19 August, 2021


UK businesses have experienced a year like no other. Lockdowns have cost the economy £251bn and unemployment is rising. In the face of pressure testing and huge restructuring requirements, many organisations are looking to boost employee skills as a way to adapt and thrive. Workforce reskilling is now ranked the number one or two investment priority for HR in 2021. So the question is why and why now?


At Mercer, we are seeing the following primary factors driving organisations’ focus on skills.


Skills and reskilling in particular, unlock business agility


Adapt or die. Businesses that were able to redeploy employees during the pandemic and coped or improved during the downturn are now better-placed for growth. Verizon redirected nearly 20,000 affected store-based employees to apply their skills in other roles, such as in telesales or online customer service. Similarly, companies who had delayed implementing remote working in their contact centres for years suddenly found they could adapt almost overnight to homeworking.


Prior to the pandemic, executives believed 45 per cent of the workforce could adapt to the new world of work, however we now know that everyone is capable of adapting. Businesses have identified that if they can pinpoint skills requirements, and match to current skills, they can be far more agile in how they move talent around. Workforce planning therefore becomes more about capability than capacity.


Skills are critical to enhancing productivity


According to the Future of Jobs Report 2020 by the World Economic Forum, 50 per cent of all employees will need reskilling by 2025. The vast majority of this disruption is related to technology either disrupting or eliminating jobs.


Currently, 99 per cent of organisations are undertaking a transformation, most of which are affected or derailed by an inability to source critical skills from the external market. Businesses have relied on a “buy” model for too long, which impacts productivity, especially in a tight labour market like the UK, as it is too slow and expensive to find specialist skills.


We are increasingly seeing companies move back to a “build” model for talent (76 per cent in 2020) precisely because it gives the company more control. They can tap into their existing workforce and identify new talent pools with associated development plans. Organisations can target learning investment far more effectively to those areas with greatest ROI while also reducing time to hire and reward spend. And the investment increases employee opportunity and progression.


Reskilling and career opportunities are now essential to employees


Learning is no longer a nice to have. Upskilling and career pathways are now a top concern motivating employees’ decisions to stay or leave. Thriving employees are four times more likely to say they work in cultures supportive of mid-career moves and four times more likely to experience a culture of learning and growth.


However, our research found only half say it is easy to sign up for internal gigs today. Businesses that can show investment in employees win in the market for talent. With an average investment of £750 per head, UK is still far behind many other countries including the US and China. Investment in learning opportunities will need to increase in many organisations.


Improved technologies and data


For the first time, technology is making it easy to understand the skills that business needs in the future, skills requirements for individual jobs and current capability gaps. The latest skills libraries scrape billions of data sources to pinpoint those critical skills needed in jobs. Being able to value the premium on skills in the market is revolutionising how we reward people.


Latest career path technologies like EightFold, Gloat and Fuel50 create a great user experience making it easy to identify career paths across the company and thereby unlocking far more varied options and development opportunities for people. Finally, learning platforms are bringing innovative new ways to target development and learning in a way that maximises both the user experience and ROI.


Mercer expects skills to be a vital component of HR strategies moving forward and a source of speed and competitive differentiation to those that take up the challenge. Those organisations that want to stay ahead will invest time and resources into developing their businesses and expand the skills of their workforce.


If you would like more information on developing a skills strategy for your organisation please contact Lisa Lyons


This article first appeared on the People Management website on 24 June 2021.

Lisa Lyons
UK Workforce Transformation Lead

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