In the long siege known as the war for talent, employers need a new battle plan. Instead of trying desperately to recruit from the outside to fill a growing skills gap, companies should turn to the resources that exist within their own workforces.
This is a build versus buy strategy, with greater emphasis placed on training to develop skills in-house to meet the organization’s current and future needs. As a recent Harvard Business Review article observed, rather than spending billions to acquire talent, a better approach is investing in the talent that’s already in place. “Poach-and-release is no longer a sustainable model for talent acquisition,” the authors write.
There is a greater-than-ever need for effective and efficient corporate training as the shortage of skilled workers heightens to an urgent business issue. At an education conference I attended recently, Senator Pat Toomey (R-Pa.) told the audience that the concern he hears most frequently from employers is the difficulty of hiring enough workers.
Across the U.S., the consensus among employers is that hiring remains a significant challenge. The numbers bear this out in a tight labor market as the strong pace of hiring continues. According to the most recent Bureau of Labor Statistics report, job openings stood at 6.8 million in late 2019, while total separations (people who recently left jobs) amounted to 5.6 million—a gap of 1.2 million. And there is no guarantee, of course, that the people seeking jobs will be qualified for positions in industries that are desperately seeking talent.
The problem is not new. The phrase “war for talent” was first coined in 1997 by Steven Hankin of McKinsey. In their 2001 book The War for Talent, authors Ed Michaels, Helen Handfield-Jones, and Beth Axelrod, all also of McKinsey, predicted that the make-or-break for firms in the next two decades would be the ability to attract, develop, and retain talent.
That future is now. Employers in manufacturing, healthcare, technology, and other sectors face significant skills shortages that can’t be solved simply by hiring more people.
Training Can Win the War on Talent
Training truly is the secret weapon. I hold this view strongly not only because of my two decades in education and training, but also because I am a serial entrepreneur who faces the same talent struggles as every other employer. Among the 170 people in our learning company, almost two-thirds are in research and development, which is a rare talent set.
In every industry and sector, among companies large and small, a new conversation must occur as upskilling and reskilling become the new norm. This includes skills-based training for recent college graduates who are not fully ready for the workplace, as well as to equip existing workers with new capabilities, particularly as artificial intelligence (AI) and robotics make deeper inroads and change the way work is done.
The role of employers in providing education is changing. The more traditional approach was expressed in the comments of a chief learning officer of a major financial institution, who in a recent panel discussion stated that his firm provides access to online platforms such as Pluralsight and LinkedIn Learning; however, it is still up to the employee to invest the time. This approach must change and in two important ways. First, companies in the future will need to take responsibility and invest more proactively, not only by providing access to libraries, but also to invest in the time it takes for employees to learn. Second, they will need to invest much more aggressively in creating learning curricula targeted to the companies’ specific needs. There will be a significant competitive edge to be gained in building expertise and developing talent.
The “Hedgehog Concept” and Skills Training
Business leaders who are courageous enough to take on worker training, making it more effective and efficient, stand to distinguish themselves. Those who are the best at providing these learning resources to employees will be the most likely to grow their companies and take market share. So where to start?
Enter the hedgehog. In Good to Great, Jim Collins put forth the “Hedgehog Concept” that encourages business leaders to identify three areas: what they are deeply passionate about, what drives their economic engine, and what they can be best in the world at. At the intersection of these three areas (which Collins illustrates with three intersecting circles) is an understanding of how a company can become great. That intersection is also the epicenter for corporate training—pinpointing the most crucial knowledge, skills, capabilities, and competencies for driving a company’s success,
Delivering training to fulfill this potential requires a partnership between employers and education companies with proven capabilities. No wonder then that Futurist Thomas Frey has predicted that, by 2030, “the world’s largest Internet company will be in the education business, and it will be a company we have not heard of yet.”
The Bad News: Effective Training Is Very Difficult
Now for the sobering reality: Despite size and scope of the $366 billion global training industry, results have been largely disappointing. As the report, The Great Training Robbery, stated: “Put simply, companies are not getting the return they expect on their investment in training and education.”
A big drawback in corporate education has been that it typically lacks precision. As a result, within the same classroom or traditional e-learning environment, some learners are bored because they have already mastered what’s being taught, while another group is lost and aren’t being given the resources they need.
Corporate learning must be much more targeted to meet the needs of each learner; this means taking into account what each person already knows and has mastered, and what is not yet known or is misunderstood. Learning must also address soft skills like communication, collaboration, creativity, and critical thinking (often referred to as 21st century skills) as well as “learning how to learn.” Importantly, learning must address “unconscious incompetence,” when people believe they know something but do not, which increases the odds of potentially costly and even dangerous errors. Moreover, learning must be scalable across a broad population. These are no small feats.
Embracing the Challenge
Just because something is difficult does not mean it should be avoided. By embracing the reality that delivering effective and efficient training is extremely challenging, companies can seek what really works to build knowledge and skills. Those that do stand the best chance of winning the war for talent.