A company’s strength depends on how diversely skilled its employees are and how well those who hold the reigns understand those skills. With the current crippling talent shortage in South Africa (despite high unemployment rates, we have a critical shortage of people with the necessary professional and specialist skills), it’s vital that businesses develop their existing talent to ensure they keep them in the fold.
Upskilling team members – developing an employee to obtain new and in-demand skills – is one of the best ways to retain employees and expand their industry knowledge that can be ploughed back into the company. Let’s take a look at what happens when you don’t upskill your employees vs what happens when you do. And then we look at how to do it.
South Africa’s Great Resignation
Traditionally, the main reason employees resigned has been better pay, followed by better career opportunities and development. This trend has flipped in recent years – today, only approximately 20% resign for better pay, whilst more than 70% resign for a better work-life balance, flexibility, career development, and a healthier culture and leadership.
In South Africa, it is mostly skilled professionals who are seeking more favourable working conditions, higher pay, or more flexibility in where and how they work. This has put immense pressure on businesses to retain top talent – including Gen Z and millennial employees – and thrive through 2023 and beyond.
Yet the solution is in plain sight. Gallup found that the top reason employees leave their jobs is a lack of personal career growth opportunities, while at the same time, a PwC survey showed that 77% of employees are ready to develop new skills within their current roles or retrain for new roles to ensure they will remain employable.
The high cost of replacing employees
Employees are an expensive investment. Turnover costs are substantial, and not always in a direct monetary way. In small businesses, most of the employees run on what’s described as ‘tribal knowledge’ – when a member of the tribe leaves, they take their knowledge with them.
Recruitment and hiring costs, such as fees to recruiters or job advertising, are also costly, especially for skilled employees, and it’s not uncommon for recruiters to request 20-30% of a new hire’s first-year salary. Interview expenses, including travel and time spent interviewing candidates, and post-interview tasks, such as checking references and administering pre-employment tests, all add to the cost. And that’s not even counting onboarding and training, and purchasing special equipment or supplies, all while new employees aren’t producing at a high level.
It’s also known that external hires usually demand 18–20% more in salary than internal hires, and it usually takes 8–12 weeks to replace a knowledge worker and then another month or two before the replacement is fully productive.
Depending on where you are in the hiring process, businesses will still be responsible for the former staff member’s accrued leave, any overtime, and paying the remaining team to pick up the slack.
The value of upskilling employees
Upskilling is developing employees’ skills and knowledge to enable them to advance in their current roles and careers within an organisation. It is a crucial step business leaders must commit to, and has been proven by a McKinsey & Company report that shows that skill building (more than contracting, hiring, or redeploying employees) is the best way to close skills gaps in the workplace.
It’s a fact that employees who learn new concepts and skills are more engaged at work, and engaged employees are more likely to stay in their jobs. Upskilling additionally improves morale and increases productivity while saving the company on recruitment costs; a Gallup report estimated the cost to replace an employee could be two times their annual salary.
Upskilling also ensures an adaptable, flexible, agile workforce and enables employees to grow both personally and professionally. Lastly, upskilling improves an organisation’s reputation for being supportive of its staff and their career growth. This creates a positive company culture and external image of the brand, which in turn, makes it easier to attract and retain top talent.
Learning the HOW and not just the WHAT
When it comes to upskilling and even re-skilling (when an employee develops new skills to take on an entirely different role), traditional learning management systems are not equipped to handle employee and programme-centric requirements. This is primarily because they only deliver training once and don’t provide practical and workplace-applicable content that evolves with various industries.
MasterStart’s scaffolded learning approach means that each week learners build on the previous week’s learning and practically apply concepts from the course. One of the main benefits of scaffolded instruction is that it provides a supportive environment where students engage in peer-to-peer learning. They are free to ask questions, provide feedback and support their peers, so becoming active learners which is key to the success of learning online.
Upskill and re-skill your key employees with MasterStart
The future is moving fast, but there’s still plenty of time to change it if you take the right steps. Stem the resignation tide at your business by seizing upskilling and re-skilling opportunities that are relevant to both your core business and match your employee’s ambitions. Contact us about our accredited and university-supported online short courses that provide the in-demand skills needed to retain top talent.