Companies can’t wait to upskill their workforce

Time is of the essence for companies managing a combination of issues starting with the ongoing global shortage of workers and an imminent economic downturn. Organizations are hindered in their ability to transform, drive efficiency, lower costs, and find and attract people with niche skills to meet business growth aspirations—all while competing with others for the same scarce talent.

The workforce is changing, our environment is changing, and in order for companies to stay competitive, they need to focus on their internal pipeline and people. Chief Human Resources Officers (CHROs) are tasked with helping the businesses they support transition their employees to do more with less as quickly as possible.

The talent shortage has become a steady state

Organizations need to move quickly to compete for employees in an increasingly shallow talent pool. When the economy reopened after the height of the COVID-19 pandemic, demand outpaced supply and continues to do so—a phenomenon economists refer to as “labor hoarding.” Baby boomers are retiring, immigration has declined, and many workers never fully returned for a host of reasons, including ongoing physical and mental health issues.¹

Costs to recruit and retain employees have only increased, and companies can’t simply wait out the talent shortage. Labor market challenges will not easily subside, according to KPMG Economics, and the staffing squeeze may get worse before it gets better depending on the trajectory of a global recession.³

Business leaders have turned to CHROs for help with finding talent that can keep pace with growth demands even as HR departments face the same talent shortages. Upskilling/reskilling as part of a talent development and retention program is business critical.

The very nature of how and why we work has changed

The labor shortage only intensifies the need for employees to expand their skills.

In the past, employees labored as cogs in a wheel, learning skills to complete a series of tasks and developing competencies around that same set of tasks. The world moves faster today. Needs are dynamic, and learning must be agile enough to meet changing demands. More workers are asked to expand skills outside their immediate tasks as well as take on additional responsibilities and think critically.

Trends driven by technology, generational dynamics, and other factors also are likely here to stay and are bolstering the need for continuous rapid upskilling.

First, new demands on the business—including artificial intelligence and other technologies, shifting business models, and new ways of working—require employees to think, interact, and behave differently. Second, companies need to shift and train employees for where they are needed, often by enabling career mobility through an internal talent marketplace to respond to rapidly changing market conditions. Third, certain talent gaps and niche roles are often best filled with internal resources. And fourth, upskilling is an important component of career development for attraction and retention strategies.

Meanwhile, employees increasingly seek more meaningful work that is aligned with their values and aspirations. On-the-job learning done well can keep employees excited and help them learn new skills to improve efficiency so that they focus on more creative and enjoyable work.