For many organisations trying to reduce their skills gap, recruitment along is not working. The recruitment process is often uncertain and expensive, and yet investment in employee training to redress the skills shortage is falling. Isn’t it time for employers to re-evaluate developing their existing talent? Wojciech Walczak discusses how.
At the start of 2024, the ONS reported that there were 934,000 job vacancies in the UK, a figure that still remained above pre-Covid-19 levels. Compounding this need, Open University research says 62% of UK employers report a skills shortage, with a range of sectors affected, including health, banking, and technology, as well as manufacturing.
To explain the situation, researchers have sited factors such as a high number of experienced employees retiring post-Covid, as well as a reduction in net migration of skilled workers from the EU post Brexit.
Across the board, organisations are finding it hard to recruit candidates with the right skills
So why aren’t organisations able to replace the skills gap? The trend for most companies is to look externally, but across the board, organisations are finding it hard to recruit candidates with the right skills. According to a recent survey by Indeed, 65% of recruiters say a lack of quality candidates is a challenge.
The recruitment problem
Recruiting people with experience is difficult. The job-to-job move rate is continuing to decrease, with the amount of employed UK people switching jobs currently resting at just 2%, and a job change is less likely the older, and more experienced, people become. This also makes hiring experienced candidates expensive: there’s the cost of recruitment, as well as the higher salary to incentivise a move.
At the other end of the scale, it can be difficult to recruit young, newly qualified people. For example, there’s a greater demand than supply of recruits with STEM degrees. Furthermore, the pull of these recruits is mainly to London, or at least a handful of large cities – too bad if your organisation isn’t based there.
An indefinite wait for the right candidate also makes recruitment a less predictable way of filling the skills need, and with less certainty over when the roles will be filled. In the end, a delay can usher in a compromise in selection, either by recruiting a candidate who needs extensive development or by choosing someone who is ultimately unsuitable. And so, the recruitment process starts again. Even if the recruitment of new candidates is initially successful, it takes time and resources to get recruits on board.
Although focussing on recruitment might have been the right solution for many organisations in the past, there is no doubt that the effectiveness of this method of addressing skill gaps is decreasing. The data shows that many organisations continue to wait for their desired candidate with losses for the business meanwhile in missed opportunities.
But despite the evident shortcomings of this approach, many organisations are doubling down on recruitment. Government figures show that in 2017, 22% of vacancies were classed as skills shortage, and by 2022, this figure had grown to 36%. Yet over the same period, while the number of employees receiving training fell, so did the investment in employee training, reducing from £2,010 per employee per year to £1,780.
Upskilling existing staff
Instead, an emphasis on developing employees can achieve better outcomes for many organisations. A key reason is that often, the right candidates are already in place: investment can be directly applied to team members who are carefully chosen to maximise the chances of success. Properly selected, these employees will already have a proven track record of good performance, relevant skills, organisational awareness, experience, and culture fit. Moreover, the learning process can be controlled, making it more predictable, both in timescale and the chance of success.
Upskilling will not fully replace the need for recruitment in all circumstances; looking to external sources might be required to fulfil capacity shortages, for example. Yet, while recruitment is becoming more difficult, learning innovations are making competence development easier and less expensive. This is not only offering an opportunity to retain your current team and prevent further skills loss, but on top of this, investment in their development can further motivate employees and enable them to reach their full potential with your organisation. This could also involve reskilling employees from different teams who are employed in current roles that may not be fully utilised, which can also help create a leaner organisation.
The upskilling challenge
Despite the advantages of upskilling existing staff, many organisations find it hard to achieve, and they may not have adequate internal resources to facilitate skills development. As a result, many organisations look to external providers, but the market has been saturated by approaches that are often too generic and difficult to apply to practical situations.
Even sending staff for dedicated training courses or qualifications can also be too theoretical to apply in the real world. And, even if this approach proves useful, individual upskilling without the team member passing on this learning means that employees can leave, and take the skills with them, though this risk might still be preferable to the alternative of an unfilled position or unqualified personnel.
Lasting change – doing upskilling right
The key to effective upskilling of existing staff is to focus on development for lasting, transformative change in an organisation’s capabilities. It’s crucial to have a clear, overarching objective and understand the specific things that the organisation wants to achieve. This is the basis for identifying the skills and competencies that are really required – and helps avoid the pursuit of generic, and ultimately unuseful, training.
To ensure trainees are able to apply the skills they are learning, it’s important to teach them while they perform in their intended role. This should also take place under the guidance of a mentor to maximise real-world effectiveness. Moreover, this ‘on the job’ approach should start from the outset of their training.
This means applying learning in practice, as well as allowing trainees to learn from mentors. They can also shadow experienced team members when the time is right. A practical approach doesn’t mean that the learning should not involve elements of theoretical study – especially if specific knowledge must be relied on – but it should always relate to the specific objective of the training.
This kind of training could apply to an individual or to groups of people from the same organisation, who either work together or are moving to similar roles. Learning as a team comes with the additional benefit of integrating the shared experience of fellow trainees.
Although training that takes place in a ‘live’ situation brings its own immediate appraisal, progress in competence development should be systematically monitored. From outset, there needs to be a clear competence map, illustrating the knowledge and skills that a successful individual in the role should have. Feedback from the mentor, fellow team members, and their manager or training sponsor, enable a participant to review their ongoing competence development.
Results in the real world
The upskilling approach has been used effectively by organisations including NHS England, Unilever, PepsiCo, and Henkel. These leading organisations have gone against the trend, and have been investing heavily in internal development, while effectively achieving organisational objectives – and reducing the cost of recruitment.
Reliant on developing existing staff, this method is also a sustainable route to reinforcing a positive environment. Research from Ipsos has revealed the perceived value by employees of on-the-job training.
Skills shortages are a growing trend, and in a changing world with new technologies like AI, the skills and knowledge in demand will continue to change. If anything, the skills shortage is set to become increasingly challenging for employers.
Doubling-down on external recruitment is not only an ineffective way of resolving the skills shortage, but it’s also a distraction from achieving a systematic solution. Instead, embracing competence development of your own personnel is a key component in eliminating skills gaps.
Wojciech Walczak is Director at Meirik
