Today’s businesses are operating in a dynamic environment rife with technological disruptors and ever-evolving consumer expectations—factors that are pushing employees into new ways of working. As a result, organizational success and performance—now more than ever—centers on the workforce’s ability to quickly and effectively adapt to change. By embracing a strategy of regular reskilling now, HR and business leaders can ready their organizations for the inevitable and continuous evolution in business needs.
COVID-19 is one of the more recent and forceful catalysts for change. Pandemic response has pushed many companies into new ways of working—namely remote work—before most believed they were ready. Yet, remote work has long been an accelerating trend in the U.S. In fact, the share of the labor force that works remote tripled in the past 15 years, according to the Federal Reserve. Many organizations already have the infrastructure and technology in place to support remote work. However, the urgency of pandemic response has underscored a critical workforce need: the knowledge and skills necessary to effectively utilize available tools to maintain levels of productivity while working remotely.
There is an overall chasm in the knowledge and skills needed to meet the demands of today’s reality: 70 percent of employees have not mastered the skills required for their job today. This trend is particularly concerning given that 72 percent of business leaders across industries state that knowledge and skills have the most significant impact on their organization's preparedness to tackle strategic priorities.
The number one skill organizations valued in employees in 2018—and projected to be valued in 2022—is analytical thinking and innovation. In 2019, upskilling and reskilling moved up the executive agenda from ninth to third. Leaders realize that they cannot fulfill the desired skillsets and behaviors through firing and hiring alone. Mass firing and hiring could lead to a loss of tribal knowledge and negatively affect employee morale. To compound matters, external hires cost roughly 18-20 percent more and perform worse within the first two years compared to employees who have developed new skills to fill a new role. To efficiently manage talent for transformation and innovation, an organization must reskill.
A survey of 4,300 managers and executives found that 90 percent of workers need to update their skills annually just to contend. By reskilling today, organizations will close the knowledge and skills gap required to tackle the strategic priorities that will ultimately define success.
For a tangible idea of reskilling gone well, let’s look at the example of a large financial institution. Its recent steps to reskill employees and candidates include over 250 courses that span topics from artificial intelligence to cloud computing. Also, it created a developmental program for recent college graduates without computer science (CS) backgrounds to develop software engineering skills through an intensive six-month learning experience.
By systemically reskilling its workforce, the company has addressed significant barriers to transformation. Around 60 percent of U.S. companies state that skills gaps prevent them from successfully implementing the desired technologies. The organization’s Chief Information Officer astutely characterized the trends driving the urgency for reskilling in his industry: “the winners in this industry are ones who are really going to figure out how to leverage technology and harness it in ways that the best technology companies do.”
Tapping into the potential of technology through the workforce requires a mindset that is deeply rooted in learning, growth, and development. By fostering workforce acceptance of regular reskilling, organizations will be prepared to meet known and unknown business needs. This acceptance is critical in the age of continuous transformation.
Preparing to compete and thrive today and tomorrow requires employees to build higher tolerance and greater readiness for change. Embracing reskilling will enable the skillsets that empower organizations and employees to approach change with an appetite for growth. As the pace of change accelerates, organizations that have strengthened resilience will be at a distinct advantage. A continuous growth mindset is critical to organizational performance as the future of work is not an endpoint, but rather, a constant moving target defined by the effectiveness in which organizations can adjust to the reality of today.
For more insights on reskilling, also check out our white paper, “Winning at Reskilling.”