Upskilling HR
#evolve Magazine
July 15, 2022

The Job Openings and Labor Turnover Survey showed that 4.4 million workers left their jobs in May, which continued a steady trend during the past calendar year. In addition to an extremely tight labor market, organizations are facing a historic talent shortage as well.

There are a record 5 million more job openings than unemployed people in the United States.

A natural solution for employers has been to increase compensation to retain existing employees and to attract new talent to fill labor gaps. However, many organizations are also supplementing this approach by investing in upskilling opportunities for their workforce.

A WorldatWork Pulse Poll conducted in March, for example, found that 57% of organizations have increased upskilling opportunities for their employees in the past 12 months.

The investment in upskilling serves a dual purpose as well. When employees are offered and encouraged to take advantage of upskilling opportunities for their personal or professional growth, people metrics, such as employee engagement and retention, also go up, notes Harvard Business Review. In addition to improving retention, the organization also has more talent on hand capable of filling important roles instead of investing more resources attracting outside talent.

In support of this concept, WorldatWork’s Pulse Poll found that 35% of organizations that increased their investment in upskilling did so to meet changing needs within their organization, while 32% did so to enhance the employee experience and engagement. Twenty-seven percent did so for talent retention purposes.

“As employers continue to navigate an incredibly tight labor market, it is apparent that compensation cannot be the answer to all instances,” said Alicia Scott-Wears, compensation content director at WorldatWork. “Upskilling offers a rewarding enrichment to the employee experience that benefits not only the employee themselves but typically also the employer.”

The Value of Upskilling

A survey by Talent LMS and the Society for Human Resource Management (SHRM) found a correlation with upskilling and retention. Out of approximately 1,000 employees who were surveyed, 76% said they are more likely to stay with a company that offers continuous training.

In a session at WorldatWork’s Rewards ’22 event in May, Fermin Diez, an adjunct professor at Singapore Management University and longtime consultant in the HR space, explained how employee rewards are evolving beyond standard compensation. Diez said the modern workforce is demanding a more personalized rewards experience, which includes better opportunities to learn and develop.

“We need to think about pay differently,” Diez said. “People want to be paid for skills and they want their organizations to help them attain these skills, which is an important component of rewarding them.”

Additionally, Diez and his co-presenter Steve Brink, president and chief revenue officer of uFlexReward, said organizations should consider paying for development by linking base pay to competency growth and variable pay to performance. It will also behoove companies to pay employees by linking pay to knowledge and the application of employees filling skills gaps within the organization.

This, of course, comes with the caveat that organizations must be invested in offering these upskilling and development opportunities to their employees. The WorldatWork Pulse Poll found that 76% of organizations are indeed providing upskilling opportunities for their overall workforce, which indicates progress on this front.

“At a baseline, it just offers more engagement to employees,” said Ashley Jordan, senior customer success manager at Docebo, a provider of AI-powered learning technology. “It signals to the employee that their employer cares about their development and wants them to not only succeed in their current position by giving them the tools necessary to do so, but they’re also offering them the opportunity for movement within that company. So, you’ll see greater engagement within that job role, but also more productivity overall.”

Jordan noted that most organizations are trying to assess and determine what the return on investment (ROI) is for each business process. When it comes to developing your workforce, the roadmap to the ROI is fairly easy to track, she said.

“If you offer more training opportunities, they’re probably more likely to stay in your organization,” Jordan said. “You’ll notice less turnover, less attrition and more ROI in the long term by developing existing talent rather than going to market and finding new talent.”

“HR and people leaders will have to be the forward-looking eyes of the organization.”

A Disconnect Exists

The COVID-19 pandemic underscored the importance of the HR function, as the health and well-being of employees became more of a focus. As a result, more organizations have tilted toward a “people first” approach, which has further thrust HR into the spotlight.

Lisa Chang, global chief people officer at the Coca-Cola Company, was one of many leaders at WorldatWork’s Rewards ’22 event who spoke about how the best organizations are increasingly leaning on HR to push them forward during this exceedingly tight labor market.

“I think you’re going to see more organizations recognize that the most important role of the CEO is to make sure you have the right people in the right positions,” Chang said. “And that typically comes from the HR function.”

With this in mind, it would stand to reason that upskilling and development opportunities would become more prevalent for HR professionals within forward-thinking companies. However, the organization that is responsible for identifying and implementing development and upskilling opportunities for the workforce — human resources — typically do not have access to the same level of upskilling themselves, a separate WorldatWork Pulse Poll found.

The poll found that 34% of organizations are not providing opportunities to upskill their HR department compared to the 24% of organizations that are not providing upskilling opportunities for their overall workforce. This is an area leadership should address, as it could also help alleviate talent and retention issues, given the prominent role HR plays in an organization’s success in those two areas.

The poll also found that upskilling opportunities for the HR department are limited to certain areas of business need for 40% of organizations. Examples of these upskilling opportunities included diversity, equity, inclusion and belonging (55%), performance (48%), workforce engagement (44%), rewards (43%) and compensation (43%).

While all five areas are clearly significant to the business, organizations that go beyond these areas in upskilling their HR department are better positioned to navigate the future of work, said Scott-Wears.

“Organizations that invest in their employees’ personal and professional development, which allows them to find purpose and reward in their work, are better positioned to achieve the loyalty of top performers that are skilled in the areas the business needs most,” she said. “HR is crucial to business success and yet one-third of respondents are indicating no upskilling is being provided to this critical function.”

As organizations continue to look toward HR and people leaders for answers in navigating uncertain times to sustain and grow the business, more access to career growth through all the levels of the HR department could prove highly beneficial.

As Malika Terry, vice president of total rewards at UPS, said at the Rewards ’22 event, HR and people leaders will have to be the forward-looking eyes of the organization.

“There’s an intersection between rewards and business acumen,” Terry asserted. “We see what’s on the horizon and we know what’s happening in the industry. It’s time for us to harness that and take it back to our business leaders.”

Thus, investing in upskilling this portion of the business could prove to be a pivotal differentiator.

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