New, data-driven technologies are upending every department across the organization. Big data, and the powerful insights they generate, are gaining ground everywhere we look as professionals embrace never-before-seen levels of transparency, optimized workflows and predictive analytics to improve their performance.
In the digitally transformed enterprise, data-driven insights are becoming central to every department’s decision-making processes. There’s a clear need for all employees to develop at least a basic understanding of how to wield data as a day-to-day business tool. Organizations looking to embrace the benefits empowered by digital transformation and data-driven technologies are faced with a conundrum: where should they source the talent and skills needed to integrate these powerful new value-generators into their business?
The good news is that there are just two choices: externally via new hires or internally by reskilling and upskilling existing employees through L&D and on-the-job training programs. The bad news is that there’s no clear-cut answer as each organization contends with this question according to its own specific strategy, culture and circumstances.
We recently held an in-depth webinar with senior HR executives from some of the world’s leading organizations to find out what they thought about the value of reskilling and upskilling versus new hires. Specifically, we discussed whether hiring externally is the right way to go or whether it’s better to develop internal reskilling and upskilling programs
Read a short summary detailing some of the fascinating insights that we discussed in the webinar for yourself.
Improve Branding, Retain Knowledge and Increase Loyalty
The digital skills gap is only increasing — according to the World Economic Forum there are currently 756,000 unfilled jobs in the European ICT sector, and by 2022 new technologies will have created 133 million new roles globally. These new jobs will demand high proficiency in data and technical skills like programming, data analysis and app development, as well as soft skills like creative thinking, problem-solving and negotiating. The only issue is that there are simply not enough skilled professionals to go around. Organizations are challenged to find individuals with the talents and skills to meet their demand, both from within the organization and from without.
But that’s not all. The enterprise itself is currently accelerating the pace of its digital transformation as a dispersed, remote workforce, and new workflow software for nearly every profession becomes the norm. This means that even traditional professions — such as bankers, lawyers, insurance brokers, accountants, manufacturers and basically everyone else — will soon require more and more digital skills knowledge to perform their day-to-day tasks.
- PWC’s 2019 CEO Survey reports that 79% of CEOs fear that a lack of essential skills among their employees is slowing down growth, up from 63% in 2014.
- 70% of employees don’t have the skills they need to do their job, according to Harvard Business Review.
Reskilling and upskilling through L&D programs offer organizations a highly effective mechanism to meet these challenges in stride. There’s no question about the positive effects of L&D programs that develop existing employee skills as a way to fill new job openings without external hiring. Upskilling existing employees is cheaper and takes less time than hiring new talent. What’s more, by reskilling existing employees, enterprises benefit from high levels of productivity from day one, as they’re able to significantly reduce onboarding time.
Organizations that invest in robust L&D programs and offer long-term career growth, benefit from enhanced employer branding. Gallup reports that 87% of millennials — the largest demographic in the workplace — rate professional growth and development opportunities as extremely important when looking for a new job.
Yet another benefit of strong reskilling and upskilling programs within the company culture is knowledge retention. Happy employees stay longer and are more engaged. This translates into less knowledge lost because of high turnover and frequent onboarding.
There’s a Time and a Place for External Hiring
All that’s not to say that external hiring is an unavoidable aspect of doing business that sows disruption and results in unhappy employees. There are definitely cases where external hiring is the best, and possibly only option to meet growth metrics. Still, one should be aware of the pros and cons of external hiring when considering how to fuel expansion and growth.
Hiring talent is the only way to go when experiencing fast growth. Many of today’s most well-known companies were founded in the last decade. Uber, Airbnb, Instagram, Lyft, Doordash, Slack and Tinder each boast thousands of employees and multiple offices across the world. The only way to fuel their hyper-growth was through massive external hiring.
External hiring is also an excellent way to bring fresh, new perspectives into the organization, improve diversity and rejuvenate its DNA. In some organizations, company culture can stagnate and group-think becomes the mainstream, even if it’s way off the mark. New hires bring fresh ideas and perspectives that can create insights and new products and services that will positively impact the bottom line.
With so many new technologies changing the way we do our work, organizations are challenged to quickly bring in new skills and talents. They can either develop the talent from within the organization — which requires robust L&D infrastructure and employee training programs — or hire externally.
While the advantages and benefits of developing that talent internally are clear to all — reduced hiring costs and time to hire, increased employee loyalty and employee branding are just a few — it’s not always the right way to go. In some cases, hiring externally is the only way to sustain hyper-growth or rejuvenate the company culture with fresh, new perspectives.
Regardless of which way your organization chooses to bring in new talent, ensuring that it has a robust L&D program in place is essential to securing and sustaining long-term growth in the years to come.