It depends. But one thing we can agree on is that doing nothing is definitely not an option. By 2030, 94% of today’s workforce will lack the skills needed to do their job effectively.
Not on our watch! The skills stakes have never been higher, and you need to make the right decisions on a case by case basis. But to do that properly, you need context.
To know the possible pitfalls, the assumptions that lead us astray and the data for deciding whether you should upskill people or hire new talent. Here are the biggest considerations you need to make…
There’s no guarantee that external talent will tick your boxes
Check out some online job listings, we bet you’ll see plenty that were posted months and months ago! Why? Because posting a vacancy doesn’t mean you’ll find applicants with the right skills.
In PricewaterhouseCoopers’ 2021 CEO Survey, three-quarters stated that finding the right skills was a threat to their business, while a PeopleCert study found six in 10 job applicants lacked the skills employers were looking for!
Without getting ahead of ourselves, what if someone currently in the team had the potential to upskill and you lost out on months of productivity by seeking an external solution to the problem. That’s before we consider the morale impact for that existing employee.
Does someone in the team have a talent foundation you can build upon?
There’s also no guarantee that someone in the team can step up. However, as CitiBank’s Kate Matthews explains:
“It’s also easier in many ways to use the institutional knowledge that you already have and layer on that more skills rather than bringing in new people from the outside.”
Current employees have a wealth of company knowledge that new hires just can’t match. From the practicalities of the product to the culture and values, they have a natural advantage when picking up new tasks and talents because they’re not learning about the company at the same time.
The question is whether they have the potential or transferable skills to match. People aren’t simply promoted on their knowledge of the business, it should be based on their ability to drive impact in the role.
If you’re measuring skills and proficiency in your people, you’ll be far better qualified to answer that question!
At HowNow, we measure skills on a five-point scale from Novice to Expert, allowing you to assess which skills people have and to which extent. Imagine being able to map that against job descriptions for your vacancies and truly identify potential candidates who’ll not only fill those shoes but hit the ground running in them.
Book a demo today and we’ll show how measuring skills works in practice!
What are your goals, and when you do need to accomplish them?
Like so much in life, timing is everything in the great upskilling or hiring debate. If there’s a huge product launch in one month and you’re lacking public relations (PR) skills in the marketing team, it’s probably unlikely you can upskill in that time frame. However, there’s also the issue of how long a new hire might take to get up to speed…
If launch is three months down the line, you might choose to speak with a recruiter and understand whether the candidates are out there to plug that skill gap!
If there are short and long-term goals, maybe in this case one product launch now and one later in the year, you may even choose to outsource in the short-term while you upskill a promising PR guru in the team.
Don’t hire for the sake of it. Don’t upskill for the sake of it. Consider goals and impact, and then make a rational and logical decision about the best way to achieve those.
Consider what’s causing your skills gaps
If it’s because of employee turnover, there’s probably no better argument for needing context before making a decision!
Why is your company a sinking ship with skills heading overboard every time people decide to walk the plank to a better opportunity?
Wouldn’t the ideal scenario be not having a skills gap to close?
However, it’s not as simple as the exit door, maybe the industry changes faster than you can keep up or new technology requiring specialist skills is implemented. It could be that your L&D efforts aren’t up to scratch, and people aren’t learning at work – which means skills gaps open up as a result of development inactivity.
Knowing why you have a skills gap is an incredibly important part of closing that and future chasms effectively. It’ll also help your long-term upskilling and hiring plans.
Managing the people who help manage the loss of talent
Let’s say your skills gaps have been opening because people are finding new openings in other companies. What’s happened since? Chances are, someone has plugged that hole to an extent. While they might not formally be upskilling, they could be picking up skills that mitigate the loss of talent in the short term.
You might decide that they’ve shown enough to upskill into that role. Maybe they haven’t, and it means you need to hire. It’s how you manage that decision and communicate with your gap plugger that matters.
If they do want to progress into that position and you fail to explain your next decision, you might demotivate them as they resume their normal role. Or maybe the temporary role has shown them they don’t want to develop that particular skill but it has put them on a different path they want to follow. You won’t know unless you speak with them!
What’s in the budget? Do the numbers add up when it comes to hiring and upskilling?
Hiring can be an expensive habit. That’s why many people leaders try to strike the balance between upskilling and recruitment. And that’s not to say that upskilling comes at no monetary cost, it can do, and it can also require resources in a different sense.
However, one number that is set in stone is your HR, L&D or people development budget. And hiring external talent will eat into it! It’s estimated that the cost of recruiting a new employee sits between 20% and 30% of their final salary, while the average in monetary terms is around £3,000.
From job listing fees to consultant costs, the recruitment bill soon adds up. So it’s crucial that we consider how frequently we want to do that. It’s also worth remembering that the outlay can increase with the seniority of position which could inspire your internal mobility efforts.
How doing one could help with the other: Why you need to upskill AND hire!
Pick your moments, get the balance right and you could be winning at both in the long run!
According to Workable, 74% would prefer to work at a company offering upskilling and reskilling opportunities. But how will they know if you’re offering them? Well, if you just worry about offering those chances to develop, the rest could happen organically.
Your ideal candidates might have checked out your job description and never applied. Why? Because they’ll look at what current and former employees have to say before submitting an application. And if they don’t like what they read, don’t expect an overflowing inbox…
70% of people visit Glassdoor pre-application, while 84% of job seekers say a company’s reputation matters before they click the apply button. Glassdoor’s research even revealed that 34% are trying to establish whether they can grow in the company, and 33% are working out if there’s a track record for promoting from within.