A culture of continuous learning and upskilling leads to higher retention rates and increased productivity. Let’s explore the transformative impact of upskilling on employee retention and workforce skills in the contemporary workplace.
In this episode of Hireside Chats, Sriram Rajagopal, Founder Diamondpick, chats with Nick Greif, the VP of Go-to-Market Strategy & Communications at InStride, about challenges faced by organizations in retaining talent, the evolving landscape of employee expectations, and the crucial role of continuous learning in fostering an engaged and loyal workforce.
- A recent study found that about 94% of employees would stay with their current employer if the company invested in their professional development. A strategic investment in the learning and development of an employee goes a long way in signaling a commitment towards their career progression
- According to Gallup, the cost of replacing an employee can range from one half to two times that employee’s annual salary, and this cost adds up.
- In certain environments and industries, 50% of the workforce voluntarily leave their jobs within the first two years, making this a huge challenge for employers.
- Upskilling strengthens the talent pipeline, and it’s simply because when you invest in your employees, they invest back in you, and that’s what’s going to create a really strong internal talent pipeline that helps.
- I think the commitment that an employee shows is directly proportional to the commitment that the organization shows in providing them with a very clear career path an investment that an investment commitment as well and an interest
- A Study by PWC reveals that 93 percent of the CEOs who introduce professional skill development see increased productivity and improvement in talent acquisition
Read the blog version of this engaging conversation, with plenty of insights on the role of continuous learning in fostering an engaged and loyal workforce. Or listen to the complete podcast here
Listen to the Podcast here
Sriram: A culture of continuous learning, and upskilling leads to higher retention rates and a more skilled workforce. This is what we hear from a lot of companies that we talk to. In today’s episode, we explore the power of upskilling and learning and the benefit it has on both employers and employees in modern workplace scenarios. To outpace competition companies require adaptable, skill hungry employees ready to embrace change and take on new challenges, especially with the likes of GPT 4, Copilot there’s a lot more changes in the nature of work that people would experience eventually. But with continued high employee turnover rates, evolving return to office policies, inflation and widening skills gap, organizations continue to face significant challenges with retaining skilled staff.
Employees, on the other hand, constantly seek to be valued and empowered in their roles, and leave if their expectations are not met. Today, they have more than one opportunity to do that. A recent study found that about 94% of employees would stay with their current employer if the company invested in their professional development. A strategic investment in the learning and development of an employee goes a long way in signaling a commitment towards their career progression. The result is a highly engaged and loyal workforce, significantly boosting long-term retention rates.
To talk to us in detail about the challenges faced by organizations in retaining staff beyond the two year mark, the benefits of upskilling for employers and employees, and investing in upskilling in internal environments, is Nick Greif VP Go To Market Strategy Communications at Instride, a leading innovative company specializing in strategic workforce education programs. Nick focuses on driving business and social impact by enabling employers to provide career boosting education to their employees through partnerships with high quality academic institutions.
Tell us a little bit about Instride for our audience. And about the retention challenge – Organizations across the globe continue to grapple with skill shortages and turnover risk for critical talent. What are the common challenges organizations face with high employee turnover and employee retention issues? And how does that high turnover impact organizational stability and productivity?
Nick: The company I work for Instride, this is a huge focus for us. It’s about reducing turnover, improving retention, improving employee engagement and building a strong internal talent pipeline and all of these are really meshed together. Turnover is incredibly costly. It’s incredibly damaging to organizations, everything from the high recruitment costs have to fill, that will fill those roles, new hire training for the knowledge loss that you face when you lose critical employees that know your business already, morale and engagement that drops, when you’ve got high turnover and people are constantly needing, new employees and they’re not feeling like they’re not getting to know their colleagues and of course workload redistribution.
When someone leaves, you’ve got to move that workload into somebody else. So, all of those are pretty significant challenges from turnover. And just on the cost front, according to Gallup, the cost of replacing an employee can range from one half to two times that employee’s annual salary. So, it adds up fast
Sriram: That’s a staggering number that two times the employee annual cost, but we do see, especially in certain environments and certain industries, 50 percent of the workforce voluntarily leave their jobs within the first two years, back when I was working in an organization, that’s the, especially younger early career talent it aspires a lot in this, always you know, need to meet their career aspirations. So this is a significant challenge for employees who invest heavily in human capital, right? So in your opinion what are the reasons why employees tend to leave organizations after a short tenure, especially less than two years is a short time.
