How can employers avoid the ‘hidden tax’ of obsolete skills?

by | Feb 27, 2020 | Career, Future of work, HR, Leadership, Talent Development | 0 comments

How can employers avoid the ‘hidden tax’ of obsolete skills?

Observers agree on one key point: training must appeal to workers’ desire to learn.
Feb. 4, 2020

Employers, tasked with preparing for accelerated industry changes, may be overlooking critical flaws in one key area of operations: talent development.

That was the conclusion of a Jan. 15 Boston Consulting Group (BCG) report, which said employers in several countries face two obstacles:

  • First, there is a universe of individuals who have qualifications, like a college degree, that could land them high-skill roles, but who lack opportunities to do so.
  • Second, current employees whose qualifications and training are insufficient for their roles under perform. Such employees may require additional training that is never fulfilled, BCG noted.

Both trends produce a “hidden tax” for employers and employees, BCG said. Employers spend more on training and retraining, and those costs may be increased if an employer doesn’t assign retrained employees to positions that allow them to work to their full potential. At the same time, a mismatch between an employee’s skill set and role can lead to missed income, employment prospects and career development for the worker.

Credit: Ryan Golden/HR Dive, data from Burning Glass Technologies

Learning and development programs may aim to reduce costs, but a focus on metrics like time-to-completion can only take employers so far. When it comes to solving for future skills mismatches, employers need to rethink their approach and bring learning into the organization’s broader goals, according to sources who spoke to HR Dive.

Remember the basics

Employers have probably heard talk of skill mismatches before, Dale Rose, president of consulting firm 3D Group, told HR Dive in an interview. “We’ve been hearing it for a while,” he said, “but one thing we’re wondering is, when?”

Focusing on the timing of business transformations can be a helpful frame for employers and ultimately, employers need to remember the basics. “Training is a narrow set of specifications around specific skills,” Rose said. “Companies need to map out: what are the skills, jobs and attitudes needed to shift?”

Talent development should be synced with business strategy, Bob Ryan, executive advisor at Shields Meneley Partners, told HR Dive in an interview. “I believe that companies see training and development as something separate from the business strategy, and that’s the real issue,” he said.

It’s easier to accomplish this if HR already has a stake in forming business strategy, Ryan noted. He gave the example of a retailer that can see its business increasingly moving to e-commerce. If the organization can recognize that e-commerce will be a major trend during the next five years, HR can strategize with other departments to prepare front-line workers for the accompanying changes to their jobs.

Taking a broader view can also help L&D teams get a better idea of how relationships between different roles will change. That’s another critical piece, Rose said, because those relationships will define how each position looks in the future.

One critical, ‘overlooked’ element

Building a career roadmap of needed skills is important, Rose said, because it can appeal to high-potential employees who don’t have the tolerance for a “low-learning environment.” Rose doesn’t believe organizations are still developing training plans to keep workers around forever, but he said road maps are good models for employers as they determine which gradual changes need to be made to existing job descriptions.

Learner motivation is “really overlooked” in the training discussion, Rose said, and it may be the most difficult piece for employers to solve. “The most gamified app on the planet won’t make somebody want to learn,” he said. “That’s the piece that employers are going to struggle with.”

One key strategy to approach this issue is to think about the needs of the individual. That can mean providing different modalities, or formats, through which to deliver training, Rose said, but he believes employers will determine which training paths appeal to individuals.

BCG, in its report, suggests a similar “human-centric approach,” adding that employers “should select employees on the basis of their skills and values and should provide opportunities for personal self-realization in the workplace.”

Large companies have increasingly sought to give employees choice in determining which training path to take. Amazon, in unveiling its Upskilling 2025 program last year, said it would offer the opportunity for workers across several job types to train in both high-tech and non-tech career fields. Walmart, which offers a $1 per day degree program, previously said it plans to expand degree-earning options into a number of disciplines.

Even those who operate on a smaller scale can take a direct approach in asking employees which development opportunities they’re most interested in, Ryan said. Sometimes, that’s as simple as posing the question to employees in focus groups.

Last but not least is leadership. “Leadership and leadership development can help create the environment that will allow that sort of growth and development to occur,” said Rose, who noted that motivation is one of organizational leaders’ many levers.

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