The global workforce has been evolving at a rapid pace for the past few years, but that pales in comparison to recent months. The world — and workforce — as we know it will never be the same again. The pandemic and consequential global shutdown, and mass remote-work shift, has sped up digital transformation by years and placed more emphasis on the knowledge-based economy.
This has made hiring and cultivating the right knowledge and skills into your workforce more critical than ever before. In fact, research suggests that a significant percentage of market capitalization in public companies is based on intangible assets such as employee skills.
Learning is Imperative
The value of having the right skills at the right time is being realized during our current crisis. Organizations must respond quickly and pivot to market demand. Yet, given the growing uncertainty about the economic climate and possible recession, many organizations are reassessing their budgets across the board. History has often seen learning and development as one of the first budgets targeted. These cuts come at the worst possible time, with learning and talent leaders exceptionally well-placed to support employees during this challenging period.
It falls to the chief learning officer and other senior learning leaders to convince their C-suite peers that now is the time to maintain, if not increase, learning budgets, ensuring the workforce has the skills, knowledge and agility needed to survive and thrive in the coming years.
Shifting the Focus to the Long-Term
It’s a big ask because many C-suite leaders are stuck in survival mode, making short-term decisions to ensure business continuity. CLOs must take them out of this to show them the mid- and long-term impacts of their choices. Indeed, the C-suite is being advised to shift their thinking toward long-term continuity and, to make the case for their learning budget, CLOs must align with this mindset. By mapping each stage of their learning investment to the business’ short, medium and long-term strategy.
Align With Business Goals
This makes stronger the case for maintaining (or even growing) your learning budget. As Chris Holmes, director of global learning and development at Booz Allen Hamilton explains, “If learning is integrated as a part of a shared outcome, then the need to ‘advocate’ for training investment can be a very different conversation.”
That said, only 40 percent of learning strategies are currently aligned with their organization’s wider goals. There is definitely room for improvement, and learning must quickly get in-sync with the business’ priorities. Survival depends on it.
Create tangible links between your learning outcomes and the business’ goals, as this will make budget cuts more difficult to justify. Generally speaking, learning drives value in four main areas: business growth, efficiency, reducing risk and building foundational skills. This provides a solid framework to assess investment in each area depending on your business goals.
For example, your organizations may have to invest in a new employee safety program to upskill employees in social distancing and public health measures. The resources for this may come from cutting back in another area, like a new product launch (and associated sales training).
Making the Most of Every Employee
A further use case for your L&D program comes due to hiring freezes. One third of firms have stopped hiring because of the crisis. To achieve the same output and meet upticks in demand, organizations are going to have to make the most of their existing talent. That means keeping every employee’s skills up-to-date and relevant to market needs.
Preparing for Digital Transformation
Another long-term trend that’s already been touched on is digital transformation. It has advanced two years in the past two months. Whereas before, 54 percent of the workforce globally needed significant upskilling by 2023, this number will likely have grown because of the acceleration. If your organization slips in its upskilling investment now, your workforce will lack the digital skills needed to take advantage of emerging technology. Your business growth and market position will be hindered for decades.
If this argument fails to sway your peers, then turn to financials. Increased learning investment correlates with increased revenue. Organizations that invest in their employees by creating an advanced learning and skills strategy, on average, generate income that’s 218 percent more per employee. Their profit margins are also 24 percent higher. With leaders currently laser-focused on their finances, the potential returns offered by your strategic upskilling initiatives will be hard to ignore.
Time to Assess Your Learning Strategy
Now is also an opportune time to assess your current learning strategy — whether it fits current business needs and workplace shifts. Make no mistake, there is no “business as usual” post-COVID. Your learning strategy (and therefore budget) will have to adapt.
Ongoing public health measures (and fears) mean that emphasis must be on programs that can be run virtually. Likewise, your learners’ needs and priorities will have changed due to the crisis. Degreed data has shown an increase in the number of “flexible skills” like leadership and communication being searched for, compared with more technical skills like Python and machine learning. Similarly, at Booz Allen Hamilton, employees are seeking out content that will help them lead and work in their new virtual environments.
It’s also worth divesting anything that isn’t delivering results, to give you more resources to allocate to content and technology that do. It also shows your C-suite peers that every dollar being invested in learning is being monitored and optimized.
Changing the Culture Around Learning
Ultimately, what you want to avoid is a culture where cost-cutting is the new normal and learning is seen as disposable. It’s not. It’s critical to the longevity of your organization and the strength of your workforce. Without it, you’ll be stuck in a downward spiral of lost productivity, increased attrition and an erosion of market share to competitors who are investing in their people.
In these times of uncertainty, learning is well-placed to take on a more visible role in driving the business forward and supporting all employees … where, during a downturn, learning is seen as a strategic lever for the business because everyone agrees that it’s essential to recovery.