June 13th, 2023 – SkillCycle
Recessions can have a devastating effect on organizations and their ability to invest in employee development. For example, from late 2007 to 2009, there was a sharp decline in economic activity that became known as the Great Recession. This economic crisis deeply impacted companies worldwide, with falling profits and pessimism about the future.
In this article:
”Due to the Great Recession, companies cut training and L&D and implemented a ‘do more with less’ culture,” says Rebecca Taylor, Co-founder and CCO of SkillCycle. These effects have lingered and have been exacerbated by subsequent economic and labor market challenges.
In the current economic climate, reflecting on this history can help organizations navigate current challenges more smoothly and stay poised for future growth. The effects of periods of economic struggle or recession on employees, particularly those just joining the workforce during these tough times, cannot be overstated.
Any economic downturn results in limited resources and a low commitment to talent development, eroding opportunities for both companies and employees to acquire critical skills.
For instance, during the Great Recession, employees faced significant skills gaps as training and learning opportunities took a backseat. “There was no time to learn, no one to teach, and no room to fail,” says Taylor.
Many people began their careers during or immediately after this recession, while “millions were losing their jobs, homes, and savings,” according to McKinsey.
As organizations began to recover, employees were often left to manage their careers on their own, with little support on the job. What’s worse, for many, ingrained fear of losing the jobs they have creates barriers to success.
“Employees navigate their careers with fear and uncertainty–and now a lot of them are responsible for managing other people,” says Taylor.
Without intervention, the effects of tough economic times can carry on through scaled-back programs and poorly resourced HR departments, causing negative impacts on employees, including:
A common thread among these impacts is a lack of learning and development initiatives that have created skills gaps in employees and organizations.
The lack of investment in employee development has resulted in skills gaps that need to be urgently addressed. Implementing robust learning and development programs is crucial to re-ignite the growth mindset among employees.
“Skills are currency, so if Millennials are less skilled, they have fewer opportunities to grow,” says Taylor. “This is a skills gap issue for Millennials and companies alike.”
It’s a complex challenge, with 58% of the workforce already needing new skills to be effective at work, according to Gartner. That’s a huge number of employees who will require upskilling simply to do the jobs they have now.
Yet, the goalposts keep moving. Skills sets for jobs have changed by approximately 25% since 2015. By 2027, this number could double, according to LinkedIn Learning.
A popular approach has been to hire new talent to add necessary skills, but when hiring slows due to economic downturns or labor market trends, companies face increasing gaps between the skills needed to drive growth and the current skill levels of their employees.
It’s vital to support your employees in bridging their skills gaps and nurturing their professional growth. By recognizing the emotional impact of skills gaps, investing in learning and development initiatives, and cultivating a learning culture, you empower employees to thrive and contribute to your organization in lasting ways.
Here are five benefits of bridging skills gaps in your company:
Upskilling employees empowers them to perform tasks more efficiently and effectively, resulting in improved productivity and overall performance. By providing the necessary skills, you can empower your workforce to deliver high-quality work and meet performance expectations.
Addressing skills gaps demonstrates a commitment to employee growth and development, increasing job satisfaction and engagement. Sixty-one percent of U.S. workers surveyed say upskilling opportunities are an important reason to stay in their jobs.
As the world of work continues to evolve, you will need employees who have the skills to embrace innovation and adapt to changing business environments. With a skilled workforce, you’ll be better positioned to readily respond to market trends, introduce new ideas, and drive continuous improvement.
Proactive succession planning includes the development of a pipeline of talent armed with the necessary skills and competencies for future leadership positions. By investing in learning and development, you can ensure a smooth transition when filling key roles, reducing disruptions, and maintaining business continuity.
Building capacity across the company paves the way for stronger organizational growth by unlocking the full potential of employees. Skilled employees make meaningful contributions to strategic initiatives, drive new innovation, and are ready to seize growth opportunities. As employees grow and develop, the company will expand its capabilities and increase the likelihood of long-term success.
Addressing skills gaps is essential to maintain productivity, foster innovation, improve employee retention, plan for succession, and position your organization for sustainable growth in a competitive landscape.
Your people are one of your most valuable assets and are capable of fueling growth and innovation to carry your company into the future. Without investment in their development, your organization’s growth could stall.
It’s well known that developing people helps give your business a competitive advantage. Nearly 80% of organizations report that building capability within their people is important to the long-term growth of their business, according to McKinsey.
How critical is it to make these investments in talent now? “Companies need to invest in developing the skills of their employees if they have any interest in surviving the next decade,” says Taylor.
By investing in employee development and creating a culture of continuous learning, you can build a skilled and adaptable workforce ready to drive long-term success.
Ready to address the skills gaps in your organization? Build your team and their skills with personalized learning journeys provided by one-on-one coaching.
SkillCycle formerly known as GoCoach featured in Forbes
Read Full Article
Find the 13 necessary soft skills in order to have employee success. Soft skills are often overlooked in comparison to hard skill but are equally...
Read Full Article
Today’s organizations face a complex challenge: How do keep the talent we have, and how do we get the skills needed to accomplish our goals?...
Read Full Article
