Closing the Skills Gap
The age old problem of finding a way of putting a square peg in a round hole has taken a new turn. With funding now available from Leeds Enterprise Partnership (Leeds LEP), retraining your staff need not be a prohibitively expensive option. That square peg need not stay that way forever.
In an attempt to make the businesses and workforces of the wider Leeds region that bit more competitive on a global stage, Leeds LEP has made grants of between £500 – £50,000 available for eligible businesses to support up to 50% of funding for training costs.
With 92% of business identifying a skills shortage among their workforce in at least one key area*, this is obviously a timely opportunity.
Indeed, 80% of businesses surveyed* have plans to invest in training, so it seems like the time is right to discuss why training your existing team could bear fruit over the hiring of new team members to bridge a skills gap.
Why retrain rather than hire?
The benefits of investing in an employee’s future are many. Provided the employee is open to the potential change of job role it can be an excellent way to generate an indelible bond between your business and the employee. By investing in their skills you show that you trust them, and that you want them to be part of the exciting future for your business. This connection, through ongoing investment and management can lead to employees becoming huge assets to an organisation. Many organisations build these relationships right from the word go, with graduate recruitment straight from university into the corporate world a great example. When an employer gets it right new employees are absorbed into teams where their skill sets evolve over time to ensure that there is never a skills gap within the team or organisation.
Newly skilled employees being lost to other businesses
Of course, investing in training can be an expensive and time-consuming exercise. Many organisations we talk to are worried that the investment in training could be lost as their newly skilled-up employees start to look elsewhere for work with their newly enhanced CV. We have heard of ‘Retention Agreements’ being put in place to control the flow of departing employees. Such legally binding documents could be seen as a little heavy handed, but they do provide employers with a guarantee that if an individual should leave within 1 year of the training they will be required to reimburse the company the cost of the training. Of course, it is the responsibility of the organisation to ensure that their talent doesn’t want to go elsewhere – further benefits and rewards beyond the training should be enough to stop this churn of people through the business.
Can we preempt a gap in skills within our business?
As any good business owner will tell you, with a decent forward looking plan, a business should be prepared to tackle most obstacles that stand in the way of growth. This is the same for training. If you have a 5 year plan for your business, which perhaps involves movement into new markets or a target to significantly increase your turnover, then you will need a team that can cope and adapt accordingly. Looking for the best performing team members and encouraging them to future-learn skills that will help get your business plan across the line is a very positive use of your existing team. Taking them with you on your journey towards success is a sure-fire way to get them fully involved and committed.
It’s also worth a mention that if you have one employee who carries a lot of responsibility on their shoulders then it might be worth getting them to share that burden with other employees. This lessens the risk of a potential skills gap if that employee leaves or is sick.
Does it cost more to hire than retrain?
This question is a little difficult to answer with an actual number. Our gut feeling at Business Doctors is that yes, it does cost more to hire, but we are happy to be proved wrong (leave your comments below if you have an opinion on this). Costs of removing unsuitable staff with long service can be substantial, though this is often balanced out by costs of recruitment and training, which can often take months or even years, so the cost / benefit analysis will vary in each case.
Can an organisation close the skills gap with retraining rather than hiring? The answer is almost always yes. Whilst there will always be a natural flow of arrivals and departures within a business we believe that with careful planning a skills gap need not be a critical issue, but instead can become a valuable opportunity to engender a sense of belonging amongst your team.
Taking advantage of opportunities to partially fund training within your organisation using money available through Leeds LEP could see your business thrive. For more information visit the website Leeds LEP website – http://www.the-lep.com
Simon Monaghan, Business Doctors for Leeds and North Yorkshire, will be presenting his thoughts on retraining and employee performance as part of our Business Growth Masterclass in central Leeds on 11th May 2016. For more information on this free event click here – http://businessdoctors.co.uk/event/552/business-growth-masterclass
* BCC Workforce Survey 2014: “Firms investing to counter persistent skills shortages”
The Institute of Chartered Accountants in England & Wales (ICAEW) publish a quarterly UK Business Confidence Monitor and Q4 2019...
Find Your Purpose Your Core Purpose should come from a mix of what you love, what you are good at,...
Three resolutions that you can make to improve your business in the New Year by Planning, Formalising, and Reviewing all...