Hiring is expensive. Organizations are scrambling to keep afloat during the Great Resignation, and old employee retention strategies may not work as well in this new context. Ceridian’s 2022 Pulse of Talent survey found that successful employee attraction and retention strategies now take more than pay. Employers need to take a fresh look at their employee experience to better retain their talent and decrease their talent costs.
SHRM looked at employer reskilling initiatives at PwC, Amazon, AT&T, and Accenture and found that the cost of reskilling current employees was half the cost of external hires. The recruitment process is inefficient and expensive. HR can spend many hours spent sorting applicants, providing skills tests, and extensively interviewing with no guaranteed hires as a result. After the time spent hiring, research found outside hires can take three years to perform the same job as well as inside hires.
And even when you do find the right external candidate after all of that work, there may still be further hidden costs. 90% of new hires decide within the first six months whether they want to leave or stay. The disruption to company culture from high turnover can also impact your existing employees. Even more time is spent by current employees who must help onboard new hires, or taking on extra work when roles are open.
It’s time for companies to move away from this over-reliance on external hiring. Organizations are overlooking the wealth of talent they already have on their payroll.
With the current technical skills gap in the talent marketplace, some companies are resorting to bidding wars for people with critical skills they need. The search to attract the perfect candidate is already fierce and the skills gap makes finding that ideal new hire even more unattainable.
Consider how the acceleration of automation has contributed to the skills gap. When manual data entry jobs are automated, the employees previously tasked with that role now may be asked to analyze it. Generating these insights is a different skill set than their past job experience has trained them for. Leaders need to prepare their employees to stay current in the world’s current state of digital transformation.
The skills gap has become a global problem. Not having the right talent can hurt organizations through increased recruitment costs, poor customer experience, decreased productivity, and less innovation.
The build versus buy mentality is simple. Hiring great candidates with the capacity to learn new skills is more sustainable in the long run. Companies such as Bloomberg and Adobe credit their ‘Academy’ training model as a transformative practice for the business by developing skills internally. The International Labor Organization has called for more organizations to increase investment in people’s capabilities.
Reskilling and upskilling are valuable talent management strategies that allow organizations to build teams that can solve business problems. Focusing on the skills your organization needs today and in the next five years is an actionable way to address the skills gap. Companies with better visibility into their talent pool are able to quickly identify gaps and better fill the needs of different areas of their business.
Uncover new strategies for attracting and retaining talent in Pulse of Talent 2022.
Glint’s latest Employee Well-Being Report found only one in five employees see the opportunity for internal mobility in their organization. Without their organization’s support in individual development or a road toward their career goals, a large majority of people can become disengaged and unmotivated in their roles.
Reskilling and upskilling are better for retention because it can improve the employee experience. Employees are more likely to stay at an organization when they see a path forward.
Developing future leaders is important, but there are also many positions within an organization that include people management, technical roles, product innovation, customer service, and more. Over half of learning and development professionals now agree that internal mobility is more of a priority now than before COVID-19.
Keeping high potential employees is imperative for future operational success. These are the individuals with the ability to take on more complex jobs. They often are independently motivated, strong decision makers, and have good people skills for working with others.
Don’t overlook employees who are more introverted and may not voluntarily seek mentorship. Recent research found 54% of people who work at organizations with effective succession programs use formal tools to gauge leadership capabilities. Supplementing human judgement with data can help organizations better mine their talent pools for succession candidates.
Have managers work on career mapping with their direct reports. Many managers focus on coaching for employees who are struggling, but all employees are equally deserving of that same feedback to grow and improve.
Take a more holistic view of every employee and check-in with what they want for their careers. Some people simply want more exposure or collaboration opportunities that can be easy to arrange. For those looking for formalized credentials, get ahead of any flight risk employees by working with them toward their goals.
Ensure that managers are sharing continuous feedback, recognition, and leadership opportunities with all employees. Everyone deserves equal opportunity to showcase their potential.
There are a variety of upskilling models, from internal training to partnerships with vendors. Consider your current resources. Do you have people equipped to train your workforce? Development programs can also take some time out of the workday. Some organizations stagger their training sessions for different timeslots, or offer virtual sessions that don’t require physical classrooms.
Partnerships with universities, community colleges, or professional learning organizations are other options that can provide the specialized programs your people need. This can even include reimbursements for courses or apprenticeships. For example, American retailer Macy’s offers a debt-free benefit though the Guild Education platform to help upskill their employees, remove continued learning barriers, and drive retention efforts.
Develop the talent you need instead of searching for that perfect candidate. Organizations should treat reskilling as an important employee retention strategy that’s profitable for future operational success.