Organizational rationale for prioritizing skill building typically focuses on preparing employees for the “future of work”. Trends like automation and digitization are often the reasons behind increased employer spending on reskilling and upskilling, whereas employee retention is more of an afterthought.
Despite uncertainty in the labor market, one thing is clear: employees are more incentivized to switch jobs than ever before. Below we’ll share why this is, and how employee skill building to promote internal mobility can address it. We’ll also give our take on who’s leading in the space from an employer perspective ahead of offering our thoughts on what skilling providers can do in response.
Our June newsletter defined reskilling as “looking for people with adjacent skills that are close to the new skills your organization requires and training those people to do a different job”. We defined upskilling as “teaching employees new skills to close talent gaps”. Both develop workers in ways that promote internal mobility (the internal movement of employees, vertically or laterally, for career transitions or development).
Internal mobility is an important factor in driving organizational retention. Employees who are not promoted or do not experience an internal lateral job change have a 45 percent chance of staying with an organization. Comparatively, employees promoted within three years of hire have a 70 percent chance of remaining, and those who make a lateral move have a 62 percent chance. Reskilling and upskilling increase opportunities for promotions and lateral moves, driving retention.
The Great Resignation
As we’ve discussed in prior months, labor market trends reveal future uncertainty. One area where there is more certainty involves the trends surrounding employee attrition. A record-breaking number of Americans — 47.4 million to be exact — quit their jobs in 2021. And the “Great Resignation”, as it has been deemed, shows no signs of stopping.
Merely offering internal reskilling and upskilling programs to employees isn’t enough. The opportunities must be designed intentionally to be consistent, measurable, and aligned to each learner’s current skills and future goals. To demonstrate, we’ve highlighted several companies below who are paving the way with innovative internal mobility programs that are driving employee retention:
Amazon has committed to investing over $1.2 billion into upskilling 300,000+ U.S. employees free of charge by 2025. Their Career Choice program has impacted over 80,000 Amazon employees to date. In particular, the AWS Grow Our Own Talent program offers on-the-job training and placement to Amazon employees with nontraditional backgrounds. More than half of Career Choice participants plan to use the education to advance within the company.
Workday introduced a skills-based people strategy in 2021. The initiative helps employees identify and close skill gaps via inter-organizational assignments. Initial data is encouraging: 95 percent of participants report developing new skills or honing existing ones. According to People Officer Ashley Goldsmith, participants experienced increased connection to and engagement with their work. Workday views this as increasing retention.
In 2020, KeyBank partnered with Tech Elevator to launch an employee reskilling program. The goal was to increase diversity and improve retention in technology roles. The Tech Ready initiative is designed to reskill existing employees into software engineers. So far, the program has graduated 67 employees. Enrollment and interest in the program have tripled since it began. KeyBank has seen an encouraging 100 percent retention rate for program graduates.
A Preview of What’s to Come: The Skilling Provider Landscape
Reskilling and upskilling offer many benefits to employees and organizations, creating a space ripe for provider support. Skilling providers face a variety of considerations in developing their go-to-market strategies. One paradigm, for example, involves the decision to focus on assessment tools versus skilling content. Some providers have chosen to narrow in on skill assessments and analytics, arming clients with knowledge for internal decision-making around employee capabilities and gaps regardless of their content choices. Others are focused entirely on delivering higher value training content after assessments are already completed. In still other cases, providers have decided to offer both capabilities in an effort to provide a seamless solution.
In a future newsletter, we’ll explore the go-to-market dynamics of the skilling provider marketplace. Specifically, we’ll examine the tension between tools and platforms which are perennial but often secondary considerations and content which is more frequently primary, but often less sticky. We hope you’ll weigh in. Whether you’re considering entering the skilling space as an employer or provider, or if you’re looking to enhance existing organizational capabilities, Tyton would welcome the opportunity to support you. More broadly, we are happy to discuss these trends or others in the sector at any time.
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