The need for continual investment into employee training and reskilling has never been greater. According to a recently published IBM report, 120 million workers in the world’s 12 largest economies will need to be reskilled over the next three years as a result of automation and AI-driven innovation alone. That’s before even mentioning the fact that 7 million open positions were left unfilled in America due to an inability to find employees with the necessary skills.
But reskilling and employee training shouldn’t be relegated to a mere requirement to meet the rapidly changing demands of the modern workplace. Effective employee retraining and reskilling can also lead to considerable gains in retention rates and overall business performance. There’s a reason that the world’s leading CEOs rank investment in people as the number one way to accelerate performance. Let’s take a look at why this is the case.
The Best Retention Strategy Is Continuous Employee Training
Today’s employees have never valued continuous training as much as they do today. With three-quarters of the workforce set to be made up of the millennial generation by 2025, forward-thinking employers are changing their approach to match employee demands.
With 87% of millennial workers rating continued professional training as very important in their job considerations, companies that neglect their in-house training will lose their top talent to those with comprehensive training programs. In a world where “portfolio” careers are now the norm, you have to provide much more than a paycheck to stimulate loyalty.
Furthermore, by making that investment into employees, businesses are able to demonstrate that they value their employees. Workers will enjoy being challenged through training opportunities, even if the subject material covers core competencies. Research shows that 40% of employees who don’t receive the necessary job training to become competent in their role will leave their position in the first year. With the cost of replacing a new hire placed at $30,000 by Oxford Economics, the average training spend of $1,500 per employee is a drop in the ocean by comparison.
Therefore, by making a concerted effort to improve your in-house training programs, your company will be able to reap the rewards of an engaged, happy, and most importantly, loyal workforce.
Retraining and Reskilling Provide a Competitive Advantage
Reskilling employees shouldn’t just be an exercise in reducing employee turnover, however. Many businesses have already recognized the potential to improve business performance through continual investment in employee development.
The figures demonstrate this to be the case. A study from the American Society for Training and Development (ASTD) uncovered that companies with comprehensive training programs earned 218% higher income per employee than those without formalized training. Better still, those companies also enjoyed a 24% higher profit margin than competitors who skimped on training investments. So what are the driving forces behind such dramatic results?
Firstly, training considerably increases employee productivity. At some companies, individuals never receive the level of training required to perform their role optimally. However, those who continue to invest in skills advancements witness significant leaps in productivity as employees are better able to adapt to the changing demands of their role and utilize new methodologies to achieve faster results.
Fascinatingly, some of these skills advancements are fundamental in nature. According to a study carried out by the Warwick Institute for Employment Research, one in ten employees lacks entirely the digital skills required to carry out their duties. This is because companies forget that – in our increasingly digital economy – retraining is necessary for even the most basic of concepts. For instance, look at how simple Microsoft products (such as Windows, Word, and Excel) have all changed over the last decade. Yet many employees are operating without any knowledge of how to take advantage of their latest capabilities.
Another facet of improved business performance through retraining and reskilling is agility and flexibility. As corporate structures become flatter, and roles and responsibilities more varied, each employee will increasingly become a “jack of all trades.” By doing so, companies can quickly react to increases in demand, pivot to new markets in turbulent economic conditions, and reduce hiring spend. Those who overlook reskilling their employees could be left with an incompetent workforce left behind by market innovation.
Automation and Artificial Intelligence Are About to Change the Labor Market Permanently
The most prominent driving force behind the need to retrain and reskill employees is automation technology driven by Artificial Intelligence (AI). The figures are stark. Up to 1.4 million American workers will need to be reskilled by the year 2026, with 70% of those needing to do so because their job will cease to exist. What’s more, by 2030, 15% of the global workforce will have their job function carried out by an autonomous machine.
When this scenario comes to pass, 82% of executives at firms with a turnover of over $100 million believe that retraining and reskilling will account for over half of the answer to the resulting skills gap. Forward-thinking companies are beginning the retraining and reskilling process now to facilitate a smoother transition and to steal a march on competitors that have been slow to react.
Those that invest little in retraining and reskilling over the coming decade will quickly feel the burden of trying to cover their employee skills gaps with costly hiring processes, which could ultimately result in financial ruin. Therefore, it makes sense to start building a retraining and reskilling program for your employees today, to ensure you can compete as a business from 2030 onwards.
Employers Need to Implement a Retraining and Reskilling Program or Face the Consequences
Retraining and reskilling your employees offers minimal downside and a huge upside. And yet, many companies continue to overlook opportunities to introduce programs that could lower employee turnover, improve business performance, and help the transition into a more autonomous economy.
In a market where millions of job positions are left unfulfilled, as an employer, you need to focus on retaining your highest-performing talent as well as getting the most out of them by providing them with the skills they need to perform their roles. Furthermore, with technological innovation set to alter the landscape of the global economy permanently, your company cannot afford to be slow to react. Employees without the necessary skills to thrive will leave your company on the edge of collapse as you scramble to hire the knowledge you need to survive.
Here at Offer Accept, we can provide businesses with advice on how to beat the impending skills gap while providing access to talented individuals equipped with the skills to navigate the technological innovation taking place over the coming decade. Just give us a call on 305-910-2524 to discuss your recruiting needs with an expert.
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