The companies that will win the war are those that offer their employees opportunities to learn and better work-life integration.
According to the latest figures released by the United States Department of Labor, there were 4.6 more job openings than there were unemployed workers in the country in December 2021. This massive gap is the result of a situation where employers are struggling to find people with the right skills to fill vacant posts even as millions of employees quit (or consider quitting) jobs that give them little satisfaction and few opportunities for professional development.
In the past two years, Covid-19 has revolutionized the world of work by ushering in remote and hybrid work, giving impetus to workplace digitization and automation, and creating a need for ever-changing skill sets. At the same time, it has given people time to pause and re-evaluate their work and life goals like they never have. People want more out of their jobs – not just money and benefits but real opportunities for self-improvement and professional development, flexibility in the way they work, a sense of belonging, and greater work-life integration (a concept that replaces work-life balance and incorporates work into one’s personal life in a way that promotes happiness on both fronts). And they’re not afraid to fight for what they want.
Employers must realize that upskilling and reskilling their existing workforce is their greatest weapon in the war to survive the great workplace churn. The same holds true for employees who wish to have thriving careers in a post-pandemic world.
The Great Resignation took off in the spring of 2021 and is continuing into 2022. After close to 48 million Americans quit in 2021, around 4.3 million more left their jobs in January 2022 – a figure just shy of the 20-year record November 2021 set with 4.5 million resignations.
Why are people leaving the workforce in such large numbers? A new Pew Research Center survey has found that lack of opportunities for advancement was a top cause (63%) for workers quitting their jobs in 2021. Among those who quit last year but are now employed, more than half told the survey that they had found more opportunities for advancement in their new jobs, along with better pay, more work-life harmony, and improved flexibility.
Furthermore, Microsoft’s Worker Trend Index 2022 says the percentage of Americans considering a job change has gone up to 43% from 41% a year ago. The need for change is greater among younger workers – 52% for Gen Z and Millennials combined compared to 35% for Gen X and Baby Boomers.
Employers are already paying higher salaries to attract and retain talent, but it isn’t nearly enough. What more can they do to make employees stay?
For starters, they can start paying attention to the numerous studies in which employees state emphatically that they would stay on in their jobs if their employers invested in their education and professional development. According to performance management platform 15Five’s 2022 Workplace Report, almost half of the surveyed US employees cited clear career growth fueled by employer-provided learning and development as a top factor to remain with a company. Company-imparted learning and development opportunities have, in fact, been an employee requirement since before the pandemic and the Great Resignation. In LinkedIn’s 2019 Workplace Learning Report, 94% of the surveyed employees said they would stay at a company longer if it helped them learn.
Many wise companies have woken up to this reality. The World Economic Forum reported in 2020 that a survey of employers had revealed that they expected their upskilling and reskilling programs to cover more than 70% of their employees by 2025. More recently, when business software provider Capterra surveyed 300 HR leaders, 49% of them said their learning and development spend in 2022 had jumped 41% from the previous year. Given that it costs a company in the US anywhere between 16% and 213% of an employee’s annual salary to replace them (make a new hire and train them), investing in the existing employee’s upskilling and/or reskilling makes better business sense. After all, companies that invest at least $1,500 per employee on their learning and development are reported to be 24% more profitable than those that spend less.
For more on the Great Resignation, click here.
Making the right hire is tough for businesses, given the severe talent shortage. But employers are now realizing that employee retention is just as big a challenge. To keep their talent pool intact, companies must make sure their upskilling initiatives:
It’s not enough to offer the customary class or two, no matter how good they are. Today’s employees are hungry to learn and improve on all fronts. An effective upskilling program should offer them opportunities to master multiple skills in diverse areas such as manager training, strategic leadership, diversity, equity and inclusion (DE&I), conflict management, and so on. Even if companies lack the expertise and resources to develop their own learning material, they can collaborate with external experts to offer cutting-edge and personalized learning. Outsourcing upskilling has many benefits. For one, an external partner might have more expertise and experience in delivering effective upskilling than the company. It’s why investment in skill-oriented start-ups has seen significant growth in the past year.