Nick: Let’s assume that the basics have been met, right? The hiring manager is a decent boss. The role ends up being similar to what was advertised in the job description and work life balance at that company is reasonable, right? If those three things aren’t happening, that’s certainly a main driver of people you’ve seen leaving us in two years. Let’s assume those three have happened. Outside of those big red flags, the main reason that people leave their jobs within two years is due to a lack of investment in their career and insufficient growth prospects. So, you know, HR, the managers of that company haven’t put a lot of thought into career pathing, mentorship, workforce education. They haven’t put into place that kind of structure that’s going to help an individual grow their career within that organization. And at the end of the day, if you don’t see a future for yourself in five years and say, you know, we always get that common interview question. Where do you see yourself in five years? Where do you see yourself in 10 years? Well, the hope, of course, is that the interviewee, the candidate that’s going to join your company is going to say, I hope to be here. But if you as the company aren’t going to provide them the career ladder that’s going to help them understand, not just that they can move up, but how to get there, what are the skills they need? Are you going to help them get them? That’s what really gets someone to say, you know, I’m going to move to somewhere else where they’re going to invest in me in the same way that I’m investing in that company.
Sriram: That’s a fantastic point. I think the commitment that an employee shows is directly proportional to the commitment that the organization shows in providing them with a very clear career path, an investment that is an investment commitment as well and an interest in you know, telling them how they can grow. We found three of the five main reasons that drive people to pursue new jobs reflect their desire to grow and develop new skills. Offering professional development as an employee retention strategy can help maintain that competitive advantage. Like you said, right, that shows commitment from the organization’s perspective.
Can you tell us how continuous learning and upskilling contribute to a company’s competitive edge? How does it help overcome some of these retention challenges considering the fact that yes, I do get this additional commitment for learning, but I also need to have these opportunities to sort of demonstrate what I’ve learned? So what have you seen from your experience?
Nick: Yeah, you know, so we think this is critical to developing a competitive edge, right? I mean in most companies go back a hundred years and your main asset might have been actual resources, right? Natural resource companies. Maybe your main asset was physical property plants and equipment, right? Manufacturing heavy. We live in a knowledge world. Most of the Fortune 500 companies out there are largely based on their workers and what they’re able to output. And so, from a competitive advantage point of view, your people are your competitive advantage. And if you’re not able to hire, attract, retain top talent, you’re going to struggle in the marketplace, against your competitors. And so, what we see at Instride, what we do as a company is we work to design workforce education solutions for organizations to help those companies fund education for their employees, everything from high school completion all the way to master’s degrees, certificates, boot camps, bachelor’s degrees, everything in between one off skill courses, you name it, everything that might be valuable to an employee and their employer and help them promote those internally so that people actually, use that benefit, use that, that part of their HR offering. And what we see at those companies is that participants in those programs retain at a 90 plus percent rate compared to like an average of 60 to 65 percent. And so that’s a dramatic improvement and that’s just on retention.
So you’re going to see a 4x reduction in attrition, but we also see additional employee engagement, higher levels of promotions. And so throughout the organization, it really strengthens the talent pipeline, and it’s really simply because when you invest in your employees, they invest back in you, and that’s what’s going to create a really strong internal talent pipeline that helps.
Sriram: Can you share success stories of organizations that have effectively implemented upskilling programs for their employees? You mentioned a 4x improvement in retention, that’s a stunning benefit. Especially if you consider the fact that it’s going to cost you a lot more to replace. Having much lesser attrition or much higher retention improves the bottom line very clearly, it looks like, but what are the types of organizations that have benefited, you know, just give us a couple examples of what you’ve seen how companies benefit from such an activity and investment.
