As the country continues to reopen following the coronavirus pandemic, so too is the job market. According to the most recent jobs report from the U.S. Bureau of Labor Statistics, there are more than seven million open jobs right now in America. This is good news.
Yet at the same time, the COVID-19 pandemic has exacerbated certain workforce trends, leaving the job market with record low labor force participation. Analytics firm Emsi, which specializes in labor market data, calls this the Demographic Drought. The massive retiring of Baby Boomers, which was accelerated by the pandemic, has taken a huge portion of the working population out of the market. According to Pew Research Center, more than 3 million Baby Boomers decided to retire in 2020 – a historic high. And many individuals who are able to work are choosing not to due to varying effects of the pandemic.
The pandemic has also changed the talent market in several ways. Many in-person or public-facing roles have diminished as we move towards remote delivery of goods, services and information. Due to the changing nature of these roles, along with furloughs and lay-offs, the pandemic has forced many employees to be retrained so that they can move into new roles. And as the divide between those with in-demand skills and those without continues to grow, employees are hungry for growth.
Additionally, as technology continues to create disruption and as companies continue to innovate, create and transform – there are exciting new skills employers can develop in their workforces. According to The World Economic Forum, 44% of the skills that employees will need to perform their roles effectively will change by 2025.
For all of these reasons, employers across the country are finding themselves in a talent predicament, with open positions available but the right talent becoming increasingly difficult and expensive to find.
But what if we looked at this predicament not as a challenge or difficulty, but rather embraced it as a way to change the fabric of our workforces? What if the very things we are seeing as problems right now are the means for solving the challenges we’ve been trying to solve all along? What if we could cultivate the right skills and build the talent we’ve been looking for?
Which leads us to the age-old question of build versus buy. The conversations we’re having at Bright Horizons EdAssist Solutions with our clients are showing an increased appetite for building and cultivating internal talent pipelines. There simply isn’t enough talent, or enough talent with the right skills, to buy out there.
Additionally, according to analyst Josh Bersin, it costs six times as much to recruit a new employee than to develop one internally. External hires are also 61% more likely to be laid off from their jobs than those who were promoted from within the organization.
Employers looking to cultivate their talent from within should consider the following approach:
1. Start by identifying growing and declining roles in your organization. Utilize data to identify which occupations are growing within your industry, which are declining, and which skills are associated with those roles. Determine the overlapping and transferable skills between these roles. Getting a lay of the land will be critical to determining where your organization should focus first.
2. Define educational paths to deliver skills needed for in-demand roles. Determine how to solve for building these skills within these occupations. What are the learning programs and opportunities? Which partners and schools provide these learning opportunities? Are there internal learning programs that can be leveraged to build those skills? Putting all of these pieces together into a comprehensive and guided user experience for employees will help them be successful in their learning journey.
3. Publicize the program and effectively transition employees at scale into new roles. Generate some buzz. Give your employees a sense of the skills you value as a company. Communicate these learning opportunities, and encourage employees to participate by showing them the possible outcomes.
This approach is called ”rightskilling,” and is a purposeful and intentional way to look across your workforce and skill a large number of employees in critical focus areas in a way that is mindful of your investment. From no-cost and low-cost options to tiered investments for more senior or specialized roles, there are many ways to create skilling programs that are within your budget and provide the return you need as a business.
As companies start to flex this muscle now, they are building the internal processes and capabilities to be able to continuously rightskill their workforces. This means that down the road, as roles and skills continue to change, they will have talent at the ready to fill those positions, and they won’t have to fight for talent in the same way.
One company we work with that has been focused on reskilling their workforce is Raytheon Technologies, which provides up to $25,000 annually towards employees pursuing degrees or certificates. To ensure the program is accessible to both full and part-time employees, Raytheon has established partnerships with a large network of universities to offer discounts to employees and provide learning opportunities across a variety of skill areas. Raytheon pays tuition upfront on an employee’s behalf to remove any financial barriers to participation. This year, the company also expanded its non-degree offering for non-credit bearing certificates, certifications and MOOCs to allow for additional credentials and short-form learning options across skill areas.
An employer in a different industry–T-Mobile–established a tuition program in 2017 to better support all of their employees, with a focus on frontline employees in particular who may be interested in growing within the company. The program enables full-time and part-time employees to use their tuition benefits at their choice of a number of accredited schools around the country and covers their tuition, fees and books, leaving employees with no out-of-pocket costs. As a result of the program, the company has seen a 92% retention rate for education program users.
Employees today are very motivated by these types of employer-provided skill development and workforce education opportunities. According to a recent research report, the majority of American workers say they would feel more motivated, more secure and better equipped to do their jobs if they had access to education opportunities offered by their employer. Employees want to learn and they want to flourish. Employers want a workforce with the right skills to execute on their business strategy. Rightskilling is the path to both – it’s good for employees, and it’s good for employers too.
Suzanne Krause is head of workforce education strategy at Bright Horizons.