Employers today are desperate to retain talent, and it’s not just to avoid the previously mentioned high replacement expenses. Investing in existing personnel is a smart move because they are already familiar with the company’s values, culture, and customers, and might also possess most of the skills the company needs to build upon. To have a positive impact on employee retention, an upskilling program must come with clear pathways for career advancement. This means empowering employees to achieve professional success within the organization so that they are not forced to look elsewhere. Many smart businesses today connect skills training to internal mobility – which allows people to move across roles within the organization, either by improving the skills they need for an existing job (upskilling) or acquiring new skills so that they can move on to an altogether different role (reskilling). Internal mobility has become a bigger priority for employers since the pandemic. As for employees, professional development is at the heart of their desire to learn. According to LinkedIn’s 2022 Workplace Learning Report, the top three motivations for employees to upskill/reskill are to a) stay up to date in their field, b) meet their personal interests and career goals, and c) be promoted or get another job internally.
Learning should be continuous. An upskilling program can make a bigger impact if it is part of the employee journey right from hiring and onboarding to retention and even exit. Upskilling is crucial to attracting and recruiting talent because eight in 10 people consider it a major factor when looking for a new employer. Upskilling can lead to a successful onboarding experience by quickly preparing and training a new hire for their role in the organization. This is very important given that 88% of companies fail the onboarding test and 20% of new hires quit in their first 45 days. Upskilling also has a positive impact on employee retention because it fosters feelings of loyalty and satisfaction. Finally, even when a company loses people despite having put in the effort to train them, it can leave a positive footprint. The employee will very likely leave with a good impression of the company and be willing to recommend it to others in the future.
Covid-19 pushed people to work from their homes and upended traditional business hours. Many employees ended up working longer hours and at all hours, while also juggling responsibilities at home and dealing with severe economic stress. Gallup’s State of the Global Workplace 2021 Report showed a marked increase in employees’ feelings of worry, stress, anger, and sadness in 2020, the first year of the pandemic. Another study – by US-based software firm Oracle Corp. and consulting firm Workplace Intelligence – reported that 70% of the global workforce called 2020 the most stressful 12 months of their lives, with 78% adding that their mental health had been affected. Employee burnout became the norm.
Apart from the way we work, the pandemic also brought a sea change in our attitude to work. As exhaustion set in, millions walked away from their jobs. A large chunk of them quit because they were no longer willing to put up with the increasing demands and stress of a fast-changing workplace. Those who left (or plan to leave) are now actively seeking better opportunities that allow them more flexibility in how and where they work. With the pandemic accelerating the use of technology, people realize that there is no separating their personal and professional lives. Therefore, what they want more than anything is a smoother and healthier work-life integration. According to a survey of 20,000 employees in 10 countries by consultancy firm Bain and Company, 58% of the respondents said the pandemic had forced them to rethink the balance between work and life.
In this backdrop, the overall wellbeing of an employee very much becomes the employer’s responsibility. If a company wishes to hire or keep the best talent out there and operate at full capacity, it cannot ignore what its employees want. It is imperative that learning and development professionals, HR executives, business leaders, managers, mentors, and trainers start viewing the employees they upskill not as machines but as humans with their own unique frailties and baggage. This means focusing not just on training them for a job but investing in their wellness and mental health and helping them avoid burnout and stress, which are major obstacles to productivity. Employers and leaders must learn to treat their team members’ personal and professional struggles with empathy.
Healthy work-life harmony hinges on a company’s leadership. An effective upskilling program must prioritize training team leaders and managers to honor the boundaries between work and personal time. Making people work long hours, for example, is actually counterproductive. A Stanford University study says per-hour productivity falls sharply when an employee puts in more than 50 work hours a week. Managers can and must learn to become good examples for work-life integration – maybe by encouraging vacation time for themselves and for their team members, or by setting strict communication hours to avoid overkill. When leaders take the initiative, it’s not that difficult to make work-life harmony a part of company culture.
Learnit offers various Empathy workshops that can help you become a more empathetic employer or employee.
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