In adopting a culture of education, employers should follow their bottom-line
According to the 2021 “Workplace Learning Report” published by LinkedIn Learning, the trend of companies embracing learning and development (“L&D”) is becoming more widespread . Two-thirds of global L&D professionals questioned noted their activities are focused on rebuilding their organization’s learning culture.
Within these reformative efforts, the top priority for 59% of L&D professionals is upskilling and reskilling initiatives, a 15% increase from June 2020.
Reconsidering workplace learning
A useful barometer for the status quo around mid-career education is employees, as they frequently experience economic transformation most tangibly. While companies may still be evaluating the benefits of workplace learning, a recent study from American pollster Gallup showed 57% of US workers indicated their willingness to participate in upskilling programs.
These statistics clearly show the emergence of a global trend to reconsider workplace learning and adopt a culture of education, with more developed markets leading the way.
In the United States, large corporates are reinventing their employee learning culture. In September, Amazon announced it would pay college tuition for its 750,000 frontline workers. The offer reimburses part of their education costs, covers both full and part-time employees, and is a $1.2 billion investment by Amazon over four years. Other leading retailers, including Target, Home Depot and Walmart, have launched similar initiatives.
Bridging the global skills gap
These initiatives respond to a visible and growing skills gap globally, partially explained as a side-effect of two decades of rapid digitization. However, there is also a failure of the traditional higher education system to equip enough workers with skills relevant to 21st century jobs.
The education sector’s shortfalls are clear if one considers it should be in the sector’s interest to bridge gaps between employers and learners. Employers seeking qualified talent, and applicants wanting to become qualified – create the right foundation for much closer collaboration between the two.
There are various reasons why such close collaboration is not yet globally mainstream. Many traditional universities do not consider their primary role to be preparing learners for their careers. Deep-rooted tradition and even bureaucracy prevalent at many universities is another reason, plus many faculties do not have the industry experience needed to teach practical skills. Therefore, they are almost disincentivized to attempt to focus on teaching them.
The employment value chain also is populated by too many intermediaries, including universities, MOOCs, training companies, recruitment agencies, career coaches, recruitment platforms, line managers, and finally HR managers. Perhaps the number of players adds to the complexity of ultimately building the seamless relationship necessary to translate the real requirements of line managers into the skills future applicants need.
To bridge the gap between employers’ demand for skills and worker supply, educators should strive for seamless collaboration with organizations to unite employee and employer educational needs. This may require more direct collaboration between line managers and educators rather than relying on HR as an intermediary.
The cost of education
Doing this well can come at a cost. Companies such as Amazon or Walmart have the necessary budgets to build their own educational institutions from scratch, or invest in expensive college tuition at traditional education institutions.
For many, investing in workplace education can feel like a large expense, but not doing so could actually be worse for company’s bottom lines. A crucial factor is high employee turnover. A PagerDuty poll found 39% of organizations are experiencing increases in tech talent turnover, leaving companies without a return from their investment and having to hire new talent with the right skills, or reskill talent internally. And so, the cycle continues.
Whilst many small businesses or companies in emerging markets are beginning to realize the value of adopting a culture of education for retaining talent, and the bottom line, many will be reluctant or unable to commit to bigger expenses.
The good news is there is no need to start your own corporate university or fund costly courses at pricey universities. Online education providers have largely eliminated the need to invest in expensive in-house capacities and instead provided employers with the option to choose from a rapidly growing market of virtual learning solutions offering tailored education, reskilling and upskilling solutions for employees, in line with their own needs as a business.
According to statistics collected by Nexford University, companies deliberately addressing skills gaps and shortages will experience a direct and positive impact on their bottom lines. Nexford’s data indicates companies investing in training record higher profit margins of up to 24%.
Moreover, 76% of employees prioritize organizations with skills training offered as part of the job benefits, compared to companies without such offerings. With employee retention an urgent concern for many businesses, investing in training and development can address this problem – with 70% of employees agreeing L&D activities influence their decision to stay at their employer.
Finally, productivity growth produced by upskilled workers results in an average 218% increase in income per employee, compared to workers at companies lacking upskilling programs.
Emerging market opportunity
These figures become even more relevant when considering the employment landscape in emerging markets, who are not immune to the growing global skills shortage and yet have more at risk.
Both employers and employees in these markets have a lot to gain from upskilling opportunities – as demonstrated by Nexford’s latest employer survey in Egypt, which showed 78 percent of companies, including PWC, Pfizer and the National Bank of Egypt, have difficulties to find talent with the right set of skills in areas like digital transformation, digital marketing, and business analytics.
By shifting higher education and degrees to skills-driven curriculums, and developing partnerships with leading employers to support this shift, emerging market countries can begin to promote a culture of education that tackles the skills shortage, promotes employment opportunities and contributes to economic development. Nexford’s partnership with Sterling Bank in Nigeria, for example, is an excellent example of collaboration of how education institutions are helping to bridge gaps between employers and higher education.
As there is no one-size-fits-all solution with regards to upskilling employees, any compromise must be versatile enough to conform with employers’ commercial and business goals. However, a company’s ability to succeed in the market will eventually depend on having the right team with the right skills.
Educators offering solutions complementing bottom-line requirements will be the leaders in creating a new culture of education among employers.
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