Start Reskilling your Workforce Now - McKinsey
To meet the post-COVIDE19 challenge, companies should craft a talent strategy that develops employees’ critical digital and cognitive capabilities, their social and emotional skills, and their adaptability and resilience. Now is the time for companies to double down on their learning budgets and commit to reskilling. Developing this muscle will also strengthen companies for future disruptions.
The crisis has accelerated the levels of digitization to help reduce avoidable physical interactions. This has meant finding ways to reinvent work and, in some cases, a partial disruption of jobs and changes in the way workers perform them.
To make sure that organizations thrive after the crisis, leaders and their teams can take six steps to build workforce skills now. The first three will help define your strategy and the last three will help you execute it.
1. Rapidly identify the skills your recovery business model depends on
As companies decide on strategies that will shore up the future of the business, they need to map out which skill pools will disproportionately affect it and drive it forward. To do this, they should quickly identify crucial value drivers and employee groups.
Specify the exact contributions of these roles to value creation and reimagine how their day-to-day work will change as a result of value shifts. Identify which shifts in activities, behavior, and skills are needed. Specify the quantity and type of people you need. For example, if you are moving from in-store sales to predominately home deliveries, your tech team and logistics coordinators will have a greater impact on the new strategy than they did on the old one. They may also need a different skill set to facilitate the increase in demand and customer expectations.
2. Build employee skills critical to your new business model
Start upskilling the critical workforce pools that will drive a disproportionate amount of value in your adjusted business model. The first step is to build a no-regrets skill set—a tool kit that will be useful no matter how an employee’s specific role may evolve. Focus your investments on four kinds of skills: digital, higher cognitive, social and emotional, and adaptability and resilience. The skill building in these four areas should be predominately digital and self-paced but not tailored to the individual in most cases.
3. Launch tailored learning journeys to close critical skill gaps
As companies prepare to reimagine and ramp up their business models, it is important to go deeper on strategic workforce planning. Leaders need a detailed view not only of the core activities that critical groups will begin undertaking in the next 12 to 18 months but also of which skills each of these groups will need.
For instance, a Chinese conglomerate shifted to strategic planning after managing the immediate effects of the pandemic. It looked at ordering remotely for the next season, began to work on revised three-year plans that included significantly more aggressive omnichannel targets, and transformed its supply chain to be more agile, along with other moves to expand the business. Taking into account the skill gaps these initiatives created, the conglomerate tailored its reskilling journeys and delivery plans to help employees in critical roles build the skills needed to meet their specific objectives.
And when an international bank realized that its regular face-to-face sales model faced disruption, it concluded that virtual selling could become a competitive advantage if done well. The bank then began a tailored upskilling journey for its sales reps to deepen their core sales skills while improving their virtual ways of working.
As the operating model evolves quickly to accommodate a rapidly changing environment, the key is to iterate strategic workforce planning to determine the right skills to develop in a “just in time” manner. These learning journeys are tailored to each specific role, but companies can increase their scale and cost effectiveness by delivering the majority of the training digitally.
Such journeys can be supplemented by digital tools that re-create the best of in-person learning—for instance, social-sharing tools and live video sessions that create a deepened sense of cohesion in cohorts and help build skills, such as empathy, that usually depend on in-person learning.
4. Start now, test rapidly, and iterate
In a survey, we found that most companies that had launched successful reskilling programs said they were better able to address skill gaps caused by technological disruptions or to implement new business models or strategies. And companies that viewed their reskilling programs as unsuccessful were still glad they had gone through the process, with a majority saying they were prepared to take on future skill gaps. The lesson here is that simply getting started on reskilling programs makes organizations better prepared for potential future role disruption—and is preferable to waiting.
Organizations shouldn’t launch reskilling initiatives and then disband them after the crisis passes; whatever talent reskilling or redeployment you do now should also be used to expand your reskilling capabilities going forward. By building your own institutional learning, and capturing what works and what doesn’t now, you put yourself in a position to apply those lessons during disruptive events in the future.
5. Act like a small company to have a big impact
The reskilling programs at small organizations (fewer than 1,000 employees) are often more successful than those at large ones, the global survey showed. This may surprise some, since larger companies generally have access to more resources.
But smaller companies are often more successful a following agile principles —making bold moves more quickly because they don’t have to shift around large groups of people to try something new. They also may be more willing to fail, because they have fewer layers of approval to go through.
At the same time, smaller companies tend to have a clearer view of their skill deficiencies, so they’re better at prioritizing the gaps they need to address and at selecting the right candidates for reskilling. That’s not to say larger organizations can’t be agile when it comes to reskilling, just that it can be harder for them.
6. Protect learning budgets (or regret it later)
Companies should not cut their employee-training budgets. According to the Training Industry Report, US data during and after the Great Recession showed a significant drop in overall training expenditures in 2009 and 2010, followed by a surge in 2011 and a drop back to 2008 levels in 2012. What this tells us is that if companies cut their learning budgets now, they’re only delaying their investment, not netting a saving—especially since the current crisis will require a larger skill shift than the 2008 financial crisis did.
Use your training budget to make skill building a key strategic lever for adapting to the next normal. Don’t waste two to three years and forego the efficiency and resilience you could develop now. What you can and should do is focus on the resilience of your learning ecosystem: make it both more digital (including in-sync digital components to replace in-person ones) and more accessible to your employees. Finally, leverage the ready-made learning journeys and objects of external partners.
Companies can’t be resilient if their workforces aren’t. Building your reskilling muscle now is the first step to ensuring that your organization’s recovery business model is a success.
To read the full article from Mc Kinsey, please click here.