The 2020 guide to effective learning and development strategies for modern businesses.
The new world of skills
A McKinsey report on the future of work suggests that automation could displace 800 million jobs by 2030. It’s enough to cause anxiety to many! At the same time, the continual adoption of new technology is forcing everyone to upgrade their skills. McKinsey notes that 32% of workers aged 16-54 may need to retrain in the next 12 years, regardless of their position.
Our working lives are changing at such a searing pace that many of us are having a hard time keeping up. Where once there were jobs for life, today many employees are only guaranteed work for the life of a project.
In uncertain times, professional ability translates into job security. The more current your skillset, the more employable you are. It’s no wonder Gallup found that learning and development (L&D) is the top factor in retaining millennials.
And this is not just about technology. Over the next decade, hours spent on manual and basic, repetitive or process-driven skills will decline, while hours spent on higher cognitive skills and social and emotional skills will increase, alongside technology skills. The social and analytics skills required to cope with a changing work environment will be prized by employers and employees alike.
For businesses, upgrading employee skills has clear benefits. Your staff become better at their jobs, even as those jobs change. But in the new world of skills, L&D takes on a more strategic role. Your L&D strategy says something fundamental about you as an employer, and you can be sure that your current and potential talent is listening.
This guide will outline the new world of L&D, and why businesses that get it right can reap the benefits of increased productivity, easier recruitment and better retention.
The L&D case for business
The biggest expense for most businesses is labour, which can typically account for 70% of total costs. But today’s talent is fickle and can easily move on – in which case the costs ramp up again. According to one study, the average employee costs SMEs £11,000 to replace.
It’s therefore better to retain the talent that you have, right? Most of the time, yes. But stagnation is a curse to business too. Growth requires drive. Progressive companies need agile employees prepared to exploit the opportunity to learn and develop, and businesses need to provide those opportunities. If the half life of a skill is five years, much of what an employee learned five years ago is already irrelevant.
A modern L&D strategy that embeds continual learning in company culture is the answer. It helps to retain your best talent while ensuring their skills are never obsolete.
The L&D case for talent
There are few jobs for life anymore. As far as your best employees are concerned, you might downsize, or automate their role. Or they might just get a better offer.
Gallup research finds that 21% of millennials switched jobs in the last year. Plus, many don’t hop from company to company: they leap off the corporate ladder altogether, into freelancing, the gig economy, and selling their services on a project by project basis.
They want more control over their careers, and see L&D as an investment in their futures. Three quarters are ready to learn new skills or retrain in order to remain employable. The knowledge they obtain, rather than the company they serve, is their guarantee of security. Companies that provide opportunities for development will get more of their time and more of their focus.
What L&D should achieve
With all that in mind, a modern L&D strategy must aim to:
- Create a continuous learning culture that ensures skills stay current and staff remain productive.
- Ensure employees remain engaged. In one study, 80% of respondents said L&D was a key driver of employee engagement.
- Help you retain talent. Modern workers are not – on the whole – singing the company song. Deloitte found that 49% of millennials would quit tomorrow! But that just makes it easier to stand out as one of the good guys, and a pwc report reveals that younger workers rank L&D as the number one benefit an employer can offer.
- Help build your employer brand. L&D is an investment in your people and in the future. That’s a positive message to shout about – especially in a world where employers’ reputations are won and lost on third party websites like Glassdoor.
A learning and development strategy for the ages
So you need an L&D strategy, but what might it look like? Here’s a typical approach…
Mind the gaps
The starting point of any L&D strategy is knowing what you want to achieve. According to the Chartered Institute of Personnel Development (CIPD), this might include – but go well beyond – clear bottom line benefits:
- Learning should be targeted on key performance needs. That’s the needs of the business and also the needs of individuals. Employees will engage with training that has an obvious career benefit.
- Learning should build “human capital”. Continuous development opportunities create an engaged, motivated workforce, aiding recruitment and retention.
- Learning should be part of a wider business strategy. An ongoing investment in people ultimately reaps rewards in terms of performance and customer experience.
Is L&D worth it?
In a word, absolutely.
You might want to compare the costs of an L&D strategy with the costs of not having one. Can your organisation hope to thrive without up-to-date skills and an engaged workforce?
Having said that, L&D activities need to be properly costed so their impact can be accurately measured. Costs will depend on a huge range of variables. This CIPD document (free login) has much more on costing an L&D strategy.
