How reskilling has become the talent solution of the future

Ninety-four percent of UK workers will need reskilling by 2030. Let that sink in for a moment – it’s a huge number. Our recent MEOS indicates 44% of UK organisations reported optimistic recruitment intentions as they entered Q3 2023, with a +29% net hiring outlook. However, an acute shortage of skilled workers, high employee demand for hybrid working and workers’ rising compensation expectations will still leave many businesses struggling to secure the talent they urgently need.

This is where reskilling can become the differentiator between failure and success. While accurate intelligence is needed to make best-talent decisions in a hypercompetitive labour market, without that intelligence, or indeed a wide pool of available talent in the first place, business leaders and senior HR personnel can find themselves in a situation where hiring alone is no longer a solution.

The changing world of work

As talent demand continues to outstrip supply and a digital skills shortage becomes ever present, it is not surprising businesses are reporting a lack of suitable skilled talent is impeding their growth.

The main reason behind this current talent shortage is that the world of work has permanently changed. Alongside a growing skills shortage, employees’ expectations have now changed with the need to have greater opportunities within roles and greater fulfilment at work, in both business and personal terms:

• Work needs to align with their personal values
• Work needs to be flexible
• Work needs to be remunerative in more ways than just their pay packet
• Workers need ongoing upskilling/reskilling opportunities once employed

All these factors feed into the fact the playing field has changed irreversibly, bringing more importance to Employee Value Proposition (EVP) as critical to worker attraction and retention. In an age when there are more jobs than workers, those who choose to work can be highly selective as to where and when they deploy their labour – making the reskilling of existing staff more essential than ever before.

Unfortunately, many employers are also failing to appreciate more than 50% of current jobs will require new skill sets by 2027. Many employers also have poor understanding of the current and transferable skills within their own organisations and are often unable to discern which type of training programmes they need and how to deploy them to achieve the skills they will need in the future.

And the problem of legacy staff being left behind by the ‘new world of work’ isn’t the only growing issue. According to McKinsey, university graduates are also woefully underprepared, with 60% of employers saying that new graduates coming through the system are ‘unprepared for a commercial career’ – and 40% stating the biggest reason they cannot fill entry-level vacancies ‘isn’t a lack of people, it’s a lack of adequate skills’.

Despite some businesses rising to meet the reskilling challenge – meeting the talent shortage by upskilling and retraining, to build from within – they can often fail to properly meet the business’ needs. Schemes can often be flawed because of execution problems – most critically, a lack of outcome focus, insufficient understanding of required skills, and weak incentivisation. And, when schemes are deployed, poor planning, low investment, weak programme take-up, and high drop-out rates can also lead to many internal training programmes delivering a distinct lack of return.

Reskilling programmes require sharp planning, strong experience and a clearly-delivered outcome to succeed and, when done so, 75% of completed reskilling programmes are economically positive – typically delivering productivity increases of up to 12% per worker.

Reskilling for the Future

Business leaders can develop and reskill the valuable workers they already have by developing a strategically planned reskilling programme, to fill gaps in organisational skills now and in the future. This needs to be at the heart of any successful organisation’s talent strategy.

According to the World Economic Forum, employers who invest in training and upskilling find it easier to retain staff and, with a recent PWC survey revealing that 39% of employees say they’re concerned about not getting sufficient technology training from their employers to help keep skills up to date – the time is surely now.

Seven steps to effective workforce reskilling

It’s time to switch away from a traditional, restrictive, experienced-based view of jobs to a modern, adaptive skills-based view.  To succeed, businesses need to incentivise the outcomes and build the internal capabilities that walk learners through skills exposure, education and experience.

Businesses can do this in 7 steps:

Step 1: Conduct a skills and capabilities audit to determine the skills your business already has.

Step 2: Assess the skills you are missing now and what skills you need for the future to deliver the achievements you are aiming for.

Step 3: Understand when it is better to build talent vs buy talent – build is the most effective option when skills are rare in the market.

Steps 4 & 5: Motivate to graduate – Reward an employee with greater opportunity through incentives and incentivise managers to fulfil their roles as talent scouts within your business.

Step 6: Select your training solution – deliver the right experience to deliver the right outcome.

Step 7: Measure, manage, optimise, scale – successful training programmes are always work in progress with room for continuous improvement.

Learn more on reskilling your workforce to meet the coming demands of an ever-changing business landscape in our Ultimate Reskilling Guide – available now.