Skill shortages in the economy are hitting large and small businesses alike – but is it realistic for small businesses to invest in upskilling employees? And are there any long-term benefits?

There’s been a lot of coverage of the skills shortages in Australia. Human Resources Director recently quoted Treasurer Jim Chalmers reminding us that raising the cap to migration isn’t the only answer to skill shortages. He talked about training people for job opportunities and how the business community can potentially take a role. 

But if you’re a small business owner, it can feel like unfamiliar territory. The good news is that upskilling employees can help your business, and it’s not just in the remit of the really big companies

Benefits of Upskilling

Upskilling can help in three key areas: the long-term viability of your business, the ability to retain great people, and the ability to hire great people.

Long-Term Viability 

How does upskilling help with long-term viability? As I’ve mentioned before, and discussed with Lachy Grey on my other podcast – Make it Work, the World Economic Forum (WEF) releases a Future of Jobs report every few years. It looks at the skills that will be required in the workplace into the future, and in particular, the top-10 skills that will be needed through to 2025. The results? Eight of those top-10 skills are people skills, or soft skills.

This may surprise some people who think we really need technical skills. But the rise of ChatGPT is showing us that robots and computers can only do so much, it’s very difficult to replicate a human being’s critical thinking, creativity and innovation. 

it’s very difficult to replicate a human being’s critical thinking, creativity and innovation.’

The WEF also reports on the rate of automation in the workplace. According to its findings: 67% of jobs are done by humans in 2020, but this is predicted to fall to 53% in 2025. That doesn’t mean that automation is taking over and humans are redundant. Rather, it means that 50% of employees will need reskilling by 2025; and 40% of current workers’ key skills are expected to change in the next five years. 

These are big numbers. And it may seem it doesn’t have a lot to do with you. But your competitors may be looking at those numbers, and understanding that the business landscape is going to be very different in five years.

Many companies found that COVID caused a big shock to their business. But there are other changes happening in the world that will have a similarly huge effect on how businesses work, including the rate of automation and the uptake of AI. It’s important to stay on top of that and ensure you are upskilling your employees so you can stay relevant in the market and continue to provide services that people want.

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Retaining Key People

There’s lots of research demonstrating the importance of staff development. For example, Capterra has reported that nearly 50% of companies were spending more on upskilling their employees in 2022. 

nearly 50% of companies were spending more on upskilling their employees in 2022’

Another one from WorkDay suggests that people leave when they don’t see a path for personal development. Its data shows that nine months before somebody quits, they start to show a decline when asked questions related to their ongoing development. 

Employees feel that all aspects of their growth are stalled, including feeling that they’re not:

  • growing professionally
  • on a career path in the organisation
  • in a job that allows them to learn and develop new skills
  • supported by a manager or mentor who’s encouraging development. 

It’s fascinating, that it’s nine months before they quit that the data starts to decline

There’s another report from Capterra around remote work that looks at how larger businesses are increasing their spending on learning and development, whereas smaller businesses of under 100 employees are keeping their learning and development spending the same. To me, this suggests that if you’re a smaller business, and you’re competing with these larger businesses that are paying higher salaries and increasing the development of their employees, it’s going to be very difficult for you to retain key people when they’re getting calls from recruiters saying, ‘Hey, do you want to come over to this bigger business?’ 

You may think ‘yes, I agree, but we don’t have the funds’. I will outline how you can do this affordably, but first, let’s also look at the benefits in terms of hiring people. 

Hiring Key People

The government recently released the 2022 population statement, and it showed that we have a smaller, older population and a tight labour market. Anyone who has tried to hire recently will know it’s been difficult. There have been very public layoffs from large, international tech companies, but there’s an awful lot of organisations in Australia that aren’t those big tech companies that aren’t doing layoffs, and are still really struggling to hire people. 

There’s also a term that’s been reported as ‘quiet hiring’, which is when you actually upskill your employees with new skills and capabilities, so that you don’t need to hire other full-time employees because you’re getting that productivity increase. 

Another trend that ‘s being reported this year, is that we need to loosen the formal education and experience requirements in job postings. Gartner has concluded that candidates are looking for nonlinear career paths. If we have skill shortages, and we’re really struggling to hire people, we need to be much more comfortable in assessing candidates on their ability to perform in the role rather than their qualifications and prior experience. 

We need to be much more comfortable in assessing candidates on their ability to perform in the role rather than their qualifications and prior experience.’

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How to Upskill Employees as a Small Business

How can you upskill if you feel that you don’t have a lot of resources at the moment? As a case study, let’s take a look at one of our Amplify HR clients who came to us knowing that they had some really key people that they needed to retain.

Case Study: Tech Company Upskilling

The business was going through digital disruption, and it was a tech-based company so lots of employees had high levels of tech certification and tech knowledge. But really, the business needed people skills (or soft skills) that they weren’t getting through their tech development. If you go back to the World Economic Forum report, we know that these are the skills that can’t be ignored; they are critical for people to develop. 

Our key strategies:

  • Structured sessions We worked with our client to put together an all-company program: five sessions, six weeks apart, with each session running for two to four hours. 
  • Naming the program A clear name for the program was important because it meant that everyone became familiar with the whole program. People had the sense that this was not just a one-off, walk-in walk-out training session. 
  • People skills We based the program on people (or soft) skills, but also on the organisation’s needs. For example, when we looked at the Employee Assistance Programme, we saw that usage had increased slightly over COVID. We wanted to make sure that we had more of a focus on topics like resilience, mindfulness and wellbeing within our sessions. 
  • Inclusiveness It was open to everyone, and about half of the employees registered. 

The results? We found that it not only developed people’s skills, but also increased collaboration, because you had people attending these sessions together that in their day-to-day job may not have come across each other. So it was really good to see that cross-functional engagement.

The five sessions were iterative, which meant participants were not just going to one training session and then going back to work and forgetting everything. We had an ongoing process that reinforced key learnings. 

We received really great feedback from the sessions that we could share with the client but also we saw improvements in their staff survey results around engagement and increased satisfaction with development

Upskilling is not difficult, and not expensive

That’s one example but it’s not the only one. We’ve run this program with many organisations. It’s not difficult and it’s not expensive. Any small business can do a version of that. And of course, if you want to know more than you can reach out and we can have a conversation.

In terms of other more specific tips, there are a few prior Find Grow Keep podcast episodes and related articles on developing and upskilling:

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