Putting an L&D strategy into practice demands the same project skills (planning, execution, metrics) as any other corporate objective:
- Align your strategy to wider business goals to get senior stakeholder buy in. According to the CIPD, “without senior stakeholder support, L&D will not achieve anything at all.”
- Define processes. Where do your priorities lie? Training everyone is ideal, but in practice firms tend to prioritise “key talent” – those employees earmarked for promotion.
- Design learning journeys. What does ‘good’ look like for each individual? How can L&D get them from where they are now to where you want them to be (and where they are happy to go)?
- Pin down learning styles. Online, classroom based, blended, collaborative? Consider these in relation to your objectives, your learners and your existing or desired corporate culture.
- Measure impact. According to one study, only 31% of L&D leaders identify KPIs they want to improve in collaboration with senior business managers, but those that do report more success. What KPIs might you want to measure? They will differ by company and industry but might include a mixture of short and long term metrics:
- Completion rates. Did your learners finish the course?
- Satisfaction rates. Did they find it useful?
- Success stories. Don’t be afraid to share shining examples.
- Retention rates. The effect of your L&D strategy on employee retention.
- Performance rates. The effect of your L&D strategy on employee performance. Did learners implement new ideas in their day-to-day roles?
- Progression rates. Does your L&D strategy have an impact on internal career progression?
- Customer satisfaction/company performance. Ultimately your L&D strategy needs to be seen to contribute to wider company goals.
- With KPIs in place, you can review, refine and improve; and then secure your next cohort of learners.
Going beyond the traditional L&D strategy
An L&D strategy is necessary to keep your business and its employees skilled and engaged. But progressive companies are moving beyond traditional L&D, and making continuous learning part of their company culture.
That’s increasingly necessary. According to the Deloitte 2019 Global Human Trends report, 86% of respondents said the need to improve learning and development was either important or very important to their business.
Organisations must work to instil an end-to-end cultural focus on learning, from the top of the organisation to its bottom, if they want to meet the talent challenges that lie ahead.Deloitte 2019 Global Human Trends
To do this, company leaders need to encourage an atmosphere of innovation and experimentation, where identifying, acquiring and implementing new skills is seen as routine, expected and supported from the top. This is less top-down learning, where businesses identify skills gaps and act to fill them, and more bottom-up innovation, where employees identify and obtain skills that will help them in their roles and careers.
Enabling self-led learning
This self-directed learning (SDL) is a fundamental shift away from its traditional mandated equivalent. The Deloitte report encourages businesses to make “learning more personal so that it is targeted to the individual and delivered at convenient times and modes so that people can learn on their own time.”
SDL empowers employees to choose the learning they need, the pathway they want, and the schedule that suits their work and life. This, of course, is good news for the company too: learners who self-define are happy to learn in their own time. Empowered employees are motivated to learn and emboldened to apply that learning in their work. They feel valued and trusted by employers.
- The right technology. SDL might involve employees identifying and attending short or one-off real world courses. But e-learning and virtual learning are likely to play a large role in any SDL strategy. The global e-learning market is expected to grow to $275 billion by 2022.
- A collaborative approach. Let employees work together, in pairs or small groups, to solve problems or reach a common learning goal. Collaborative learning has been shown to speed up knowledge transfer, strengthen team bonds and encourage critical and creative thinking. It allows companies to tap into hidden depths of employee knowledge. The Training Journal comments: “Many companies are finding that user-generated content is extremely beneficial for their L&D programs.”
- The autonomy to act. For SDL to become embedded, employees need to know that, within reason, managers trust them to make their own learning decisions. Prepaid credit card and expense management solution Soldo is one way to give employees fiscal autonomy while keeping control of company spending. Load a sum onto a virtual or real credit card, restrict it to L&D, and let employees spend freely up to that limit.
Our single biggest insight into success is that we believe people learn better together.Avado Learning at the Pace of Change report.
What can HR do?
SDL doesn’t take HR out of the picture. Quite the opposite. As SDL becomes embedded in company culture, it becomes a natural part of the HR process. HR identifies and either recommends or approves new training resources and methods. Given that people now rate the “opportunity to learn” as among their top reasons for taking a job, SDL becomes an integral part of recruitment literature, induction sessions and employee reviews. HR helps to set individual development goals that employees can work towards in their own way.
Who makes it happen – and how?
Who makes continual learning happen? Employees do, but business leaders and HR have to give them the freedom and encouragement to act, as well as ensuring the overall L&D strategy aligns to business goals.
