Quick look: As competition rises and the Great Resignation continues, small- and medium-sized businesses (SMBs) are recognizing the value of developing their existing talent to close the skills gap, improve employee satisfaction, and future-proof their organizations—all while keeping costs under control.
Employee turnover has always been a hurdle for businesses. According to some reports, the average cost to fill a position in the U.S. is around $4,000, and per SHRM, between 2010 to 2015, it took employers approximately 68 days to identify and hire the right candidates. Large organizations can absorb this lost time, productivity, brainpower, and cost of bringing on new team members better than small- and medium-sized businesses.
When employees leave, the cost to the company is more than just recruiting and onboarding. Longtime employees take with them years—in some cases, decades—of valuable experience that can’t be easily replaced.
With competition for top talent rising and the Great Resignation still in full swing, more SMB employers are turning to “building rather than buying” talent to strengthen their workforces.
The skills gap is widening
As the global economy changes and technologies like automation shift the way the world works, the chasm between employer needs and employee qualifications continues to widen.
Per IBM, more than 120 million workers in the world’s twelve biggest economies will require reskilling or upskilling. Training employees for emerging opportunities may be more than a nice perk—it will soon become a business necessity.
SMB employers are most vulnerable to the widening skills gap. Unlike bigger businesses whose many employees may mask weakening collective skill sets for longer, teams at SMBs are often stretched thinner. For SMBs, failure to keep up with emerging skills will become more and more of a liability.
Employees themselves are also aware of the importance of learning new professional skills. According to a 2021 survey from Boston Consulting Group, a whopping 68% of employees are willing to train for entirely new roles. Per LinkedIn, 94% of employees said they would stay at their job longer if company managers invested in helping them learn. Acquiring new skills is a win/win for employers and staff.
Uncovering which skills are needed
As an SMB employer, it can be difficult to determine which skills your employees have mastered and where they may be falling behind. This is especially true if your business has grown significantly, or your services have evolved since your company’s inception.
Many types of leading HRIS software feature built-in skill assessment tools to gain a baseline understanding of where your teams need additional training. Partnering with a professional employer organization (PEO) is another way to determine if your employees are current with today’s skills trends. The HR experts at PEO companies like ExtensisHR watch industry trends as well as local and national jobs reports, so they know which skills are emerging as being important for the future.
Another way to uncover trending skills is by consulting with peers in your industry. Discovering where they have decided to focus their learning and development (L&D) efforts may help you determine where to start yours.
Finally, don’t be shy about asking your employees which skills they think would help them in their daily positions and support their future career goals. Many employees may not know exactly how to articulate which proficiencies they are lacking, so working with a PEO company may help. PEO experts can assist you with structuring questionnaires or employee interviews to uncover where your L&D investment will be most productive.
Let employees know why it matters
Once you have an idea of which training would be most beneficial to your staff, you must structure your L&D programs carefully. Employees may be resistant to forced reskilling, especially if the initiative seems to come from out of nowhere. Your investment is doomed to fail if employees don’t complete the training programs or can’t see how their new skills will relate to their daily jobs.
As with many aspects of HR management, transparent communication is key. Loop in your employees as you develop the appropriate L&D programs for your organization. Solicit employee input and share why these initiatives are important for the organization’s success and their own career goals.
Show your employees that L&D is more than just lip service—it’s a valuable part of your company’s culture. Employees who see that you invest in them feel more engaged and are more invested in your success in return. Reskilling or upskilling keeps employees contributing to your organization’s success for longer.
Another reason to keep employees in the loop is to boost morale. Many employees have a knee-jerk reaction to change or what they perceive as “being asked to do more work without more pay.”
Consider tying L&D program completion to financial incentives, title changes, or pay raises, keeping in mind that employee turnover is more expensive and disruptive than incrementally elevating employee salaries and benefits packages in the long run.
Demonstrate the connection between employees’ new skills and opportunities within your company. This may require you to formally outline career paths within your business. The experts at PEO companies can help you define clear roadmaps for future growth for every position in your organization.
Another way to encourage support of an L&D program is to invite employees to put their abilities to work right away through new projects or initiatives. Being able to apply their newly acquired skills immediately provides greater satisfaction and locks in new learning for the long haul.
Future-proof your workforce
Building a resilient workforce of professionals who are prepared to take on the future means investing in your existing talent today. Continuous learning isn’t a quick fix—it’s the backbone of a solid, long-term strategy for your organization’s growth and development. Fresh ideas and new perspectives always inject creative thinking into an organization, but it’s crucial to never let the capabilities of your current talent pool grow stale.
Instead of focusing on bringing on new hires to fill your organization’s skills gaps, know that you already have the talent you need. Now it’s time to develop them. Let our HR experts show you how to help your employees reach their peak professional potential. Contact ExtensisHR today.