11 Minutes of reading

Skills as currency

Skills as currency. That’s an expression that is being used a lot at the moment in L&D and business circles. But it’s not actually a new concept – it’s something that L&D was talking about 15/20 years ago, usually in relation to IT skills. However, it’s resurfaced the past couple of years and for very good reason. Skills – or more accurately, a lack of them - is a very topical issue right now.

 

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Skills gaps

 

There is an endemic shortage of skills and it’s affecting all industries, at all levels. As you would expect, digital skills are in high demand and short supply, but so are a range of other skills – leadership and management and communication skills, for example. So many organisations are finding it hard (in some cases, impossible) to attract the skills they need.

The Recruitment and Employment Confederation (REC) and KPMG conduct regular research into skills and jobs. Their UK Report on Jobs from May last year found that demand for workers rose at its fastest rate for more than 23 years. At the same time, candidate availability fell at its quickest rate for five years. That’s a really difficult combination for employers to manage. Of course, some of that was pent up demand following the lifting of lockdown restrictions, but those findings still make for sobering reading.

 

The latest UK Report on Jobs shows that the situation has stabilised slightly, but only slightly. The problems haven’t gone away and employers are still struggling to find the skills they need, when they need them.

 

The Great Resignation

 

And they’re not just struggling to find talent – they are also struggling to retain it. We’ve all heard about the Great Resignation and the effect it’s having on organisations. People are leaving their jobs in droves and a significant number are doing it without even having a new job lined up. Some are leaving the jobs market altogether, but many have just had enough of their job, their working environment, their manager, a lack of skills progression or career development….

The management consultancy firm McKinsey & Company has been conducting research into the Great Resignation – how many people are leaving their jobs and why. And just as importantly, what employers can do to win people back or prevent them from leaving in the first place.

 

An article published in March this year called Gone for now, or gone for good? How to play the new talent game and win back workers opens with some statistics from the US Bureau of Labor Statistics. Those statistics show that more than 4.3 million people voluntarily left their jobs in December 2021 in the US, which was slightly below a record high the previous month. And the number of job openings in March (10.9 million) was significantly higher than the number of new recruits (6.3 million). These statistics demonstrate the huge problem that employers are facing.

 

According to McKinsey’s Great Attrition, Great Attraction survey, the top three reasons why people are leaving their jobs without a new job to go to are:

  • Uncaring leaders
  • Unsustainable work performance expectations
  • Lack of career development and advancement potential

 

It’s findings like these that are prompting so many employers and L&D teams to look more closely at the leadership and management capabilities in their organisation. Do existing leaders and managers, let alone wannabe leaders and managers, have the skills to inspire and manage people? Can they steer the workforce through change and uncertainty? Do they know how to operate in a hybrid environment? More importantly, do they know how to help others operate in a hybrid environment? If the findings of McKinsey’s Great Attrition, Great Attraction piece are anything to go by, leaders and managers are in desperate need of upskilling. Look at this excerpt from the report:

 

“Many employers in our survey reported having the right people but not necessarily in the right places. When it comes to managers, this problem can be particularly damaging, especially in hybrid environments, where new leadership skills are required. Training and capability building will be crucial for managers and executives who didn’t come from hybrid or virtual environments—in other words, for everyone from the C-suite to the front line.”

 

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It’s not just leaders and managers that require reskilling and upskilling though. L&D needs to take care of the skills of the entire workforce. Some employees are hungry to learn. They want to learn the skills that will help them do their job better and advance their career. Others simply want to learn new skills because they know they have to in order to stay employable.

 

Skills date so quickly now and constant skills regeneration is a must. Most employees are well aware of this and are keen to keep their skillset relevant and up to date, to stay abreast of the pace of change. And they want their employer to invest in their skills and provide ongoing learning opportunities. If they don’t get that input and they don’t feel their skills needs are being met, chances are they will leave to work somewhere that does take learning seriously.

 

So, recruitment and retention are huge problems for organisations. But, that’s only part of the story. The skills deficit goes a lot deeper than that and it’s all because of technology. Digital is changing everything - job roles, skills, how people work, where people work, how businesses and industries operate…. You name it, digital is having an impact and it’s all happening at breakneck speed.

 

The Fourth Industrial Revolution

 

The WEF has been talking about the Fourth Industrial Revolution for several years, warning that it is only just around the corner. A seminal and frequently referenced piece of research, The Future of Jobs Report 2020, paints a future workplace that looks very different to the current workplace. It predicts a complete reset on skills, with one of the standout stats being the prediction that 50% of workers need reskilling by 2025.

 

The WEF also estimated that by 2025, 85 million jobs could be displaced by machines, with 97 million new roles potentially emerging. That’s quite some reordering of the workforce. All of those displaced jobs will mean redundant skills and all those new roles will require new skills.

