“Use what talent you possess;
the woods would be very silent
if no birds sang except
those that sang best.”
—Henry Van Dyke
Developing talent is top of mind for most CHROs today. “Skills are the new currency,” said IBM executives when University of Bath and MIT Sloan experts did an in-depth case study of the impacts of IBM’s state-of-the-art learning system.
That 2020 study found the time employees spent on learning and achievement of internal learning credentials (badges) helped them achieve sales targets, and also correlated with salary increases.
While IBM’s enthusiastic description of skills as the new “currency” may be over the top (a Deloitte 2021 blog disputes the equation), the fact remains that leading organizations globally are placing skills rather than jobs at the center of their workforce.
“To succeed, organizations need a fundamentally new workforce operating system—shifting from managing work performed in jobs organized in a hierarchy to orchestrating the dynamic matching of skills to work.”
—Sue Cantrell, Jonathan Pearce, and Michael Griffiths, “Skills: The new workforce operating system.”
Globally, LinkedIn Learning’s 2022 Workplace Learning Report found L&D budgets are at a six-year high, with top trends being management training, programs to upskill and reskill employees, and digital training. The report found marked increases in 2022 compared to 2021 in DEI initiatives, in-person training, large-scale upskilling or reskilling, digital fluency, and analytics training.
Evidently, rather than being just a nice extra, learning is becoming an integral part of daily work for employees at forward-thinking firms planning ways to future-proof their business.
The changing world of work
Talent development is wise because the world of work is changing fast. The World Economic Forum forecast in 2020 that half of all employees will need reskilling in the next five years. It predicted 40% of the core skills professionals use today may no longer be relevant in a few years.
While that may sound alarming, it is also one of the best reasons in the world to focus on your talent development strategies now.
What is talent development?
Talent development is about continuous employee growth, including developing personalized learning plans and career paths for your promising workers. It includes mentorships and gig projects at your firm’s talent marketplace, if you have one.
But it’s not enough to run a one-off L&D program when you suddenly realize your retention rate is falling, or you need new skills. Talent development, to be effective, should be continuous and proactive.
Most critically, it should align with your long-term business goals—otherwise, you’ll be wasting your funds on the wrong training.
Convincing reasons to develop your talent
There’s a renewed focus on developing your existing talent.
Here are our top reasons for investing in your people.
1. The Great Reshuffle (or Great Resignation).
The quitting started in low-wage leisure, retail, and hospitality jobs. It spread to skilled white-collar workers who realized their bargaining power and started making more demands. People still needed to pay their bills—but they re-discovered their power of agency.
As workers switch jobs for better pay, conditions, work-life balance, or more intrinsic meaning, many businesses face a fluctuating labor shortage and retention problems. It’s worse in nursing, where turnover can be as high as 60% in some hospitals.
So, while reskilling and training is slow and time-consuming, the current labor crunch is an excellent reason to grow the talent you can’t hire.
2. Automation demands high-level skills.
While automation is eliminating many rote jobs (for instance, chatbots replacing receptionists), it’s reshaping others. Workers will soon compete for jobs requiring higher level skills than they currently possess. Upskilling and training can help develop them.
Forbes believes these skills will include:
- digital literacy,
- data literacy,
- critical thinking,
- empathy and emotional intelligence,
- adaptability and flexibility,
- curiosity and continuous learning, and
- leadership skills.
3. A skills-based model is the new ideal.
Though the need for skilled talent is not new, technology only now supports it well. A 2021 Deloitte blog notes that today, “AI can infer, quantify, validate, and organize skills in a way that was previously impossible.”
The 1990s talent management approach based on rigidly defined, hierarchical, static job descriptions is morphing towards a more fluid organizational model based on agile, tech-enabled skills-based roles.
4. Better engagement and retention
Building people’s skills and capabilities help motivate people to stay with you. Many people with in-demand skills leave jobs that don’t let them grow.
5. Smarter workforce planning
Building talent is critical to planning your future workforce. You’ll probably foresee some skills gaps down the road. Many companies already do today with their shortage of people who are literate in data and STEM subjects.
Or you may be in an industry facing significant change, such as any hydrocarbon-related business facing the need to pivot to greener energy systems. They will have to restructure, do mass layoffs, retrain, and recruit new skill sets.
6. Better employee and business performance
Whether an employee learns material for a required professional certification or improves general business-related skills and knowledge, the result may be better business productivity and performance—but more studies need to be done.
7. Better feedback processes
Good managerial coaching builds better relationships between employees and managers. It also improves feedback processes, which helps smooth potentially prickly processes such as performance reviews.
8. More stable, resilient business
If you help people access personally meaningful training and career paths that align with your business goals, you achieve an essential part of HR’s role: to build a capable workforce of skilled, committed people who help the organization survive threats, adapt to changing conditions, and grow the business.
If you were uncertain about the value of investing in developing your employees, we hope we’ve shared with you some good reasons many organizations worldwide are pursuing this policy.
Talent development is a wise policy today because it
- motivates your existing employees to stay with you because they see you’re invested in their training and future,
- helps workforce planning by training up or reskilling people for future skills needs that may be in short supply,
- improves employee productivity and business performance,
- builds better relationships and feedback processes if you use managers with good coaching skills, and
- helps build a more stable, resilient business because your employees learn how to continually upskill or reskill to meet new needs.
Pixentia is a full-service technology company dedicated to helping clients solve business problems, improve the capability of their people, and achieve better results.