Nick: Yeah, definitely. You know, we’ve seen that across our client base, you know, so we work with over 40 large, you know, largely American companies. Everything from Amazon to LabCorp, Medtronic, to Pistin Group Intermountain Healthcare to Rochester Regional Healthcare. And so, within that group, I’ll highlight two:
- We actually do a set of learner videos where we highlight individual employees and some of our corporate partners. And the journeys that they’ve taken through education and how that’s helped them in their company. So, for example there’s a video I watched the other day about an employee at LabCorp who took advantage of LabCorp’s Advantage programme. Her name is Ashley. She’s a mother of two who’s feeling kind of stagnant in her career. Until LabCorp offered their education programme that meant that she could pursue education for free. And so she enrolled in an IT focused program, she graduated back in May of this year, and a few months later was promoted to an IT Business Analyst role at the company. So, just in that one nutshell, you know, the overall LabCorp program was incredibly successful, but that one story, that one vignette, kind of shows us that But that employee, that individual, they saw investment in them, they looked at the career education path where LabCorp was trying to fill critical roles, which, you know, IT, cyber security— those are high need and hard to fill roles. She took courses that helped her be eligible for that promotion within our company. That’s great for her, that’s great for her family, her paycheck. But the organization, LabCorp, not only retains her, but also is able to fill a high need role internally. So that’s, that’s I think a success story that really just kind of illustrates how this works at the granular level.
- And from a programmatic point of view, one of our leading healthcare systems, it’s been really innovative. They’ve seen 94% retention for their participants in the program. 100 percent so far of their registered nurses that have gone into bachelor’s of science and nursing programs to, to fulfill their bachelor’s degrees, 100 percent have retained, and 30 percent of their caregivers, their employees that have enrolled in their program have been promoted, which is a 2. 5X. higher rate than non-participants.
And so you can just see it within the programs and the more you can drive people to participate, the better the returns are going to be. But those are just two, two of our corporate partners and some of their successes. So, again, this is good data.
Sriram: A Study by PWC reveals that 93 percent of the CEOs who introduce professional skill development see increased productivity and improvement in talent acquisition especially it acts as a good EVP for you know, potentially employees that want to associate themselves with the company. When they see opportunities, internal opportunities like this, but from an individual point of view… from an employee’s perspective, are there any specific skills or upskilling programs that have shown greater impact on employee retention over others or it’s in general people do see it as an investment in them?
Nick: Yeah, this is a great question. So for employees, what they find drives like a higher level of attention is when, when your program designs, when we work with our corporate partners, you know, we, we really get into a consultative basis to say, here’s how you can design your program. Do you allow people to be eligible day one or not? How much tuition do you cover? What programs do you include? And what drives the best results by far are kind of two main things. One, when you’re really specific about what are the roles you’re trying to fill internally. So that LabCorp example I gave about, you know, the career education pathway that says, Hey, if you take these courses, you’re going to be eligible for these roles that are promotions at our company here’s how you get there. We see a lot of really strong retention benefits there. And then the second is when you get manager support. So the programs we see really do the best are ones where not only does executive leadership at the C suite level are really committed to the program, they believe in the results, you know, you just cited the PwC statistic, you know, that it really shows these programs are dramatically successful.
But also that when you at the manager level really work to equip and empower managers to encourage their employees, be supportive of their employees to do these programs. Because sometimes you’ll run into a manager who’s like, well, this person is taking education outside of their, you know, regular nine to five day job. Maybe they’re not quite as focused on their work, right? That, now, that’s a short sighted view. On the day, somebody who’s curious, somebody who’s learning is going to drive more value at work. But we run into that sometimes. So it’s always helpful to have that kind of manager training internals, managers also know that this really is a company priority and see the benefits of that as well as our employees.
Sriram: Coming back to the point that you just mentioned about, you know, registered nurses or home health aides who, you know we have very similar examples too where some of these organizations experience very high turnover because one they probably started minimum wage and minimum wage plus, this next bigger opportunity is something that they would look for in such high turnover environments, even in such high turnover environments, have you seen the investment in learning succeed as a tool to retain, to upskill because, you know that’s what the individual is worried about today, right? So how do I get to a better position or pay? Have you seen it work in such environments as well?
