Training is an investment, not a cost
Wednesday, February 20, 2019
The race to attract skilled labor is on. Productivity may be slowing but it is still moving in a positive direction, and new unemployment applications are still declining. And according to a recent analysis by The Economist, American manufacturing, particularly among "agile smaller firms using advanced techniques" may be expanding.
While this tight labor market may look different than the one before the recession, one thing is consistent: the most challenging staffing shortage is in skilled labor. Because of this, organizations across industries must recognize that training is an investment, not a cost.
Retain, then recruit
A bank teller of 20 years may know everything about her current position, yet there will still be some things she will need to learn the day she becomes a teller manager. A new teller with cashier experience may understand the basics of her new role, yet she will still need training.
While it may seem easy to agree that both employees need support getting up to speed, what it is not easy for leaders to agree on is how much support the organization should give them.
While we know it is less expensive to retain than to hire, we are often unwilling to commit what it takes to grow our own talent. From the most basic feedback and performance evaluation systems, to conference stipends, professional development opportunities and career pathways, few organizations create systems that clearly align employee development with long-term organization strategy.
Instead, money, time and energy are spent finding the perfect external candidate to address a current need.
HR’s role in addressing labor shortages
In addition to the administrative and tactical tasks associated with training, HR can play an important strategic role in this employee development cycle. For example, by understanding the landscape of advanced manufacturing, including the politics and logistics of international manufacturing; and the advances in technology supporting the growth of small firms; HR can lead the development of short- and long-term staffing plans that incorporate shifts in the relevant landscape in support of long-term organization objectives.
Specifically, HR can maximize recruiting efforts for candidates that are newly trained or have transferable skills. HR can also improve retention (and thus reduce costs) by optimizing current staff, establishing career paths and training pipelines, and working with managers to shore up internal systems that support the growth of good employees.
Without strategic HR, this work falls to the lead operator within the organization. In such cases, HR should still be involved to the extent possible. The idea is that both operations experts and HR professionals should align their goals of efficient operations and productive human resources to make the business case for training and retention. By clearly articulating the impact staffing has on organization strategy and illustrating the delta between current employees and future needs, leaders can appropriately budget and manage for addressing the gaps.
The bottom line is, proactively addressing skilled labor shortages by mining current talent, training schools and candidates with potential (instead of only perfect candidates) are short-term investments that can measurably and positively impact long-term organization objectives while hedging against current and future staffing challenges.
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