- According to research by Avado, 84% of all decisions on HR and L&D budgets are made by the C-Suite. Senior managers need to move the dial on L&D from a traditional top-down strategy to modern, collaborative, employee-focused learning.
- Research has found that only 40% of companies say their learning strategy is aligned with business goals. Senior managers need to get involved early to ensure L&D meets wider business priorities. They must be publicly supportive of milestones, costs, dates and deliverables.
- To be successful, your employees need to be at the centre of your learning strategy. HR’s role is right here: identifying skills gaps. HR must work with line managers to find out where an employee’s skills are now; and where they might be at the end of a training journey. This is a labour-intensive task, which is why many organisations (perhaps unwisely) only prioritise high-performing staff.
- What do your employees want from L&D? Where do they think gaps in their own knowledge exist? Ask them through focus groups or questionnaires.
- Communication is key. HR must help communicate L&D goals to staff and show what it means for their personal development. According to LinkedIn, the ‘talent development’ function, where it even exists in an HR department, currently spends just 15% of its time promoting employee engagement with learning.
- Line managers have a crucial role to play at every stage, helping to identify skills gaps, assess staff competencies and communicating training opportunities and benefits. Line managers, often under-appreciated, are the evangelists for L&D on the ground.
The process: a mix of old and new
To deploy a modern, employee-focused L&D strategy:
- Identify your goals. As before, what do you want your L&D strategy to achieve? What are its short- and long-term aims?
- Assess needs. Find the gaps in your company’s skillset. What training will help achieve your goals?
- Assess staff. What kinds of learning would suit learning styles, seniority, competencies and personal goals?
- Grant freedom. Within the parameters set out by your goals, give staff control over their learning journeys.
- Allocate funds. Think about giving employees controlled access to funds to implement their own learning journeys, fostering trust and a sense of control. Soldo can help.
- Measure impact. Use short and long-term metrics – staff satisfaction, training take-up, retention, performance – to measure the success of your L&D strategy. Refine accordingly.
- Create a learning culture. Senior figures must encourage this process at every point. Turn ad-hoc training into a culture of continual learning and future-proof your business.
Learning and Development cheatsheet: the trends that matter
A well honed L&D strategy is a must-have for modern businesses. A revolution in the workplace is under way, making non-knowledge skills more valuable than anything we can look up on Google. At the same time, talented staff want lifelong opportunities to learn, and retaining them has never been more crucial.
With that in mind, here’s a summary of the five trends that really matter.
Within an overall strategy, your training must be engaging, flexible and – to some extent – controlled by your employees. Emphasise its career benefits, and give staff the freedom and funds to identify the training they need and the delivery that best suits their learning styles and schedules. Encourage collaboration and the sharing of skills.
Invest in technology (but don’t worship it)
E-learning is great. Virtual classrooms are cheaper than real ones. Self-paced, bitesize learning can succeed where long, classroom-based courses fail. Employees like good e-learning, which is why companies are spending more on online training. But giving employees access to a library of online courses and telling them to “get on with it” isn’t enough. Simple e-learning can be generic, passive and – worse – isolating.
The answer? Learning that is relevant, focused and supported. Interestingly, LinkedIn finds that, while 75% of talent developers use externally created training content, 85% use internally created content. Mix the best external resources with bespoke material created in-house. Use blended learning – a combination of the best e-learning courses and short, instructor-led refreshers. Keep an eye on developments in AI and VR that will give e-learning a new human touch.
Don’t forget soft skills
When everyone is obsessed with digital transformation, it can be easy to forget soft skills. Surveys often rank soft skills over hard when companies consider the skills they think employees need most. the top four often cited are leadership, communication, collaboration and time management. Employees want them too, as many of us will ride the technological wave by exploiting the human skills which AI is a very long way from mastering.
ROI and metrics
According to the LinkedIn survey, budgets are no longer a major constraint for L&D. The speed of technological change has convinced managers to part with their cash – but only if they can expect to see results. Align your L&D strategy with wider business goals and measure its impact on your employees and business performance. Showing ROI will help justify the creation of a learning culture in your company. Without ROI, training will continue as a top-down imposition of ad-hoc courses.
Soldo helps create a company-wide culture of development
Soldo is a sophisticated business expenses solution that empowers staff with controlled access to company money, while making expense capture and reporting easier than ever. Give staff control over their learning journeys and boost engagement and retention. Learn more at Soldo.com.