Nick: Yeah, absolutely. I would actually argue that that’s some of the best environments where it works the best. You know, the turnover we talked about at the start is incredibly costly, right? Well, you know, 50 percent to 200 percent of that person’s annual pay is what it’s going to cost you to replace that worker. And so in a high turnover business, retail, for example, which is, you know, fairly high turnover that cost is astronomical. So anything you can do as a business to reduce that is going to have dramatic impacts to your bottom line. And more importantly, I would argue, you know, it’s going to have impacts on customer service, right? If you have a high turnover business, how can you possibly offer really strong customer service to your customers when your employees are changing every three to six months just by the time they figure out how to do your business well, they’ve left you, right?
That’s not a good situation to be in. So what we see, and actually if you look at like the main retailers in the U S at least Amazon, Walmart, Target, Starbucks, and so many others, you know, all of these organizations have actually led the way in creating robust employee workforce development, workforce education programs because they see that this is such a beneficial way to try help their employees attain their education journeys, be good to their employees, but also to create strong customer service and strong results for their business.
Sriram: So in those same organizations, or even the organizations that have, you know, stable environments, do companies tailor their policies, progression norms to accommodate people that have taken the time to invest in themselves? Obviously supported by the organization, but, you know, to be in the mix for new roles that come up. So do organizations have to tweak their entire strategy around growth and development and new talent acquisition in light of this investment?
Nick: Yeah, I mean, I think they should, right? They don’t necessarily have to, but I think it’s beneficial if they do it right. What you hope is that, you know, when you’re looking at a retail business where you’re going to have a ton of frontline workers and only so many people in management or executive roles, you’re, you’re always going to have people leave at some point, right? It’s a very narrow pyramid or I should say, a very flat pyramid. It’s only so far you can go up the ladder, you know, easily. And so, there’s a limit to where you can say, okay, every single person who goes through an education program is going to be able to get promoted through our company.
But that’s okay. If that person still stays two years longer in a frontline role, they’re still driving significant value to your organization’s ROI, and at the end of that time where they say, Hey, I’m going to move on to another role. Now they get to move on to a role that’s going to be a considerably higher knowledge output role that’s going to create more value for them and their families. So as an employer, you’re doing right by them while also getting those retention benefits, those customer service benefits. And so what you do want to do, though, is look and say, okay, how many of these individuals can I promote into roles internally? Branch managers, store managers, whatever that is, and make sure that you are finding those, those diamonds in your team and not losing them, right? And so I think that’s where, you know, definitely thinking about career pathing, designing those deliberately, creating leadership and retail specific or whatever sector that also has high turnover and, and finding a way that managers know, hey, I want you to tap the people in these programs that you really think are high potential so we can develop them.
And then you can link your workforce education program, you know, which is something that Instride specializes in— you can also link those with your career development programs internally. You can link those individuals to mentorship opportunities, and there’s so many other ways that you can make sure that those people progress within your company, and that you don’t, not only don’t lose them, but you actually push them into the powerful and impactful roles that you want them to be in as they grow internally.
Sriram: In a nutshell, then, to summarize, to upskill or not to upskill is not the question anymore. It’s just about where do you want to start if you don’t have one already. What kind of baby steps you want to make, or you want to make any major strides. And that’s really it. So there is clear value in making that investment in employee development which also shows the organization’s commitment towards employee growth and professional development. It does obviously improve retention significantly.
I have a few rapid-fire questions, if you will, before we conclude.
What do you think is the biggest retention challenge today that organizations face?
Nick: I’d say it’s the lack of career path planning – not planning for where people go internally in your company.
A must-have in a learning culture.
Nick: I’d say critical thinking! It’s the one thing that AI is not going to be able to figure out better than we can.
Top must-have skills for modern employees.
Nick: Ooh I’d say a genuine interest in being proven wrong. You know, the best way to learn is curiosity!
A quick tip for companies looking to enhance employee adaptability.
Nick: I couldn’t stress this enough— provide opportunities for your employees to learn new things. And you can do that through their day jobs, but you can also do that through workforce education and creating programs where they can learn through you, you know, outside of work itself.
A quick tip for employees looking to upskill their way to success.
Nick: It’s kind of the flip side of what I just, you know, recommended to employers, seek out new challenges at work. Even if that means taking on an extra assignment to do it, you’ve got to always find new ways to learn and build your skill set.