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To build or to buy?


Skillsoft's Kevin Young suggests that the key to closing the skills gap for many businesses lies within.

As businesses put the global financial crisis behind them, other challenges have emerged which are potential hurdles to growth. In the UK the business community has identified a widespread skills shortage as a major area of concern which has pushed solving the skills acquisition problem to the top of corporate wish lists. Many companies look to address this by looking outside their organisations to buy in the skills and talent they think they need by hiring new staff. The alternative approach and one I believe to be far more effective in building a productive workforce, is by investing in L&D strategies that generate the skills and future leaders an organisation needs – so building skills internally rather than buying them in. 

Research carried out with 1,000 UK large enterprises highlights attitude changes that need to be addressed if businesses are to successfully build skills that delivers long-term business benefits. A key finding in the report revealed that whilst 86% of UK business leaders identified their organisation as 'skill builders', in reality 31% of businesses have no formal L&D strategy in place in order to effectively implement skills training.

In highly competitive marketplaces, where time is money, businesses often adopt a ‘skill buyer’ approach to plug a skills gap in the belief that this is more effective and cost-efficient. Coupling this with a failure to implement innovative and effective L&D programmes – relying on ad-hoc training programmes rather than engendering a group learning culture for example – companies are missing the opportunity to add long-term value to their business and employees. 

Businesses need to be able to provide evidence of return on investment across all areas of operation. The L&D function within a business is no exception and skills training programmes, whether formal or informal, have to be able to demonstrate clear ROI. Skill building, when done correctly, can act as a useful tool to improve staff satisfaction and retention through advancing their career progression. In addition, the development of internally trained workers is a more effective and efficient route to ensuring that an organisation’s skills needs are met, with significant cost savings in the long term.

Implementing a formal L&D programme that aligns with business objectives, has to become increasingly important as UK businesses move into more stable growth patterns post the fiscal turmoil of recent years. Research has shown that just 20% of organisations surveyed designed their L&D programmes to achieve business growth and development even though there was widespread recognition (68%  of respondents) that clearly identified that career progression increases employee engagement. 

By investing in long term L&D strategies, businesses can generate not only cost saving but also improve the efficiency and effectiveness of their workforce. Of course this is not an overnight fix and as well as investment also requires a shift in mindset away from tactical skills training to more business-focused learning that focuses on nurturing future managers and leaders. Resource intensive learning models such as classroom-style, instructor-led sessions are most prevalent in larger organisations which has a high-cost per hour and can prove disruptive. This cost can be reduced by using modern technology-led, individual learning and training models. By providing the wider workforce with access to quality online L&D content, companies can ensure their development programmes meet both the expectations of HR and management, whilst satisfying their employees.

Failure to implement proactive L&D programmes in line with tangible organisational goals also risks creating a ‘glass ceiling’ effect in the workplace, where employee progression opportunities are stifled and employers struggle to identify talent within their companies. By establishing programmes of continual professional development, relevant to the needs and interests of the individual worker, employers can instead transform their businesses into self-developing organisations whilst improving their staff motivation and retention rates.

Just over half of the business leaders that we talked to believed that L&D can deliver significant benefits in the long term not least by reducing the risk of their employees looking elsewhere for more concrete career progression. A substantial proportion of employers are, it seems, still failing to understand the benefits of a proactive and innovative L&D programme. As such they are at risk of failing to recognise talent within their own organisations and resort to skill buying externally to source the talent, competing for talent in the wider marketplace. Clearly, there is still a need for the L&D community to address an obvious lack of understanding of the contribution and value to a business that skill building can bring.

Kevin Young is Vice President and General Manager, EMEA, Skillsoft

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