Companies committed to building workforces equipped for the future apply seven key principles to training and development.
Organizations are struggling to keep pace with the new skills needed in their workforces, thanks to large-scale trends such as the shift to digital business models and the increased adoption of workplace automation, AI, and advanced analytics. The pandemic accelerated those trends, putting an increased premium on learning and development (L&D) as a means of equipping companies to handle both long-term challenges and short-term crises.
To understand the implications of these changes, we recently engaged in more than 60 in-depth conversations with CEOs, chief human resources officers, chief learning officers, chief operating officers, and other senior HR and business leaders across six countries. We supplemented that research through surveys of more than 250 professionals worldwide about their approaches to L&D. The results show that relatively few organizations had strong L&D programs in place before the pandemic.
Those companies offer a model of how learning and development makes companies more responsive and agile. In studying their practices, we identified seven core principles that other companies can implement to improve their L&D efforts and equip themselves to thrive in both the short and long terms.
The Case for Investments in L&D
We conducted our quantitative survey in 2019 and found that few organizations had a strategic, forward-looking approach to L&D. Only 4 in 10 respondents to our survey identified preparing for the future as a high or top priority for their organization, and only 30% of respondents were confident in their ability to meet future skill needs.
Before COVID-19, technology was already changing employee and customer behaviors in dramatic ways, but the pace has now increased. Consultancy Global Workplace Analytics expects that an estimated 25% to 30% of the labor force will be working from home multiple days a week by the end of 2021.1 There is evidence of a growing performance gap between companies with digitally enabled, agile business models and those with traditional, legacy business models.2
We gained a unique perspective based on the timing of our research, given that we began interviewing company leaders before the pandemic and continued to speak with them throughout the crisis. We found that companies that had a strong, long-term L&D orientation going into the pandemic were well equipped to handle the short-term pressures that it created and to adapt quickly to new ways of working. Our findings are consistent with prior research showing that organizations that were already in the lead in terms of L&D before a crisis are better positioned for the post-crisis rebound. For example, research on previous global recessions shows the value of investment in L&D in equipping businesses for the subsequent recovery.3
There is a clear case for making investments now to build for the future. Some organizations are already making changes. According to a recent LinkedIn Learning report reflecting the impact of the COVID-19 pandemic, L&D professionals reported a 159% increase in the extent to which their CEOs were championing learning and development in their organizations, while 64% reported that reskilling the workforce was more of a priority than ever before.4 The imperative is to make sure that those investments yield results, building the skills and capabilities needed to take advantage of technologies such as big data and AI, and adjust to changes in work due to automation and on-demand contingent labor.
The digitalization of business processes and models and the attendant implications for how and where people work, and how customers engage with organizations, emerged as key areas of focus in our research. We identified seven key insights from the organizations that have been most successful in developing and implementing strong L&D programs.
1. Identify a North Star to guide L&D decisions. Organizations that were best prepared to respond to the changing world of work are guided by what we call a North Star — an overarching objective that informs decisions about employee skills and development.
Consider global pharmaceutical company Novartis, which set a North Star of evolving into a data-driven business in order to reimagine medicine and improve patients’ lives. To support that mission, Novartis identified five strategic priorities and built the underlying L&D components to support each of them. The initiative is backed by an investment of $100 million in learning and development over a five-year period, with an aim for all employees to spend 5% of their time learning. It includes partnerships with learning platforms such as Skillsoft, GetAbstract, Coursera, and LinkedIn.
For example, benchmark data from Coursera aided the L&D team in identifying a need for enhanced data visualization skills, in line with its strategic priority of data and digitalization. The team took a range of actions to build these skills and close the gap, tracking performance on a quarterly basis. Within two years of the program’s launch, Novartis surpassed the industry benchmark for data visualization skills.
