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Why Employee Upskilling is Essential Amidst Economic Uncertainty

published26 days ago
5 min read

As job openings remain at near-record highs in the U.S., it might appear that employees have every opportunity to advance their careers right now. But with a recession looming, hiring is predicted to level off and businesses may be forced to slash their workforce as a way to cut costs. However, there’s a lot of uncertainty around this, and some economists feel that a high ratio of job openings to applicants may actually cause companies to hold on to their current workforce rather than laying people off.

Against this volatile backdrop, many workers are looking for ways to boost their competitiveness in what could soon become an employer-driven job market. In fact, LinkedIn’s 2022 Global Talent Trends finds that opportunities for upskilling and career advancement are two of people’s top priorities right now, coming in only behind compensation, work-life balance, and flexibility.

This is good news for employers as well. If companies do have to lay off employees, they’ll need their remaining workforce to be driven to learn and grow. And many people are feeling this way, according to new research from my company, Workplace Intelligence, and Amazon. Our study found that 89% of employees are motivated to improve their skills this year and 83% say that this is one of their top priorities. An impressive 88% of workers are already putting a significant amount of time and effort towards skills-building.

Part of the reason for the renewed focus on skills building is because people feel wholly unprepared for what lies ahead in the world of work. We found that 78% of employees are concerned they lack the skills required to advance their career, and the pandemic is at least partly to blame. In fact, 58% of employees are afraid that their skills have gone stale since the onset of the pandemic, and 70% feel unprepared for the future of work. As a result, well over half of employees feel it will be difficult to advance their career (56%) or transition into another type of job or a different industry (57%).

A lack of employer support is partly to blame these widespread feelings of unpreparedness. And with workers still holding the power over their employers (at least for now), this could be bad news for some businesses. Research from McKinsey shows that “a primary driver of quitting is that employees do not have opportunities to learn new things or find their work interesting or challenging.” Their research also finds that turnover is significantly less likely when employees have internal mobility.

My company’s study with Amazon corroborates these findings: 2 out of 3 employees we surveyed say it’s likely they’ll quit within the next year because there aren’t enough opportunities for skills development or career advancement, or because there’s no way for them to transition to a different job or a new career path. Notably, Gen Z and Millennial employees were more likely to say they’ll jump ship, with 74% saying they’re likely to move on due to subpar support.

And let’s remember that it’s not just retention that’s at stake. Nearly 9 out of 10 employees said that if there were looking for a new job, it would be important for their potential employer to offer a strong skills development program (87%), an abundance of career advancement opportunities (88%), and ways for them to progress toward a different job or career track (87%). Similar research from Amazon and Gallup finds that 65% of workers believe employer-provided upskilling is very important when evaluating a potential new job.

For businesses, this presents a compelling opportunity to retain their current workforce and attract new talent by offering better learning & development programs and more career support. Here are 4 tips to help prioritize upskilling at your company and ensure that employees are on-board as well:

Tip #1: Expand your benefits to workers who need them the most

Although Amazon’s study found that 78% of employees have benefited from their company’s learning & development programs, many people don’t have access to the programs they want the most. For example, just over half of employees say their employer offers free or partially covered college tuition (51%) or training programs in other areas of the business (55%). However, more than 8 out of 10 employees say these benefits are important.

Other research from Gallup and Amazon reveals that upskilling opportunities are disproportionately offered to the highest-skilled workers. “The challenge to employers is to expand upskilling opportunities to those in the lowest income earning groups and with the lowest current skill levels,” their report states. “Such an expansion would allow for more upskilling opportunities for those workers who may derive the most benefit from upgrading their skills.”

Tip #2: Build time for learning into people’s schedules

While most workers are eager to grow their skillsets, it can be immensely difficult to prioritize learning over more critical job tasks. One study found that the #1 reason employees say they’ve stopped learning is because they don’t have the time. In fact, on average people are spending only 1% of their work time on professional development — about 5 minutes per day.

This is a far cry from what experts recommend, which is for employees to spend around 20% of their workweek on learning and experimentation. While this percentage is perhaps geared more toward knowledge workers, I think the 1% average is low no matter what type of role an employee is in. This points to a pressing need for leaders and managers to do a much better job of prioritizing time for learning for their people.

Tip #3: Align skills development with career progression

Smart companies know that skills development should support and enable employees’ career advancement. That’s why it’s critical that organizations clearly communicate about what competencies workers should focus on in order to progress, whether they’re looking for a raise/promotion or to move into a different part of the business. Offering this clarity is an important way to retain talent, since employees who see how their learning efforts translate into better opportunities will be more likely to stick around.

Taking a strategic approach around learning & development can also help your organization do a better job of addressing skills gaps. In fact, McKinsey reports that most leaders believe skill building is the best way to close skills gaps — more so than hiring, contracting, or redeploying employees. That’s likely why 69% of organizations are doing more skill building now than they did before the pandemic, and most say they’ll continue to increase their spending on learning & development in the years ahead.

Tip #4: Help your workers see the bigger picture

For employees, developing their skills can result in much more than just a promotion or a salary increase. Upskilling is one of the most effective ways to boost employees’ confidence at work, it can unlock greater purpose in people’s lives, and it can result in a better quality of life for workers. And in the wake of the pandemic — when many people took the time to reflect on what’s really meaningful to them — focusing on these other outcomes is crucially important.

For example, Amazon’s study found that people hope that advancing their career will lead to better work-life balance (48%) and a sense of purpose (41%), as well as more interesting work. Among employees with leadership ambitions, 47% are drawn to the idea that they could create a better work experience for the next generation and inspire others to follow their dreams. So as you encourage your staff to develop their skills and think long-term, help them reflect on what they might gain from doing so — beyond just a bigger paycheck.

A strong focus on upskilling could help future-proof your company

In today’s employee-driven job market, employees feel empowered to seek out an employer that truly supports their long-term career goals and ambitions. Companies who recognize this and provide a high level of support — from more time for skills development during the workday, to better learning benefits and programs — will stay one step ahead in the ongoing war for talent.

In addition, any improvements you make to your skills programs will help “future proof” your organization for the uncertain economic times that lie ahead. A recession is likely right around the corner, and a strong focus on skills development and internal mobility could help your business weather the storm. Because when you invest in your people and give them the ability to realize their potential, they’ll invest in you.

Thanks for reading — be sure to join the conversation on LinkedIn and let me know your thoughts on this topic!