The current labor market remains among the tightest in modern history. As such, many companies today are beginning to look with renewed interest at their most readily accessible talent pool when filling open roles: their own employees. Rather than battling for new hires in an uber-competitive job market, smart companies are moving to train and promote from within.
Tight Times Yield Smart Strategies
According to the U.S. Bureau of Labor Statistics’ latest count, there were about 7.6 million job openings in the U.S. at the end of January. Quite simply, today’s enterprises are facing a talent shortage, and it’s taking longer and longer to fill open posts. In fact, Research from Gartner-owned CEB found that median time to fill posts increased by 30 business days, or six weeks, between 2010 and 2017.
So yes, if you can’t hire the talent you need, it makes sense to cultivate it from within. Moreover, looking at upskilling as a last-ditch effort neglects the many persistent benefits of this approach. In fact, any business today that isn’t investing in its employees and giving them the tools to ascend and grow within their organizations is opening itself up to severe disruption. Internal training and upskilling are essential in a tight labor market, but they should also be go-to strategies for companies even in times when qualified candidates are more abundant. The benefits of this approach are almost too numerous to count.
The Benefits of Upskilling
First, let’s talk about the obvious bottom-line benefits that come along with a stronger focus on internal employee development. Internal training and upskilling offer the promise of cost and efficiency savings in recruitment and retention.
According to Glassdoor, the average U.S. employer spends about $4,000 to hire a new worker. That might seem like a shocking figure, but it makes sense when you add up the costs of both external recruiting (recruitment technology, job boards, background checks, hiring contractors, etc.) and internal recruitment (in-house HR staff, systems, referral rewards, etc.). Without a doubt, if a fraction of these costs were dedicated to better retaining and growing existing talent, a company could save not only in hiring costs, but also in lost productivity while positions stand open.
And the benefits go deeper as well: Not only can companies avoid expensive hiring costs by emphasizing upskilling, but they can also get more out of their current employees – more enthusiasm, greater loyalty and appreciation, and deepened dedication to doing better work. Countless studies have shown that employees who are given a chance to grow and excel within a company tend to appreciate the opportunity and engage more fully with their work.
This becomes all the more important in an era when employee job-hopping is becoming the norm, rather than a frowned-upon sign of flakiness or an inability to gel with an organization. If employers want to retain their best employees, they need to demonstrate—not just via positive reviews, but with real upskilling programs and opportunities – that they value the employee’s contributions and intend to reward them with career growth.
Millennial employees have proven to be more interested in these types of opportunities than many employers realize. According to Gallup, 87 percent of millennials said they prioritized professional or career growth and development opportunities in a job, versus 69 percent of employees from other generations. Unfortunately, the same research found that most don’t feel like they’re getting those opportunities, with only 39 percent of millennials strongly agreeing that they learned something new in the past 30 days that they could use to do their jobs better.
It’s time for companies to get serious about their internal development and upskilling programs. These programs should be a vital consideration for companies that are undergoing broader digital transformations and looking to adopt the systems that will enable them to keep pace with the future. But successful upskilling and internal development also requires a deeper cultural commitment to mentoring and employee success. When companies realign around these vital principles, they future-proof themselves against all manner of disruption, including the continual ebbs and flows of the labor market.
Conner Burt is president of Lessonly, makers of online training software.
