In 2022, the tech industry faced a major setback as companies worldwide laid off 35,000 employees in an effort to cut costs and preserve existing resources.
This led to a shift in the job market as companies re-evaluated their current workforce and business operations to adapt to the new market conditions.
Companies are facing challenges in identifying and developing the skills they need in their workforce. A major challenge is that many college graduates and entry-level employees lack the necessary skills and experience to be job ready.
There is also a shortage of talent with in-demand skills, such as data analytics and programming, making it difficult for companies to fill critical positions.
This has resulted in a skills gap of 28.5% in cloud talent, 33% in top network engineering/operations roles, and so on.
Reskilling is emerging as a key strategy for companies to avoid layoffs and save money on new hires.
In addition to reskilling, data-driven talent retention strategies and rethinking the employee experience will play a critical role in talent management in 2023.
Strategies to Avoid the Bitter Pill of Layoffs
Talent shortage is expected to cost the global economy over $8.5 trillion in lost GDP by 2030.
Many companies rely on consultants and independent contractors to address their talent shortages. These strategies may be helpful in the short run but not when permanent in-house expertise is required.
Evaluate Recruitment and Retention Strategies
Companies need to review their recruitment and retention strategies to ensure they are doing everything in their power to find and retain top talent.
While high salaries are always tempting, the right incentives do not always have to be expensive. 65% of employees prefer non-monetary incentives such as recognition programs over cash bonuses.
Talent management teams can focus on the following benefits that both new and current workers seek in a company:
- Wellness/health programs
- Subsidies for training and education
- Innovative compensation strategies to reward exceptional performers
Additional time off, flexible work schedules, development opportunities, and other non-monetary incentives can be equally valuable to employees.
By offering a combination of competitive salaries and attractive incentives, companies can attract and retain top talent without spending a lot of money.
Use of Cloud-based AI Solutions
Replacing an employee costs 30-50% of their annual salary, 150% for mid-level employees, and 400% for high-level employees.
Retaining talent is a struggle for companies with employees from different cultures, educational backgrounds, and personalities.
To solve this problem, companies are working with AI to develop retention strategies and predict who is most likely to quit and what incentives might encourage them to stay.
AI can improve talent retention by objectively evaluating candidates, providing opportunities for advancement, and focusing on the employee experience.
By using Artificial Intelligence to track changes in employee behavior and understand feedback, managers can take smart action to drive employee engagement and keep them on board.
According to a report by the World Economic Forum, 85 Mn jobs will be displaced by automation by 2025, but 97 Mn new jobs will be created. Reskilling is crucial in ensuring individuals have the skills to fill these new roles.
Reskilling and retraining programs can also increase productivity by 15-25%. When employees feel they have the skills and knowledge to succeed in their roles, they are more likely to be engaged and satisfied.
It can also help companies retain top talent by providing career advancement and growth opportunities.
Reskilling programs can take many forms, including:
1. Online learning platforms:
- According to a survey by UpGrad, around 90% of employees prefer online learning.
- It is convenient and flexible, allowing employees to learn at their own pace and schedule.
- A wide range of courses, tutorials, and certifications are available.
2. In-person training:
- In-person training offers face-to-face interactions and hands-on learning.
- It can be beneficial for specific skills and industries.
- Employers consider it the most effective form of learning.
3. On-the-job training:
- It allows employees to apply their new skills in real-world situations immediately.
- This form of training is highly effective for retention and improvement.
Other forms of reskilling include virtual instructor-led training, gamification, coaching and mentoring, and self-directed learning.
All these programs can be used in conjunction with one another to create an effective reskilling plan that meets the needs of the employees and the organization.
Draup’s Talent Intelligence platform recognizes the value of reskilling and upskilling. The AI-powered tool allows talent acquisition teams to make staff training programs ongoing and unavoidable.
Draup’s Reskilling Navigator can assess and address employees’ reskilling potential based on knowledge, soft skills, personality traits, etc.