Upskilling vs Hiring: Which choice is better for your business?
Skills are the new assets in the post-pandemic business landscape. Given the surge in technological adoption and remote work settings in 2020, companies included 33% more skills for their job invitations than they did three years ago. Similarly, in a recent report by Manpower Group, it was observed that over half of the global companies are struggling to attract skilled workers in domains like operations, logistics, sales, and marketing.
Even more surprising is the report by McKinsey which says that over 87% of companies are expected to face skills gaps in the next five years!
How to address the growing need for developing a skilled talent pool then? Companies today are either following the traditional hiring route or adopting newer upskilling drives to fulfil their industry demand. Not to mention, both these processes come with their specific benefits. However, to decide which is the ideal option for your next business scenario, it is best to take a closer look at what each of them offers.
So, without further ado, let’s identify potential business dilemmas and how you can resolve them with the right option!
1. When your company is expanding into a new market
One of the major growth parameters for a company is the scale at which it expands in different markets. From opening a campus in a new location to launching a new range of products/services, this expansion stratagem can differ from company to company. However, what remains constant are the people who bring a fresh perspective and required market expertise to the table.
In this scenario, you must hire people that are equipped with industry-first skills and understand the evolving trends in the job market; especially if you don’t have experienced talent or diverse teams to allocate to the new project. These new hires will not only help you identify growth points in the emerging market but also allow you to expand your internal talent pool more easily.
To further maintain and improve the efficiency of your new venture, you can also integrate upskilling initiatives into your operations. This will make it easy for the next bunch of hires to settle in the new market and learn from the teams that are already trained in their niche. Moreover, it will also aid in keeping the employees motivated as they collaborate and learn with each other.
2. When your company is introducing a new function
The emerging technologies and changing consumer preferences constantly demand companies to upgrade themselves. Take for instance social media. Right after Facebook and Twitter introduced ads in the early 2000s and more customers came online, companies across the globe added social media marketing into their operations. This led to an increase in the demand for candidates who were well-versed with social media algorithms and practices.
Similarly, today, if your offline store wants to start its Direct-to-Customer (D2C) services or your learning platform wants to provide personalized recommendations to your users, you need new people that are trained in digital marketing and data analytics respectively. Depending on the need of the new function, you must hire people that are skilled in the respective role and hire them fast. But how to choose a skilled employee among the several that apply? By integrating AI-based hiring tools into your recruitment plan. These tools will easily match the resumes of candidates to the job responsibilities and shortlist ideal candidates for you, thereby saving time and human errors in the process. They will further help you minimize the chances of employee attrition months and years down the line.
3. When your employee is resigning
As a company, your first reaction to any employee exit would be to hire a new employee immediately. However, according to reports, it takes nearly 200% of executive-level salary and 60 days to hire new talent. This further differs from domain to domain. For instance, engineering takes a minimum of 49 days to hire a new employee, research needs 48 days, finance takes 46 days, and marketing agencies typically take 40 days to do so.
To avoid such gaps and effectively maintain the workflow in the organization, you must focus on upskilling your talent pool. Whether it is encouraging employees to work in a rotational pattern or providing similar skilling courses, you can design effective learning modules and support your existing talent to develop new skills. Furthermore, according to the Talent Trends survey, 45% of companies observed retention, 43% of them witnessed higher workforce productivity, and 35% of them experienced a reduced skill gap by following this approach.
4. When your manager is being promoted laterally or vertically
The promotion season has arrived and one or more managers in the pool have decided to make their move — either to a new team or to a new position. And, what are the odds? There is no better person to take on the responsibility. In this scenario, searching for a new hire can be a daunting job. Unlike other openings, these roles demand organizations to hire people whose values and goals align with that of the company.
Moreover, in a study by Gallup, it was found that HR teams fail to find the right management talent 82% of the time. Consequently, hiring new employees can result in bad leaders who neither share the same dedication nor the farsightedness that maybe required of them.
This is where you should take the upskilling route. Focus on building a robust talent pool that can take fill in for the new responsibilities whenever necessary. For instance, you can begin by aligning your L&D resources towards training your employees for leadership positions. It can include encouraging regular collaborations between top management and employees and introducing soft-skill courses that help juniors to develop their team-management skills among others.
To conclude, both hiring and upskilling are essential in developing a strong employee base for your company. Although one may provide better benefits over the other in a certain scenario, it does not make the other ineffective. As a company in a competitive landscape, it is advisable to make a choice after evaluating your present resources and future talent goals that you may want to meet in the coming years.
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