24 - 25 September, 2019
Novotel, Amsterdam City Centre
+44 (0) 207 368 9465
Upskilling or Hiring? What’s The Best Strategy to Sustain Your Digital Transformation?
The worlds of work and business are rapidly changing which is driven by technological advancement, evolving business models and new customer and employee expectations. To remain competitive, organisations need to balance profitable commercial trading with the development of a culture of innovation and reinvention. Therefore, having the right skills, in the right place, available at the right time, during a period of digital transformation is a top business concern especially when it comes to procurement for HR.
In PwC’s 2018 CEO survey, 80% of respondents said this was their biggest challenge. While most executive surveys continue to show concerns over future talent pipelines and leadership capabilities.
Digital transformation for the business itself is hard to define. It isn’t a matter of learning how to use technology, or automating processes - it's about creating a mindset of agile, analytical, creative and experimental thinking. This will require knowledge and a new set of skills and perspectives that may not already be present in the business itself. These new skills may be hard to learn, but being open-minded will be vital for any future HR procurement strategy.
Employees want to learn
We know that our employees want to learn. Research regularly shows that the opportunity to learn new skills and grow and develop is the number one reason why they join a business in the first place, and it's also the main reason why they stay in their roles.
I recently conducted specific research with Kelly services on workplace trends amongst 14,000 European jobseekers and 91% of respondents said the approach to training and development was the main factor in deciding where to work. 70% of respondents also said that prioritising learning new skills over salary increases and promotion opportunities was their number one expectation from a new employer.
Attitudes to learning are also changing and most employees want to learn while they are working. So, they expect a learning culture that allows them an opportunity to develop the necessary skills they need, via access to knowledge and information in real-time. In other words, during working hours as problems arise.
I've also worked on research with Bridge that found only 1 in 6 employees favouring classroom-style learning. Instead, they prefer to take charge over how and when they learn, which gives rise to the need for regularly updated learning content. Josh Bersin, a leading industry analyst, refers to this as ‘learning in the flow of work.’ This is where upskilling and training your workforce could be to your advantage when it comes to implementing new technology.
A new approach to Talent Management?
Is a new approach to learning going to be enough to support the modern business through turbulent change? Talent shortages are growing, leaving procurement HR professionals and business leaders worried about the availability of much-needed skills.
Historically, approaches to talent management have primarily been concerned with performance management and identifying high potential employees, as well as looking at career advancement through the lens of a hierarchical organisational structure. Transforming these into something that supports a learning culture, which will help fill skill and knowledge gaps, should be at the top of any HR procurement planning agenda, but this will take time.
So what are the alternatives to up-skilling the workforce in the short-term? Many organisations are looking internally at their existing workforce to see if people can be transitioned to other parts of the business.
Research tells us that employees who have the opportunity to transfer internally are more engaged and committed to the organisation, and are likely to stay longer. The business can take a fresh look at job design; breaking roles down into tasks and re-allocating to employees whose skills are a closer match.
The growing use of automation in some roles and processes can also help. This is one way in which HR procurement can point the way by taking the lead in creating new roles and re-allocating the skills base.
The role of recruitment
One reason why companies prefer to support internal transfers is that external hires can take up to three times as long as internal transfers to be productive in a new role. However, businesses that are facing threats and trying to embrace opportunities from digital transformation may find that an internal transfer doesn’t provide the fresh perspectives, insights and experiences they need. This is when the answer may be to hire externally.
As well as new hires taking longer to be productive, this type of recruitment can be costly. If it will be a role that is new to the business, the job specification might be vague, so an agency fee might also be incurred.
Time to hire is likely to be longer if positions are vacant, as hiring managers may need to add extra stages to the hiring process to make sure they get it right. Inevitably, there is the settling in period to consider once a new employee is hired before they can become productive. Of course, there is never a guarantee that an external hire will be successful, so this may incur a further cost of replacement.
Around 1 in 4 new hires will leave a job within the first few months, for a number of reasons. Either, because the role wasn't as expected from the hiring process, (often the cause of this is being oversold by a zealous hiring manager), they didn't feel they fitted in with the culture or organisation, or they struggled to get on with their new colleagues or manager.
None of these potential problems is likely to happen with an internal transfer, which is why businesses and HR procurement managers will often look to appoint from within first before they consider hiring externally.
Benefits of using contingent labour
There is a third option, which many businesses now prefer, and that is to use contingent labour. We now see an increasing number of people working on non-permanent arrangements, be they temps, interims, freelancers, contractors or consultants. Many have chosen to work this way to broaden their skills and knowledge, experiencing different sectors, systems, technologies and structures.
Some of these employees also prefer the flexibility that comes with not being tied to a single employer and most of them are project-oriented and willing to see transformation assignments through to completion. They don’t always come cheap though, as many know their skills are in high demand, so they can hold out for the highest rates.
Using contingent workers can help shift cultural dynamics. When hiring primarily for skills to complete a specific project, the culture fit isn’t always essential, so this can be one way to broaden the thinking and outlook within a division or business unit. Different personalities, with varied backgrounds and experiences, can help to build a more creative and innovative environment.
So, should you up-skill the talent you have, or hire in new talent on either a permanent or contingent basis when dealing with digital transformation?
The current thinking can be summed up in three ways:
- Creating a culture of learning that supports employees’ growth and development can help improve retention and engagement at a time when businesses are concerned about stability and the future talent pipeline
- Hiring in new permanent employees can improve the knowledge, skills and capability base of the organisation immediately. As well as, the future talent pipeline, providing you have the culture and employee experience that encourages them to stay
- Using contingent help can also help businesses meet short-term instabilities within trading conditions and enable transformation projects to be rolled out quickly and effectively, though it may not help the future talent pipeline
All three options are costly. Which would you spend your budget on? These questions will be at the top of the list for any HR procurement savings plan this year.
ProcureCon HR is a fantastic HR procurement conference event in 2019 that you won’t want to miss out on. Don’t forget to download the agenda to find out what our speakers from Talent Insight will be discussing at Total Talent this year.
Written by Mervyn Dinnen, a speaker at ProcureCon HR 2019.