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The past few years have been some of the most dynamic — and difficult — times of our lives. From emerging COVID-19 waves to record-high inflation and growing fears of recession, the world is in a constant state of flux.
Right now, many companies such as Tesla are making the tough decision to let go of their talent. Others including Meta, Intel, and Uber are implementing hiring freezes or cutting budgets. Everyone is reacting to accommodate for an economic slowdown. In the face of market volatility, inaction is not an option for business leaders.
Leading a company through these periods of change poses significant challenges, often requiring we make critical decisions that affect both shareholders and employees. The survival of the business is imperative, but from my vantage point, the needs of shareholders and employees are not mutually exclusive.
Intentional, thoughtful agility
As a founder and CEO, I’ve committed to building a business in a world that is constantly changing and taking the steps necessary to ensure its survival. At the same time, as an employer, my greatest priority is taking care of my employees. Letting talented people go during turbulent times is not only consequential for those individuals but it is often detrimental to the organization. I’m confident that retaining my employees during an economic downturn, helping them understand their skills and capabilities, and actively investing in their growth will allow them to continue their careers and meaningfully contribute to the future success of our business.
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Here’s the thing: The most impactful advances in AI, blockchain, 5G, biotechnology, and countless other innovations have yet to come. And these fields are evolving very quickly. The companies that are intentional with their reactions to change need to make agility a strength. In doing so, they build learning agility into their current workforce and bring in more people with that skill.
Strengthening our ability to pivot in the face of external market changes — and pivot quickly — is key for business survival and enduring excellence. Leaders can take steps to bring their people along the journey and ultimately emerge stronger when the next business expansion begins.
Why upskilling is an integral part of a recession-proof talent strategy
Skills are quickly becoming obsolete. According to the World Economic Forum, 50% of all employees will need reskilling by 2025. Perhaps counterintuitively, layoffs and cautious approaches to hiring serve to widen the skills gaps within enterprises. Leaders simply can’t afford to wait for the economic “all clear” signal and the next hiring boom to bring the skills rising in demand into their workforce.
As is evident from the tightness of the recent and current job market, companies can only address the talent needs of a future-fit business with upskilling. Even in a healthy economy, hiring individuals with new skills is costly. An online course costs only a fraction of the time and resources of onboarding new talent, where it takes up to 12 months for them to reach peak performance potential. In a hiring freeze period, where new skills are not coming into the workforce, equipping current employees with new skills is the only way to close these critical skills gaps.
In hiring slowdowns, retaining highly skilled top performers is mission critical. A dedicated focus on personalized upskilling contributes to reduced attrition. Studies show that employers who invest in career development build more engaged workers in the long term. They want to stay to learn new skills, work on exciting new projects, and grow their careers within the organization, not elsewhere.
When markets eventually shift back in favor of candidate preferences, and workers have their pick of companies to work for, they will choose the organization with a proven track record of investing in upskilling and taking care of their people. Companies that invest in building learning cultures emerge from disruption with a stronger employer branding value proposition.
Companies don’t have a granular understanding of their people
The challenge today is that most organizations don’t have a comprehensive understanding of the skills makeup of their workforce, let alone the learning agility of employees at an individual level. As a result, there is little insight into who can do what, and employees lack visibility into their own career paths. Findings from our new survey of HR leaders suggest most organizations are struggling to offer career advancement opportunities to their workforce, with only 34% providing visibility into all employees’ current and future skill needs.
With the right insights, people can gain a deeper understanding of their capabilities, learnability, and career path options within the company. It enables them to work towards specific desired outcomes and shows them they are critical to the company’s future success. Aligning those outcomes and career paths with the future capabilities needed at the organizational level turns upskilling into a strategic competitive advantage.
Devising an effective upskilling strategy is only possible with deep-learning AI. Otherwise, the data is simply too complex and the process exceedingly cumbersome. People today have multiple career trajectories. Keyword matching will no longer work for transitioning people between departments or even industries. And tapping into AI is the only way to identify learnability and potential, the element that truly makes people and businesses future ready.
A dual commitment to business continuity and employee wellbeing
Over the past few years, there has been tremendous attention on employee well-being and the employee experience. Take care of your employees, absolutely, especially during turbulent times. The best way to care for your people is to know them, guide them, and invest in them.
This effort and commitment will pay off when your company emerges on the other side with a highly skilled workforce and a learning culture that attracts more high-quality people.
Ashutosh Garg is the co-founder and CEO of Eightfold.