After The Ribbon Is Cut: Shifting The Talent Strategy To Retention & Upskilling
By Upskilling Its Workforce, A Company Can Improve Its Overall Productivity, While Positively Impacting Employee Satisfaction And Retention.
By Vince Giovannini, Senior Consultant, Deloitte Consulting LLP
The site selection process often includes 18+ months of a national search with dozens of employer interviews and meetings with economic developers, workforce development groups, and higher education institutions. While sophisticated site selection consultants perform due diligence to ensure their client’s immediate workforce needs are met, the process often emphasizes attracting new talent based on existing workforce availability but can fall short of incorporating the likelihood of retaining and upskilling employees to achieve long-term talent sustainability and operational success.
After a new employer in the community is fully staffed and a ribbon is cut, the employer must shift their talent strategy to place less emphasis on talent acquisition, and pivot toward employee retention and upskilling. This shift in talent strategy is pivotal to mitigate risk to the business operations and remain competitive with sustained growth. With average annual turnover rates as high as 25–30 percent in some labor markets and technological disruption in worker tasks in today’s evolving talent landscape, a talent strategy focused on employee retention and upskilling can not only improve an organization’s business performance but also lead to long-term success in its community.
The Relationship Between Workforce Retention and Upskilling
Workforce retention and upskilling are two interconnected pillars that play a vital role in the longevity of operational success. Upskilling can be viewed as a valuable employee retention tool. Employees who feel that their professional development is being prioritized are more likely to remain loyal to their company. According to a survey by LinkedIn, 94 percent of employees would stay longer at a company that invested in their career development, highlighting the direct correlation between upskilling and workforce retention.
Upskilling creates a pool of talented individuals within the organization who are ready for advancement. This internal talent pool promotes from within, which can enhance employee loyalty. Loyal employees who remain with the company can mentor and train newer hires, facilitating the transfer of critical knowledge and skills, leading to a stable workforce. A stable, upskilled workforce contributes to the overall productivity of the organization, which, in turn, can positively impact employee satisfaction and retention. This culture makes employees more likely to generate innovative ideas and solutions, giving the company a competitive edge in the market.
Retaining High Performers Through Upskilling
In addition to impacting workforce retention in general, upskilling can lead an organization to be more efficient and effective in their talent strategy by specifically retaining high performers. According to a Deloitte Global survey, employers are progressively shifting their workforce decisions to be more focused on skills than on jobs with fixed responsibilities. Deloitte’s survey findings show that skills-based organizations, which place skills and human capabilities at the center of their talent strategy, are 98 percent more likely to retain high performers, which can improve productivity and increase the likelihood of long-term success in the community.
Upskilling not only improves the quality of work produced but also enables employees to take on more significant responsibilities and tasks. This can lead to increased productivity, innovation, and efficiency within the organization. As the business landscape becomes increasingly competitive and technology-driven, the skills required to perform various tasks are evolving rapidly. By providing employees with opportunities to enhance their skills and stay updated with the latest industry trends, companies can ensure their workforce remains equipped to tackle new challenges. Companies that fail to invest in upskilling their employees may also risk falling behind their competitors and losing their competitive edge.
The Value of Workforce Retention
One of the primary reasons why companies should focus on workforce retention is the significant cost associated with employee turnover. It is no secret that recruiting, hiring, and training new employees can be a time-consuming and expensive process. According to a report by the Society for Human Resource Management, the average cost-per-hire for companies is around $4,129. Moreover, it takes an average of 42 days to fill a position, resulting in lost productivity and increased workload for existing employees. By investing in workforce retention, companies can save substantial resources that would otherwise be drained by a high turnover rate.
Beyond the financial implications, a high turnover rate can also lead to negative impacts on company culture and morale. According to LinkedIn research, employees that feel undervalued or unfulfilled within their roles are more likely to seek opportunities elsewhere.
Implementing a Talent Strategy Focused on Upskilling & Retention
To integrate workforce retention and upskilling into an organization’s talent strategy, employers may consider the following strategies:
- Customized training programs: One of the most effective paths to upskilling current employees is creating customized training programs tailored specifically to strategic areas in the organization in need of upskilling. Recognizing that employees have unique skill sets and areas for development, organizations should invest in tailored training solutions that address these specific needs. Organizations can connect with local workforce development partners or higher education institutions to develop personalized training programs that can help employees enhance their skills, become more proficient in their roles, and ultimately feel valued and supported in their professional growth. This commitment to individual development not only enhances employees’ sense of job satisfaction but also equips them with the necessary tools to excel in their current roles and take on additional responsibilities in the future. Community leaders can also be proactive in their business retention and expansion efforts by meeting with employers to understand their current workforce skills gaps and working together to identify resources in the community to build strategic partnerships and curate training opportunities for the employees.
- Career path development and growth opportunities: Career path development is another crucial element in a talent strategy focused on upskilling and retention. Employees have a natural desire for career progression and opportunities for growth. By offering clear and structured career paths, organizations can demonstrate their commitment to employees’ professional development and motivate them to stay with the company for an extended period. This can be achieved through comprehensive performance management systems, mentorship programs, and providing opportunities for job rotations or cross-functional training. By investing in career path development, organizations not only keep their employees engaged and satisfied but also promote a culture of continuous learning and improvement.
Upskilling allows employers to be creative in their career path development by cultivating new routes in career development that may not have been historically available. Skills-based organizations with internal training programs create opportunities for employees to stay with their current organization, while also reaping the benefit of a career change or career advancement. This allows employers to retain employees while also filling evolving workforce needs in the organization.
- Being creative with recognition and rewards: It is no secret that compensation and benefits have a direct relationship with employee retention. However, traditional forms and methods of compensation are not always necessary to improve employee satisfaction and well-being. Employees who feel appreciated and recognized for their hard work are more likely to remain engaged and motivated. Organizations can implement various recognition initiatives, including monthly or quarterly awards based on training/certification completions. These initiatives not only demonstrate appreciation for employees’ efforts but also serve as motivators to upskill employees. Consequently, employees feel more connected to the organization and are more likely to remain committed and loyal over the long term.