give employees the chance to acquire skills that align with their personal interests, compared to 61 per cent of those in laggard organisations.
This personalisation factor is key, says Bollinger.
“The ability for an employee to express an interest [in something] and have their employer find ways to use that interest to the organisation’s advantage is the height of personalisation.”
You might have an engineer with a passion for social justice – could they lead one of your ESG efforts? Or perhaps someone in your sales team is an avid gamer. Could they learn how to gamify your onboarding experience?
“We tend to spend all our time trying to help people with their weaknesses. Let’s not do that anymore. Let’s emphasise their strengths,” he says.
“Employee engagement is essentially just a differentiated effort. If you give me the opportunity to explore the things that are of interest to me, I’ll give you differentiated effort. That’s just human nature.”
2. Forefront learning from the get-go
In his presentation, Bollinger referred to research from the Aberdeen Group which found that over 30 per cent of new hires quit within the first month of a new job.
In separate research, Aberdeen also found that 76 per cent of employees believe training to be important in the first week on the job.
He also cited separate research which suggested that retention could be increased by 60 per cent when onboarding practices included development and training opportunities.
“People come to work for you because you created an EVP that people agreed with from a mission perspective,” he says.
“What if my onboarding experience reinforced that EVP, created clarity around what my role really was, created the connectivity around what I needed to do in the first 30, 60, 90 days, and also connected me to others in the organisation very early on?
“If my onboarding experience included the learning and development of those things, it reinforces the EVP during that at-risk period and stickiness goes up.”
3. Look internally before you hire externally
Cornerstone found 40 per cent of employees are looking for information about skills development inside their organisations.
Nearly 80 per cent wanted more skills development content, 72 per cent wanted the opportunity to engage in more career shadowing, and 70 per cent wanted educational allowances to pursue learning opportunities. The latter was particularly important to employees in the Asia-Pacific region.
Employers need to meet them halfway by sharing opportunities and looking internally for talent before bringing external hires in.
Internal mobility, according to Bollinger, is one of the key things employers can focus on in order to build future-ready workers.
“It’s also much less expensive to hire somebody internally than externally because they already understand the organisation’s DNA.”
“What we need to know to stay current feels almost impossible given the pace of change.” – Mike Bollinger, Vice President of Strategic Initiatives, Cornerstone
4. Prevent leaders from talent hoarding
When a leader has invested time into developing an employee, they’re often hesitant to ‘share’ that person with anyone else in the organisation. There’s a sense of ownership over them.
We need to do away with this mindset, says Bollinger.
“We need managers who are aware of other needs in the organisation and who are incentivised to help individuals grow.”
How would you incentivise this behaviour?
“There’s obviously money – it could be part of their evaluation rate. You might ask, ‘What’s the internal promotion rates of the teams you manage?'”
But an even simpler approach is celebrating managers who grow people.
“When you say, ‘This person has grown in the company and they’ve just taken on a senior leadership role’, celebrate them, but also celebrate the manager who put in the time to get that person there,” he says.
“When [you develop people], you create a network that lasts a lifetime. I’ve coached around 100 people and I hear from them all the time. Sometimes I help them find work, sometimes they help me to find people.”
5. Get leaders on board by speaking their language
HR professionals need to learn how to pitch L&D investments in a way that’s going to resonate with the executive team, says Bollinger.
“The business outcome typically needs to be aligned to one of three things: lower risk, lower costs and increase revenue. If you can take that initiative and align it to one of those business outcomes, it will have legs.”
For example, you could cite Deloitte and DeakinCo’s finding that every $1 invested in L&D per employee delivers a $4.70 return in revenue.
This is where HR’s own upskilling opportunity comes in. To be an HR leader of today, you need to be data-driven and an expert storyteller, he says. You also need to help managers focus on skills that pertain to their specific team’s needs.
“Say I’m [part of] an organisation of 1200 people growing at an astronomical rate. We’ve got business units for innovation, delivery, manufacturing, etc. Each one of those business units has a different set of needs when it comes to skills. So this notion that HR is going to be able to say, ‘We need to develop these 12 skills and we’re going to do that [organisation-wide]’ is a misnomer all by itself.
“What you have to do as an HR practitioner is go back to the business unit and understand how their [KPIs are] measured then ask them what skills they’re crying out for.
“You have to communicate that upward and downward in a way that’s simple, straightforward, crisp, and that lets employees know they can explore new opportunities, whether it be sideways, upwards or downwards.”
For those hesitant to make investments into the L&D space, Bollinger refers to the oft-told saying, ‘What if you invest in your people and they leave?’ To which someone responds, ‘But what if we don’t and they stay?’
“Invest or die, it really is that simple,” he says. “Some turtles don’t make it to the sea. Over time, if you don’t innovate, if you don’t adapt, if you’re not agile, you will find yourself being left behind.”
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