Why is investing in learning and development the right thing to do now?

There has never been a better time to invest in learning and development and employee training. But why now you may ask? What makes 2021 so special? Well, as the world slowly starts to re-build itself in the wake of COVID-19, many aspects of ‘business as usual’ have changed irreversibly. You could say that organisations of all sizes are now working under the pretence of ‘business as unusual.' The pandemic caught so many businesses by surprise and has led to learnings of all kinds, whether for small lifestyle businesses right up to multi billion dollar multinationals. 2020 really was an unprecedented year. Almost overnight, businesses across the world had to adapt super-fast to home working arrangements. This created physical distance and disconnection between teams and ‘Zoom and Microsoft Teams’ fatigue became a thing.

Millions of people were put on temporary leave, furlough and wage subsidy schemes. This means that whole sections of the global workforce spent extended periods of time away from their day-job. Whilst some took time to up-skill and stay close to their roles, others had no choice but to take on new roles as home-school teachers and found enterprising new ways to make a living. The upshot is that there is an urgent need for these people to be re-trained and up-skilled, ready for re-deployment in the workforce. Aside from the effects of the pandemic, rapid industrial and technological change is meaning your people will need to dramatically shift their skill-set and this is the first area we will look at as part of our deep dive.

The speed of technological change fails to give-up, driven by global organisations and startups who are on a mission to disrupt the way things are done. Thus upending and shifting entire industries. According to a recent McKinsey report as many as 375 million workers (or roughly 14% of the global workforce) may need to switch occupational categories as digitisation, automation and advances in artificial intelligence disrupt the world of work. In order to adapt to these shifts, your organisation is going to need to develop entirely new competencies from the ground up, bringing these skills to existing employees and ensuring the next generation of recruits will be able to bring this knowledge capital with them. There are few industries that will be untouched by these structural business changes. The very way the world does business is evolving — whether through automation, advanced manufacturing or blockchain based value exchange. As history has taught us, it’s the organisations who look forwards and up-skill with employee training programs ahead of the curve that come out on top. So think about your own industry. What’s coming your way? — and how can you prepare for it?

Employees are spending 130% more time learning

Research carried out by LinkedIn showed that employees are spending 130% more time learning and that globally, Learning and Development professionals reported a 159% increase in their CEO’s championing learning and development in their organisations. This reflects a number of trends. As we mentioned, the COVID-19 pandemic has quickly and dramatically accelerated the need for new workforce skills. The rapid ‘digital transformation’ taking place and the switch to hybrid ways of working (characterised by a mix of home and office based work) has placed new demands on employees who now require new skills to get work done. McKinsey has done a lot of research to understand how businesses can thrive after the COVID-19 pandemic. A majority of respondents (58%) said that closing skill gaps in their companies’ workforces has become a higher priority since the pandemic began. Sixty-nine percent said that their organisations do more skill building now than they did before the pandemic. And looking forwards, more than 50% of respondents said that their companies plan to increase their spending on learning and development. It’s great to see business leaders championing employee development. So what does this mean for you? You should certainly benchmark yourself against your competitors and other organisations that you admire. How does your employee training and development offer stack up? Are you losing ground? If so, think about how you can catch up.

As the competition for the best talent intensifies in certain industries, it’s more important than ever before to consider the total benefits offer you provide. While pay rises are important, 65% of all skilled professionals rate learning and developing new skills as the most important priority for them (Hays Salary Guide FY21/22 for New Zealand and Australia). “Employees are looking for more than just a salary, they’re looking for more than just a job; they want careers,” said Natalie Britt, Human Resources Director at Sydney International Convention Centre.

You have to provide more than just your base salary and your wage increases to retain top talent. You need to review your reward and recognition programs. Make sure that when you're looking at the whole employment package, it is looking at those internal promotional opportunities, it is looking at those secondment jobs that you make available for these people, but it’s also tailored training programs that you offer.

— Natalie Britt, HR Director, Sydney International Convention Centre.

It’s not only employers and organisations that are aware of the speed of change. Employees at all levels in business know that they need to constantly up-skill and re-skill to keep themselves competitive and highly-employable. If you provide them with professional development and career progression, you’ve got the greatest chance of keeping your most important people loyal.

If you’re operating in the tech sector, there’s a good chance you’re being affected by the struggle to get enough skilled staff. Despite strong job growth and thousands of tech jobs being created every year, New Zealand’s tech sector is struggling to get its hands on the talent needed. According to Graeme Muller, Chief Executive of NZTech, “digital technology businesses are having problems attracting, developing and retaining people with the tech and creative skills needed to help New Zealand grow faster.” The seriousness of the problem facing the tech sector was also called out by recruitment firm Hays who’s 20/21 Salary Guide report identified a serious skills shortage. Hay’s AU and NZ Managing Director Nick Deligiannis said “Technology is a huge one because the demand for technology is exponential, such as cloud-based specialists, UX/UI and in cybersecurity. In those areas, there is a real shortage of talent and skills.”

According to the report, which is based on survey results of nearly 3,500 organisations, 68% of the local technology industry is suffering from skills shortages.

With the skills shortage being such a reality for businesses, it means employers need to be even more serious and urgent about the demands from tech talent for the very best employee growth and training and development opportunities. This added value for employees can be delivered in many forms, from online learning platforms to skills development, coaching and career development programs.

The business case for inclusion and diversity is stronger than ever, but evidence shows that even despite attempts to deliver diversity and inclusion training, not enough progress is being made in this area. However, the business case for stronger business diversity is too compelling to ignore. McKinsey’s extensive research into diversity and inclusion show that the relationship between diversity on executive teams and the likelihood of financial outperformance has strengthened over time. Their findings come from their largest data set so far, encompassing 15 countries and more than 1,000 large companies.

Here’s what they found:

• While most have made little progress, are stalled or even slipping backwards, some are making impressive gains in diversity, particularly in executive teams.
• When it comes to profitability, the most diverse companies are now more likely than ever to outperform less diverse companies (in the same sector)
• Their 2019 analysis finds that companies in the top quartile for gender diversity on executive teams were 25% more likely to have above average profitability than companies in the 4th quartile
• The greater the representation of diversity, the higher the likelihood of outperformance

Whilst these numbers are impressive, not enough businesses or organisations deliver diversity and inclusion training as a matter of course. With the compelling findings and business case shown in McKinsey’s report, the time is now to put processes in place to review the level of diversity and inclusion in your organisation, in line with tracking employee progression and identifying training needs. The need for Diversity and Inclusion goes beyond a business case or benefit. It’s the right thing to do.

In conclusion, there’s so many compelling reasons why 2021 should be the year you step up a gear in your investments in learning and development. It truly is a win-win situation for businesses, executive teams and employees. Training and development brings productivity increases, boosts knowledge capital and unlocks pathways to do business in the most exciting fields. It prevents knowledge capital and skills from leaking away by keeping the most skilled and talented people inside. That then opens up the opportunity for knowledge transfer, so your most junior people can learn, develop and be inspired by your most skilled and knowledgeable people. With the state of business in 2021 and the rapid pace of change, you’d be hard pressed to find a reason NOT to focus on learning and development going forwards.