Preparing for the Future of Work: Build vs. Buy Talent?
Preparing for the future of work is a top priority of CEOs and business leaders. In the past, organizations tended to lay off employees and hire new ones when they wanted to move the business in a new direction. However, with tight labor markets and the fast pace of technological development, business leaders are beginning to recognize that retraining existing talent for new roles is more effective than competing for scarce talent. While reskilling for future skills requires long-term planning, the cost of disruptive layoffs and hiring can be more expensive than providing continuous training for employees.
In this post, we’ll consider why it makes sense to build vs. buy talent by reskilling your existing workforce and look at a few of the ways leading companies are approaching this strategy.
The case for building your own talent
One of the biggest reasons companies are prioritizing building their own talent is the cost. Josh Bersin calculates that it can cost as much as six times more to hire from the outside than to build from within. In a recent article on this topic, Bersin writes, “It’s quite simple: the economy has created a bidding war for people with critical skills, increasing the cost and risk of hiring from the outside.”
It’s not just about the price tag, though. Companies that dedicate resources to reskilling existing employees build a learning culture while promoting career development and employee engagement. This will be especially important as younger generations enter the workforce. A study by Robert Half found that 91% of Gen Z say professional training is an important factor when considering employers.
Our research shows that many companies are already beginning to reskill employees. A significant percentage — 59% — of L&D leaders said they’ve reskilled 10–20% of their workforce in the last year, and 64% of organizations already have an informal or formal reskilling program. And employees show an increasing openness to reskilling: 29% of L&D leaders surveyed by Udemy said their employees are excited to learn new skills and only 12% were afraid they would lose their job.
According to research by McKinsey, there’s a clear connection between company performance and willingness to reskill employees: an overwhelming percentage — 63% — of high-performing organizations favor in-house training for strategically important analytics roles.
Build your talent internally
Find out how Udemy for Business can help your organization build your talent internally through continuous online learning programs.
Let’s explore how companies are taking the “build” approach by reskilling their existing workforce.
4 ways L&D teams are building talent internally
1. Booz Allen Hamilton introduces learning at scale
Booz Allen Hamilton, a management and technology firm, strives to be a game-changer in the data science field. Aiming to help their clients harness data in ways they’ve never used it before, they set a goal to employ 5,000 data scientists over 3 years. Due to the talent shortage, they knew they couldn’t rely on hiring data scientists externally and instead decided to double down on training existing employees for new data science roles. In order to meet this goal, the L&D team at Booz Allen Hamilton created a personalized learning program at scale.
The lean L&D team played the role of “learning experience architects.” They developed an ecosystem with curated content, technologies, and platforms using Udemy for Business and Degreed. This program relied on four tactics to scale learning: online assessments to tailor learning, personalized online learning pathways, a blended learning model that focuses classroom time on hands-on projects, and mentor circles that guide the learning journey. To learn more about this program, see How Booz Allen Hamilton Is Winning the War on Talent.
2. Skills mapping helps L&D identify gaps
One important aspect of building talent from within is understanding which skills will need to be updated. Josh Bersin writes, “Every employee in the company should understand what skills are most in-demand and how they will be used, so they can prepare themselves for jobs of the future. This type of transparency creates excitement and empowers people to join, contribute, and reinvent or transition their roles.”
While all employees will want to have a sense of which skills they’ll need in the future, L&D teams need to have a detailed understanding of their company’s gaps and how to address them. Skills mapping is a visual representation of skills needed to perform desired roles as compared to the existing skill base of an organization’s workforce. This exercise helps HR and L&D leaders identify key skill gaps. Skills mapping, also called competency mapping, can be done for individual career planning as well as future skills training for an entire workforce.
As organizations tackle workforce reskilling, they’re beginning to hire experts to help map existing workforce skills and future skills. JPMorgan is working with the Massachusetts Institute of Technology’s Initiative on the Digital Economy to forecast emerging skillsets for its workforce. JPMorgan is also piloting a “skills passport” platform in its IT department. The platform enables employees to assess current skills as well as browse new roles and the necessary training to achieve this next step in their career.
We expect that over the coming years, organizations will take a deeper dive into skills mapping to prepare their workforce for what’s next.
3. Focused Capability Academies are replacing ad hoc training
Companies often use an ad hoc approach for their talent-building efforts, according to McKinsey. They hire new workers equipped with the desired skills or apply ad hoc training when needed. But these quick-fix tactics aren’t enough to transform an organization and continuously keep up with the pace of technology and business change.
According to McKinsey, “While hiring new talent can address immediate resource needs, such as those required to rapidly build out an organization’s AI practice at the start, it sidesteps a critical need for most organizations: broad capability building across all levels.” This is best accomplished by training current employees using in-house capability programs.
We’re beginning to see Capability Academies being implemented at Udemy for Business customers. For example, Publicis Sapient, a business and technology consulting firm, reorganized their organization and learning & development team by “capabilities.” For the artificial intelligence capability, they launched an AI Academy to provide in-depth training for existing employees in AI and data science. See Learning at the Speed of Business.
4. Communities of practice are keeping skills up to date quickly
Josh Bersin reports that the average time required for a worker to gain enough knowledge to successfully reinvent their career due to AI or automation-based job disruption is around 15 months. This means that companies will need to seek many ways of reinforcing and sharing knowledge. To complement in-depth learning offered by Capability Academies, social learning communities are on the rise to support learning on the job.
In the software developer world, for example, industry standards change quickly and are often set by consensus. A group of developers may share a best practice, and the industry will move in a new direction almost overnight. This makes it hard to keep up with best practices and curate the right course material to upskill your team.
To keep skills aligned with the latest trends in the industry, we see companies increasingly rely on communities of practice. For example, when developers run into a problem with a line of code, they naturally like to collaborate and ask their peers for help. But instead of only tapping the shoulder of their neighbor, they’re creating a virtual community of developers to serve as a collective brain.
Communities of practice aren’t just an organic peer learning effort. Learning & development teams are also creating structured learning around their communities. This might include monitoring Slack for commonly asked questions and creating content for in-person and virtual sessions around these issues. Online courses or lectures can be assigned as pre-work while in-person sessions focus on hands-on practice and discussion.
In addition, social communities are also being used for nurturing soft skills like sharing management tips on how to give feedback or be a good mentor. See How Slack Promotes Social Learning at Work.
The Power of Peers: A Framework to Promote Social Learning at Work
Discover how Slack promotes peer-to-peer social learning through a 3-stage framework.Download eBook
As new technologies disrupt the world of work, L&D teams will need to look for ways to reskill their workforce and adapt to these changes. We’ve covered a few of the ways ground-breaking companies are taking the build vs. buy approach to reskilling their workforce. Read more in our 2020 Workplace Learning Trends Report.