Yes, You Should Invest In Upskilling Your Changing Workforce. Here's Why.
Upskilling your people is an investment in your company's tomorrow and one of the smartest moves you can make as a business leader today.
The next generation is reshaping the future of work with the new and shifting demands of their employers. Workers are embracing more fluid terms with the businesses that employ them, often opting for independent and more flexible work, or making lateral moves far more often than previous generations. With all this in mind, you should expect to decrease spending on upskilling or reskilling your people, right? Wrong. In fact, I’d recommend exactly the opposite.
The world needs more skilled workers. According to the World Economic Forum’s Future of Jobs Report 2020, companies estimate that, by 2024, around 40% of workers will require reskilling of up to six months, and 94% of business leaders say they expect employees to regularly pick up new skills on the job. The World Economic Forum also estimates that wide-scale investment in upskilling has the potential to boost GDP by $6.5 trillion by 2030.
But for many firms and workers, the pre-existing and perhaps outdated vision of professional life and organizational harmony — one where knowledge workers came to work for and spend their entire careers with large firms — has been obliterated by sweeping economic and technological trends. We no longer expect firms to invest much in our professional development because we likely don’t plan to be around for long. We know it, and they know it.
The ladder is broken — and that has its benefits — but abandoning efforts to upskill employees, whether they’re full-time or on-contract, is a shortsighted maneuver that will cost executives down the road.
Today, 80% of CEOs rank the need to facilitate upskilling as their biggest business challenge, so you’re not alone if you’re wondering if it’s worth the time and money. Here are just a few reasons why upskilling is an investment businesses can’t afford to go without.
Cultivating a talent and ambassador ecosystem
Precariously employed millennials and Gen Zers have heard about how it used to be in the olden days: You got a job with a large firm and spent many years there, if not your entire career. Firms invested in their employees’ professional growth because they knew if the employees were likely to stick around, they’d pay back that investment in higher-caliber output over the decades. Investing in education or upskilling for workers who may only be around for a short period may seem like wasted resources, but brands need to think past the short term.
Early on in my career, I landed at GE — I loved it. I heard (anecdotally) that 80% of people left in their first five years of employment there, and of those who stayed more than five years, 80% would retire from the company at the end of their careers. But here’s what’s interesting about GE: They spent a tremendous amount of time, effort and investment on training that 80% of people who left. The market and job candidates knew that being from GE was as important as being at GE (and GE knew this, too). Their training program was (and I hope continues to be) the gold standard, and those who went through it were best in class. GE knew well before today’s fundamental disruptions to the labor market that its physical products were not the only items it was selling. It was also embossing the GE seal on resumes, making it a great place to be from and a place where the next generation of talent wanted to go to.
The lesson: You are your people. If the people who are working at your firm are fantastic because you’ve invested in their development, they’re still creating value for you in the market even after you’ve parted ways — and this inevitable parting of ways is likely to happen far sooner with today’s generation of professionals than in the past. I left just shy of my five-year mark at GE, but I have huge respect for the time and investment they spent in developing me, and I continue to look for GE alumni to hire as I grow my own business.
Shared knowledge begets more knowledge
The medical world has a concept: See one, do one, teach one. It speaks to the expectation in the field of learning to practice, practice to mastery and mastery to mentorship. When you work full-time for a firm, career paths are often rather straightforward, with roles reflecting where employees stand in the hierarchy. Titles mean different things at different firms, but it’s not difficult for an HR professional to figure out how much experience a prospective hire has by looking at their current and past titles.
Independent and entrepreneurial workers, on the other hand, are self-directed in their professional growth and education. With that, it’s unsurprising that most independent workers say that clients rarely offer to pay for them to be trained. When the Gather network surveyed whether or not their clients provide on-the-job training, 71% of respondents said no. Contract workers are expected to come in with mastery and stay put. That’s unrealistic and anathema to the way skills are accrued and reputations (both for contractor and company) are built.
At any given moment, you as a business should have the most skilled people in your organization, even if some of those people will be leaving shortly thereafter. If you expect contract workers to come in with full mastery of their skills and the flawless ability to apply those to your organization, you’re doing them, their colleagues and your business at large a disservice. If you aren’t interested in increasing their knowledge base, they have little motivation to increase the knowledge of those around them.
The lesson here: Mastery is a never-ending pursuit as well as a contagious one. Investing the time and energy into upskilling every single worker who comes through your doors leads to that knowledge — and enthusiasm for the work.
Businesses shouldn’t look at someone who just left after spending three years upskilling them as a brain drain. They should be seen as an ambassador of the brand, and their achievements are testaments in part to the business’s value as an employer. Rather than resenting this new model of worker, who perhaps makes lateral moves from one company to the next or prefers to work independently for a number of employers, businesses should take advantage of the ripple effect that comes with training and upskilling them. The resulting reflection on your brand is priceless (conversely, consider the damage that can be done to your business when you have an exodus of poorly trained workers). These workers will be honest brokers — for good or ill — of your company’s culture as they wind through other clients.
As an executive, you are likely thinking about this year’s bonus, this quarter's profits or this month’s open roles. Speaking from experience, the companies that invest in their people are the ones that reap the greatest payoff. Think long-term, invest in your talent and expect that they will leave. But no matter where they go, their value accrues to your balance sheet as brand value.
Entrepreneur Leadership Network Contributor