In the U.S., Dell has repositioned itself from a traditional technology hardware company to a cloud-based infrastructure provider, with the ambition of enabling digital transformation for its customers. This is the organization’s North Star, and it has guided Dell to rethink the skills base of the organization. Dell developed a new career framework with 23 core skills, as well as a set of leadership principles to deliver on that ambition. Those core skills in turn inform the L&D strategy in terms of program design and content curation.
2. Establish a skills baseline. The second key insight is the importance of conducting an inventory of the current skills and capabilities of your workforce. Among the companies we studied, inventories such as these were seen as crucial in understanding current capabilities, identifying skills gaps more quickly, and taking action to fill any deficits.
For example, a European technology company launched a nine-month project to assess both the supply and demand of strategic skills that it would need in the future. The project, executed through IBM’s Kenexa Talent Frameworks, resulted in the company taking an inventory of skills across the organization and mapping them to job profiles as it worked to define and audit individual skills and roles. The skills inventory also provided a way to think about the key responsibilities, job levels, and core competencies of these roles.
The analysis highlighted that the company was hiring overqualified candidates for some roles. This resulted in annual labor costs that were roughly 1 million euros (about $1.2 million) higher than necessary to acquire skills that were not being deployed. The analysis also identified a number of new skill sets already in the organization that were likely to prove valuable in the future, and resulted in a renewed focus on internal development over external hiring.
We recognize that in larger organizations, completing such skills audits across so many roles, business units, and geographies can be a challenge, particularly when the pace of change is so rapid. Our research found that companies often succeed by breaking the process down into more manageable chunks, such as pilot exercises or skills inventories conducted at the level of business units or geographic regions. Regardless of the ultimate scope of the project, organizations should not think of these as “one and done” processes. Rather, the audits must be repeated to account for changes in the business landscape and within the organization itself.
3. Align L&D efforts with strategic priorities. We identified relatively few organizations that were systematically planning for the skills they would need in the future. The areas of AI and automation are good examples. Our findings show that those technologies were regularly overlooked by L&D teams prior to the crisis (likely due to significant pressure to deliver on short-term priorities, combined with a lack of resources), despite their visibility and clear business value. Many organizations continue to build L&D plans that overemphasize skills that were important in the past.
In contrast, leading organizations look forward and assess their strategic priorities, skills needed to execute on those priorities, and the future
impact on their workforces. For example, in 2019 a European insurance company projected changes in jobs due to the impact of technology and other factors over the next five to 10 years. It estimated that 15% of the company’s jobs were likely to be eliminated by technology and an additional 50% would be augmented by technology in that period. This analysis provided a road map as the company planned for the reskilling and redeployment of workers. Some of these measures overlapped with more urgent ones needed to respond to the pandemic; for example, the company was forced to accelerate its shift to digital processes in areas such as claims handling. The project provided a clear template for the development of digital and analytical skills by identifying the areas with the most opportunity for redeployment and where reskilling would add the most value.
Similarly, at professional services firm PwC, a team composed of business heads and led by the global human capital leader was tasked with ensuring that the organization had the capabilities to match its growth ambitions. A key initiative launched in 2019, supported by a $3 billion investment, focused on digital upskilling. All 276,000 employees worldwide underwent a two-day digital training session, and PwC offered new incentives to digitalize processes and improve performance across the organization. So far, millions of work hours have been saved through process improvements and innovations across the organization. In one example, an audit process that formerly took two weeks to complete is now automated and takes just 12 minutes. PwC’s digitalization journey was particularly valuable in the shift to virtual working in response to COVID-19.5
4. Ensure that the L&D team has the right skills and resources. The capabilities that L&D professionals need are quickly evolving alongside those of the overall workforce. We found an increased demand for digital and analytical skills among L&D teams, particularly regarding digital learning, virtual facilitation, and the curation of online content. We also saw increased expectations of L&D professionals in terms of their knowledge of the business and strategy, as well as the coaching and consulting skills required to fully engage with and deliver strategic value for the business.