And that research was conducted before Covid-19 struck. Even pre-pandemic, people were talking about digital transformation and the unprecedented pace of change. The pandemic turbocharged digital transformation. Almost overnight, businesses everywhere had to pivot and go digital. And workers had to pivot and go digital. Have we turned that corner? Have we already reached the beginning of the Fourth Industrial Revolution?

 

Job roles versus skills

 

Job roles are changing rapidly. As a result, many of the top skills needed today are very different to the ones needed yesterday. No doubt tomorrow will bring a whole new set of business-critical skills. According to the WEF, critical thinking and problem solving are vital skills and have been since its first report in 2016. There are several newcomers on the list too - self-management skills, such as active learning, resilience, stress tolerance and flexibility.


As a result of these shifting skills needs, L&D teams are increasingly taking a skills-first approach to workforce planning, rather than basing all the hiring and talent development decisions on static job roles, as it has done in the past. The ability to learn and adapt to change is just as important (if not more important) than technical skills. It’s all about agility and adaptability now, the ability to learn, unlearn and relearn in a constant cycle of change.

 

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Horizon scanning

To keep abreast of what’s coming up, it’s vital that L&D engages in constant horizon scanning, but it can’t do it on its own. L&D has to act in partnership with other business functions, doing constant skills and business analysis with them. It needs to keep asking the same questions. What skills do we need today? Tomorrow? What skills does the workforce have? Where are the gaps and how will we fill them? What skills are on the decline and how do we reskill and upskill people to keep them relevant and future-focused?

Upskilling and reskilling are critical to addressing talent shortages. But more than that, they are also critical to ensuring organisations thrive and survive in an ever-changing world. Upskilling and reskilling is a business imperative, as well as a learning and HR imperative.

 

The role of L&D

 

What’s L&D’s role in all of this? Learning and development professionals are, of course, integral to the future of work. This new future of work requires new skills and the constant regeneration of skills and what is L&D about if not skills?

In LinkedIn’s 2022 Workplace Learning Report The Transformation of L&D: learning leads the way through the Great Reshuffle Linda Cai, vice president of Talent Development at LinkedIn, said:

 

“The responsibility of learning has always been to help organisations navigate uncertainty and chaos in the world.”

 

There has been a lot of chaos and uncertainty in the world these past two years and there is likely to be more in the coming years. The pandemic highlighted the need for organisations to be agile and flexible and to adapt to change as change happens. L&D played such a key role in the shift from office life to remote working.

 

While it has been a very challenging time for learning teams, the profession has emerged stronger and with an enhanced reputation. L&D’s visibility has never been so good.

 

Finally, it has achieved C-suite status, after many years of knocking at the door. According to the LinkedIn report, nearly two-thirds of learning professionals say they now have a seat at the C-suite table, a rise of 27% from the beginning of 2020. Business leaders are behind learning now.

 

This is what they’re saying:

 

  1. 74% say L&D has become more cross-functional
  2. 72% say L&D has become a more strategic function in their organisation
  3. 87% were involved in helping their organisation adapt to change
  4. 62% say L&D is focused on rebuilding or reshaping their organisation in 2022

As a result, nearly half of the L&D professionals polled by LinkedIn expect to see their budget grow this year. You don’t get a better measure of success than that, particularly given the current economic climate.

 

What do learning professionals want to do with that increased budget?

 

A significant number (64%) said their organisation’s culture of learning has grown stronger the past 12 months, so they will want to be building on that. Top on their list is leadership and management training (49%), followed by upskilling and reskilling employees (46%), digital upskilling/digital transformation (26%) and diversity, equity and inclusion (26%).


L&D’s strategy has to be data driven. Collect data on the existing skills of the workforce, analyse it and map it to business needs. AI is your friend here – it can do a lot of the heavy lifting in terms of skills gap analysis and it can provide really insightful, rich data that you can use to determine your strategy going forward.


Conclusion

 

It’s clear that L&D has the opportunity to push forward with change, with ensuring that learning is future-focused and meets the needs of the business and the individuals within the business. The pandemic forced businesses to let go of legacy models and attitudes towards learning. It’s a digital first world now. As we continue to move through the pandemic, organisations need to work out what learning works best in a hybrid world and how to provide blended learning solutions that address complex skills needs in this ever-changing environment.

Internal mobility is key to success – upskilling and reskilling your existing workforce so that they have the skills needed for the future. Everyone knows that the skills gap is a huge problem – 46% of L&D participants in the LinkedIn report say the skills gap is wider at their organisation than in 2021 and 49% of leaders are concerned that employees do not have the right skills to execute business strategy, a nine point rise than in 2021.

 

The climate is right for L&D to effect change and pursue a skills-based agenda that will meet the business needs of the future.

 

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