Time For A New Employer-Employee Contract
Now that Congress has passed tax reform legislation, companies are enjoying a lower tax rate and hanging on to more of their profits. There’s a strong case to be made that this is the time to reverse the decline in worker investment, specifically when it comes to upskilling and reskilling.
The pace of today’s workplace transformation is magnitudes faster than what happened during the Industrial Revolution, and the half-life of technical skills keeps shrinking, making it a constant challenge for companies to keep up.
Failing to invest in talent is a short-sighted strategy, and it’s troubling that, as technology and automation gain ground, fewer corporate leaders believe people are their greatest asset. This attitude is especially hard to square at a time of historically low unemployment and a growing gap between the skills employers say they need and the ones job candidates have. We’re still going to need skilled humans working alongside automation for a while.
Companies can’t confidently plan for their futures if there’s doubt whether they’ll have people with the skills they need to get there. On the flip side, people whose employers demonstrate commitment to their career growth and development are happier, more engaged, and more productive. Everyone comes out a winner.
Challenges of workplace transformation
Sure, there’s the meme you might’ve seen making the rounds of your social feed, where the CFO asks the CEO what happens if they invest in people who then leave, to which the CEO responds, “what if we don’t invest in them and they stay?”
That’s an oversimplification of a real debate. Helping employees gain skills and providing career development often take a back seat to business priorities more directly tied to revenue, but workplace learning has never been more critical than it is right now.
As automation, artificial intelligence, and other technologies continue to force changes in job functions, companies have a choice: they can recruit and hire qualified candidates as the need for new skills arises or they can continuously upskill their current employees. It’s time-consuming and expensive to hunt for candidates with specific skill sets, and the competition for qualified applicants is fierce. Plus, there are costs associated with onboarding and the productivity lag as a new hire can take as long as 90 days to be fully performing in their role.
It just makes sense for companies to invest in upskilling the people they already have, but they won’t get the desired results if learning only happens in reactive mode. Learning can’t be an interruption that takes employees away from their work for chunks of time; it needs to be woven into a culture where every worker has access to in-the-moment learning and where leaders reward people who aren’t afraid to try new things or admit what they need to learn.
Learning as strategic investment
A learning culture doesn’t happen by magic. It takes deliberate and thoughtful action and investment to create the conditions where learning becomes a strategic asset.
When learning is elevated to the strategic level, it can drive business ahead and deliver a competitive edge. For example, when employees are continuously maintaining and growing their skill sets and even pursuing cross-functional training, it’s a lot easier to move talent around where it’s needed. Keeping paths open for people to move between teams and functions accomplishes two bottom-line-boosting measures at once: retaining the institutional knowledge of longtime employees while leveraging their expertise to generate fresh, innovative ideas in different areas.
Learning-driven organizations tend to be more efficient, create more customer value and market leadership, and report higher customer satisfaction too, according to Bersin & Associates’ “High-Impact Learning Culture” report. They can move faster and experiment more.
Besides, workers genuinely want access to learning opportunities—and they’re willing to leave for new employment when they don’t get it. This is especially true among the newest entrants to the workforce, millennials and Gen Z, i.e., the people you should be grooming for management roles.
Employees share responsibility
Offering learning and development opportunities isn’t like other employee benefits. Unlike medical coverage or unlimited PTO, continuous learning asks employees to be active participants in order to receive the benefit. For my company’s 2017 Skills Gap Report, 40% of employee respondents said changing skills requirements will have the biggest impact on their jobs over the next five years, and most indicated that corporations and government should cover the cost of retraining.
This still leaves individuals themselves on the hook to step up and take full advantage of the L&D programs on offer. No longer can people assume their learning days are behind them once they’ve completed their formal education. On the contrary, new job functions and skills are popping up every day, and many were never taught in a college classroom. To sustain a thriving career, workers in all fields and at all levels will need to become adaptable, lifelong learners.
Investing in a learning culture
It doesn’t matter what industry you’re in; your company’s future success depends upon its ability to harness the power of emerging technologies like artificial intelligence and data science. To do that, you’ll need humans with the technical know-how for designing, deploying and maintaining these systems as well as the soft skills for doing what machines can’t.
Organizations and individuals alike face this uncertain future, but they can also help each other reach their goals. Companies are ideally positioned to bridge the skills gap by investing in learning resources and programs that will keep employees’ skill sets relevant. Individuals need to embrace the fact that they’ll have to keep learning new skills throughout their careers in order to deliver ongoing value to their employers.
Since the passing of tax reform, it’s been estimated that 60% of gains are going to shareholders and only 15% to employees. Moreover, when companies are giving employees a piece of the pie, it’s often coming as one-time bonuses, not permanent raises in salary. It hasn’t always been this way. As author Rick Wartzman explains in The End of Loyalty: The Rise and Fall of Good Jobs in America, there was a time when companies felt an almost paternalistic obligation to take care of their employees with decent wages, job security, and good benefits.
We’re not suggesting turning back the clock to those days, but we are raising a call to action for a new social contract between companies and their employees. Disney is just one company that is using tax-reform savings to invest in employee education. Let’s encourage more forward-thinking organizations to make the first move by investing in employee education to usher in a new era where we can realize the opportunities of these changing times, together.
This article originally appeared on Forbes.com.