You have a 90% chance of being in a company that has a skills gap

You also have a 60% chance of being in one that wastes money on learning and development.

Recent research shows that 90% of companies are aware that they will have a significant skill gap in the years to come. They see that they don’t have the capabilities today that they will need in the near future to be able to deal with the challenges that are coming their way. While this is the overwhelming majority, at the same time, only 16% believe that they know how to close these skill gaps. Essentially, they feel they know what they need but they don’t know what to do about it.

Here comes a shocking number: 60% of these organizations say that their L&D spend has no specific connection to their strategic business goals. Let that sink in. They basically admit to consciously throwing money out of the window. How is that even possible? It is a consequence of business leaders not being invested in or lack understanding of the importance of learning and development as such. Their lack of interest and engagement leads to L&D becoming some sort of siloed HR topic with little connection to the business need. So, while HR might be doing everything they can, they still miss the mark because they are not partnering enough with the business leaders to identify the strategic skill gaps and find a way of filling them.

HR and business leaders should ask some tough questions

What capabilities do we need to drive value for the business? What are the most critical skills for driving business value? How do we acquire those capabilities, through upskilling, training, and hiring talent? How do we assess and transform our approach to skill building and training? How can we position the L&D function as a true partner to the business in order to achieve that?

The first step to addressing these questions is to actually enable HR and L&D functions to learn some critical skills themselves – to be accepted as true partners to the business. This includes the ability to understand the business model, the numbers involved, and speaking the business language (rather than L&D or HR speak). It is about proving that the investment is necessary. You need to prove that there is an actual return on investment from capability building and to be able to calculate the cost of no action for the organization.

If HR (and especially L&D) are able to talk to the business at eye-level, step no. 2 becomes possible. They will be able to partner effectively and identify the strategic capability gaps, adjust the training environment, engage senior leaders in order to showcase the importance of learning on every level of the organization. They will stop flushing money down the toilet for non-essential skill building.

Instead, these organizations become a powerhouse for learning and development of mission-critical capabilities. The essential part here is to prove how every dollar spent on training and capability building is an investment into the future of the company, closing the gap between today’s capabilities and those needed in order to succeed tomorrow. And this might include letting go of nice-to-have trainings or pet-projects of L&D or senior leaders if they don’t hold up in a strategic skill gap assessment and consequently a refresh of the training and development environment.

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I realized over the past few years that overcoming the divide between the business and HR or L&D can be hard! Often, those involved on the L&D side lack business focus or don’t feel competent enough. As a result, they shy away from discussions about the RoI of training and learning. At the same time, business leaders are not consulting well with L&D, and would rather invest in training for their teams to the best of their ability – bypassing L&D. This, in turn, often misses the mark, because these leaders aren’t necessarily skilled enough to identify the strategic capabilities they should invest in. Instead, they unintentionally waste resources and frustrate their people when they realize down the road that the time they invested in acquiring new skills was in vain, because the skills they trained in actually don’t help them do what they need.

There is a 90% chance that you are a business or HR leader in one of the companies that have a skills gap. To close, we recommend you take these steps:

  1. Assess whether L&D is able to conduct a proper capability gap analysis to identify those skills that are mission-critical to fill the gap. If L&D lacks experience, partner with external consultants that have a proven track record in linking capability building to business strategy.
  2. Based on the gap analysis results, re-evaluate your existing learning and development measures in place, including on-the-job and classroom training, job rotation, and others. Identify and preserve the measures that help you fill the gap and discard the rest.
  3. Design and implement new learning and development programs that help your people build both technical skills (hard skills) and people skills (the famous soft skills) needed to live up to the challenges coming their way. Make sure the capabilities and content of these programs have a clear link to the business need. Ensure they are reverse engineered back from the business strategy of the organization.
  4. Implement and measure success on an ongoing basis and gradually adjust your L&D efforts to make the most out of the resources you invest into closing the skill gap.

Feel free to reach out to learn more about how we can support you to align capability building to your business strategy and close your organization’s mission-critical skill gap.

Alex Brueckmann 

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