At a U.K. bank, these demands have resulted in an L&D team that is smaller than in the past but more skilled and delivering a higher level of value for the business. As a more credible partner to the business, the team is now equipped to have more challenging conversations with organizational leaders to ensure that content offerings and even delivery modes match business needs and expectations. The team has also helped challenge outdated views on learning needs and has instead focused L&D investments on the future. Data analytics and visualization capabilities within the team, combined with deep knowledge of the business, have played a key role on this journey. In a recent regrading exercise, all members of the team had their job grades increased one level to reflect their increased contributions.
Technology also plays an increasingly important role as a platform for enabling L&D to support a company’s organizational strategy. In some cases, technology can create efficiencies and free up people for value-creating work. At ICON, an Irish global health care organization, we saw the deployment of a digital bot to schedule training in 2019. This bot freed up capacity equivalent to a full-time employee on the team, enabling that person to focus on more important tasks. Other companies have invested in technology to upgrade learning management systems, equipping L&D teams to deliver learning both during and after the crisis.
Not only did these organizations have the capabilities required for enabling digital learning and targeted curation of online content, but they also demonstrated a deep understanding of the challenges and opportunities of virtual learning design and facilitation.
5. Design learning to accommodate evolving conditions. Many organizations’ L&D budgets have been cut or frozen in response to current economic conditions. Additionally, most face-to-face training has been halted, at least in the short term. However, this offers the opportunity to shift from formal, event-based training that is separate from work to learning that happens in a more organic fashion throughout an employee’s workday, often termed learning in the flow of work.6 By blending technology, strategic partnerships, and internal processes, top-performing companies create learning that is “just in time, just enough, and just for me.”7 These opportunities might include short video clips on YouTube or active discussions on collaboration platforms such as Slack, Zoom, Facebook Workplace, or Microsoft Teams.
In fact, the shift to learning in the flow of work can offer real advantages in terms of employee engagement. Research by The Conference Board shows a strong preference among employees for working on tasks that require them to learn new things.8 In our own research, we also found that employee attitudes about learning are evolving, with an increased appreciation for virtual delivery. In the past, online learning was often viewed as a second-rate option, but for many employees, it is now the primary way to access training. For example, polling and analytics company Gallup reported that its employees appreciated a more individualized focus on their needs, combined with greater connection and intimacy enabled by virtual L&D.9
A number of organizations where we conducted interviews cited the value of global collaboration via virtual channels. Although programs may have been delivered onsite locally or regionally in the past, the shift to virtual operations means that participants from across the globe are more likely to be part of a single cohort. This has led to increased knowledge sharing across geographies.
Internal opportunity marketplaces, which match organizational needs with employee capabilities, are also increasingly prevalent.10 A Dell initiative connects people to work opportunities inside the company that are not full-time jobs and focuses on the skills that the future will demand. The internal talent marketplace is akin to crowdsourcing for skills — individuals bid to work on projects where their skills would fill a need on the project team. These projects are viewed as a means of developing individual capabilities while also building one’s social capital within the organization.
A number of our respondents pointed to the increasing emphasis on the 70:20:10 model of development. Under this model, development through on-the-job experiences should account for 70% of learning, while 20% comes from feedback and coaching and only 10% from more formal instruction.11 As one chief learning officer noted, the COVID-19 crisis served as a proof of concept for the 70:20:10 model because the organization was essentially forced to emphasize learning in the flow of work.
6. Create individualized learning pathways. Companies are also seeing an accelerated trend toward individualized learning pathways, reflecting the wider range of priorities and responsibilities among individual employees as their roles have evolved in response to the crisis. This also reflects a shift away from standardized learning pathways, which typically assume a standard baseline level of ability as people enter an organization and follow standard career paths.
As the head of L&D in a European banking organization told us, “We’re in this age where people just want the stuff that they need. They just want it really efficiently. ‘What can I do just to get this information, get it done, and move on?’” Notably, L&D platform LinkedIn Learning reported a threefold increase in its site traffic over the course of the pandemic through late 2020.12
A key challenge for L&D teams lies in helping employees understand which skills they need and how to access relevant content. As part of its digitalization strategy, PwC developed an app that allows employees to assess their current level of “digital fitness” and identifies resources to help them improve their scores. (The app is now available to the public for free.) In other organizations, technology has also played a key role, with LinkedIn Learning and YouTube also providing bite-size content focused on immediate needs.
