As businesses grapple with a tight labor market and an ongoing war for skilled tech-savvy talent, three goals reign supreme: They must recruit new talent, and they must retain and develop their incumbent workers.
A company’s success hinges largely on its ability to bring in and meaningfully engage new workers and ensure that their skills continue to develop. Year after year, these three priorities rank high on the minds of business and talent leaders. At a time when almost every business relies on tech talent and industries from manufacturing to tech are navigating labor shortages, they are more important than ever.
The problem for too many companies is that many business leaders still think of these three priorities as distinct challenges disconnected from their overall workforce advancement strategy. As a result, businesses have to monitor several different programs at once, with different partners, strategies, and teams assigned to supporting separate aspects of this work. The result is often limited progress despite significant investment.
Fortunately, a growing number of companies are recognizing that investments in people are continuous, connected commitments. These priorities do not need to be siloed. Instead, they should support one another.
As successful businesses realize the critical and surging demand for technical talent, they are uniting efforts for recruiting, retaining, and sustaining employee advancement into a common pathway. In doing so, they are discovering they can create continuous learning pathways, help employees advance in their careers and address key skill shortages while simultaneously addressing business needs.
Offering education and training gets new recruits in the door by promising them immediate opportunities for advancement. Companies like Aon and Accenture are embracing the potential of apprenticeships, which offer new hires both training and paid employment with the promise of a career pathway if they continue to develop their skills. When these programs work well, they have tremendous benefits for employees and companies alike. For employees, timely and relevant skills development, and mentoring relationships that often endure. For businesses, it reduces the overall risks of talent acquisition and development.
Investing in employee development is also a proven retention tool. It’s a clear signal that a company values its workers. It also confirms for employees that they’ll be able to advance into new company roles with increased responsibilities. A robust workforce development program centered on in-demand skills also ensures that a company has the right talent available at the right time to remain competitive.
This is critical given that recruiting is so often more expensive than training. It costs a company on average about $4,700 to hire each new employee, while executive hires can cost several multiples more. Estimates of the total cost of turnover — hiring, onboarding, ramp-up time, and lost productivity in the interim — are upwards of twice a departing employee’s salary. Training costs, meanwhile, tend to be significantly lower. Companies spend an average of nearly $1,700 per employee to provide more than 60 hours of annual training.
Poaching talent from competitors is even more costly. As the US economy continues to navigate a shortage of skilled workers, especially in tech, the talent war between companies has driven up the cost of talent without increasing the supply. But as a body of research has confirmed, trying to lure employees away from competitors takes more time and money than investing in your incumbent workforce. Once again, education and training are helping companies solve this challenge. That’s why companies like Chipotle are making headlines for their goal of being the “fastest path to the middle class.” They’re recognizing the fact that their next generation of managers and leaders might already be working for them.
Recruitment, Retention, Development Challenges
The companies best positioned to navigate tomorrow’s world of work will be those that recognize they can solve recruitment, retention, and development challenges simultaneously. The good news is that a growing number of Fortune 500 firms are building partnerships that can fulfill the promise of the three-in-one approach. Emerging providers such as SkillStorm (where I serve as an advisor) are a supplier of preference for all three approaches, with models that span candidate identification and content development and align workforce capability with business needs and long-term learning. These continuous learning partners allow a business to have immediate access to market-relevant talent options while also offering employees a known pathway to professional growth.
Providers that can effectively bundle all three approaches can help companies recruit promising talent from multiple, diverse sources and conduct specialized ongoing training to help workers advance into skilled tech roles. What’s more, uniting recruitment, retention, and development activities can enable talent leaders to better focus on cultural and subject matter learning that is unique to their company, their industry, and their customers.
In an increasingly tech-driven economy, the need for skilled talent will only continue to intensify. If business leaders boldly and holistically address their technology talent demands, they can meet the needs of today and build a stronger and more resilient workforce ready for the challenges of tomorrow.
Suzette Kent served as Federal Chief Information Officer of the United States from 2018 to 2020.