Are You A Knowledge Machine?
Hiring new talents and new expertise was traditionally seen as the most proper way to cope with changing needs for knowledge within larger organisations. Today’s leading companies understand that, in this rapidly changing world, upskilling is more suited and less expensive.Authors: Anne-Marie Zeghers, Jens Desmet & Sonja Noben
Where are we today?
According to a separate report from the McKinsey Institute, 62% of executives believe they will need to re-hire or re-train their employees because of new technology in the digital age. It seems logical that, if the world around you changes, you need to adapt. You will need knowledge, skills and competences that you did not have before. To cope, several companies have invested heavily in training opportunities.
Take for example AT&T. They devoted 250 million dollars to employee education and professional development. Some of the benefits they are reaping: a reduced the product development life cycle by 40%, an accelerated time to revenue by 32%, and a cut in developing and rollout time by half. They know that upskilling is the right answer.
Upskill above hiring
Studies show that the cost of replacing someone amounts to the equivalent of 9 months of salary. Replacing a highly trained employee would even cost around 200% of their annual salary. Distinct elements amount to this massive cost:
- The hiring process has certain costs and fees attached to it.
- The new employee needs time to adapt to the organisation leading to a temporary loss of production and an adaptation cost.
- Aspects of the new job will require specific training.
- The impact recent hires have on existing teams or employees.
- The management attention every new employee asks.
Return on Knowledge Investment
That is why Amazon invest 700 million dollars in its Upskilling 2025 Program. They are reporting great strides forward in the war for talent:
- Employee retention: experienced and productive staff will feel more motivated to stay if the company invests in their skills.
- Attract extra staff: outstanding salaries and inspiring colleagues will convince people to take on a new professional challenge, but many people also look at the upskilling possibilities their new employer would offer them.
In a recent Gallup report, 87% of millennials prioritised professional or career growth and development opportunities in a job, while 69% of non-millennials said the same. Amazon and other knowledge machines understand these metrics and act upon them.
Becoming a knowledge machine
Turning into a learning powerhouse is no easy feat. As for every transformation, it requires adapting the new approach to the DNA of your company. One should also be mindful of the following aspects for success:
- Take on a long-term perspective. You may know your current competition and customer needs, but what will the future bring? How does this impact your need for skills and competencies?
- Look at each employee and their personal needs. People have different learning preferences.
- Adapt the training offer to what works well in your business. Experiment and assess for improvement.
- Motivate your employees to upskill themselves. Promote recurrent training objectives, rewarding those who invest in themselves.
- When you do hire, look for the capacity to learn.
Foresee the appropriate time
Mature organisations, like Spotify or ING, have a deep focus on developing skills and competencies. 10% of everyone’s time is used to focus solely on upskilling. They create skills matrices and personal development plans that act as win-win instruments. Such a considerable amount of time may seem a lot, but it allows for adapting to fast-changing and unforeseeable customer needs.
Skills are precious to any company. Upskilling presents an excellent opportunity for your organisation to motivate and retain employees. Upskilling costs less than hiring, making investing substantially sensible. Still, like any transformation, upskilling is difficult. That is why, if you want to start this learning journey in your company, DigitalScaler is there to help you. Our hands-on experience in upskilling entire workforces can guide you across the different hurdles along the journey.