7. Stay agile and adapt over time. The disruptions caused by the pandemic have shown companies how rapidly the priorities and requirements of L&D functions can change. This volatility challenges L&D teams to be responsive and agile. Rather than seeking perfection in program offerings, nimble L&D teams think in terms of getting a minimal viable product into the hands of users, testing the program, learning from experience, and making iterative changes and upgrades over time.
During the first few months of the pandemic, the initial requirement for L&D teams was to support employees working at home. However, priorities quickly shifted to a focus on well-being and mental health, and then to helping teams collaborate in new ways through virtual channels. This is a major shift from traditional L&D frameworks, which were often quite rigid. Yet the L&D teams that responded effectively recognized the importance of reevaluating decisions and priorities as new data became available.
A recurring theme among our recent discussions with organizational leaders was how the L&D team maintained its credibility by being responsive to the needs of the business during the crisis. We also had a small number of organizations report that adopting agile methodologies in their HR and L&D teams has aided their ability to adapt quickly in response to changing business needs. These examples point to the importance of continually assessing the effectiveness of L&D interventions and adapting to meet individual and organizational needs.
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We also observed a number of instances in which organizational frameworks were too slow to respond to the pace of change during the pandemic, and L&D teams had to innovate to ensure responsive delivery. In one global organization, the signoff requirements for the centrally managed learning management system were slowing down content development. To move faster, some national units in that organization developed content locally and delivered it via Facebook Workplace.
Amid competing priorities, L&D may appear to be an issue that is secondary to more urgent challenges. However, L&D is itself the means by which companies equip themselves to take on those challenges, in particular by ensuring that their workforces have the skills to implement and adopt technologies that enhance competitiveness and productivity. As our research shows, that requires investing in learning and development with a long-term perspective and a strategic orientation, and being prepared to adapt over time.https://7d2e8d5f0842fa5843c841a5cef08fdf.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
ABOUT THE AUTHORS
David G. Collings (@collingsdg) is a professor of human resource management at Dublin City University Business School. John McMackin is an assistant professor in human resource management and organizational behavior at Dublin City University Business School.
3. Y. Kim and R.E. Ployhart, “The Effects of Staffing and Training on Firm Productivity and Profit Growth Before, During, and After the Great Recession,” Journal of Applied Psychology 99, no. 3 (May 2014): 361-389.
4. “Leading With Learning: Insights and Advice on the New State of L&D,” PDF file (Carpinteria, California: LinkedIn Learning, 2020), https://learning.linkedin.com.
7. K. Peters, “m-Learning: Positioning Educators for a Mobile, Connected Future,” International Review of Research in Open and Distance Learning 8, no. 2 (June 2007): 1-17.
8. R.L. Ray, P. Hyland, A. Pressman, et al., “DNA of Engagement: How Organizations Can Foster Employee Ownership of Engagement,” PDF file (New York: The Conference Board, 2017), http://www.conference-board.org.
9. V. Ratanjee, “Four Ways to Continue Employee Development When Budgets Are Cut,” Gallup, Aug. 3, 2020, http://www.gallup.com.
10. M. Schrage, J. Schwartz, D. Kiron, et al., “Opportunity Marketplaces: Aligning Workforce Investment and Value Creation in the Digital Enterprise,” MIT Sloan Management Review, April 28, 2020, https://sloanreview.mit.edu.
11. M. Lombardo and R.W. Eichinger, “The Career Architect Development Planner” (Minneapolis: Lominger, 1996).
12. T. Vander Ark, “Pandemic Spike in AI Learning — and What It Means for Schools,” Forbes, May 7, 2020, http://www.forbes.com.