Unlocking long-term organisational performance; The benefits of upskilling

13.05.2023 10:30

By Neeti Sharma

Traditionally , learning and development had been considered a cost center and a low-yield investment. However, in recent years, India Inc. has witnessed a significant shift in mindset, where organizations have begun to realize the need for investment in L&D. They understand that appropriate and timely skill development programs are the key to long-term organizational success and employee retention. Furthermore, addressing skill shortages and building capability has become more vital. Learning and development programs have become the cornerstone of success by upskilling and reskilling employees to better meet current demand. Besides finding additional employees and alleviating current business pressure, it creates a more flexible and resilient workforce that is able to adapt to rapidly changing skill needs. Moreover, the advent of artificial intelligence and its associated advanced applications has accelerated the need for organizations to invest in technology-based upskilling programs. While most businesses engage in L&D activities to some extent, the ROI is not easily quantifiable. To know about the best return on the investment, it is crucial to assess the RoI of learning and development.

Leveraging productivity gains through upskilling

According to a recent study by TeamLease Edtech titled “Return on Corporate Learning Investments,” 42% of respondents said that investing in training increases productivity levels significantly by up to 40%, and about 25% of employers thought that the productivity gains range between 11% and 20% in time value. A significant 73% of respondents of the survey indicated that routine tasks performed by current employees took 11% to 40% less time after receiving productivity training. This demonstrates unequivocally that upskilling investments and increased employee productivity are directly related. The expenses of upskilling are, in essence, dwarfed by the ROI as assessed by the metrics of customer satisfaction, employee retention, sales growth, and employee engagement. Furthermore, effective L&D involves upskilling and reskilling employees to equip them to provide the greatest value to the company and also foster a learning culture that encourages continued learning.

Improving business longevity through greater employee costs and benefits

The two main causes of employee churn are low pay and few chances for career progression. The majority of organisations are realising that L&D programmes must adapt to match their organization’s needs as the workplace undergoes significant change. Professional learning and development initiatives that incorporate core competencies and soft skills produce a long-term staff development strategy that promotes lifelong learning. Evidently, the research suggests that it aids in lowering the attrition rate by 10% to 30%. This demonstrates unequivocally that the secret to developing a long-term, sustainable, and prosperous business environment is healthy, engaged employees. Businesses that invest in employee upskilling also help employees feel more valued and engaged, which in turn lowers attrition and opportunity costs in the near term.

Creating an innovative and future-proof workforce

The current skill gap that has developed as a result of various circumstances like dynamic work and workplaces has evolved over the past few decades due to advancements in technology, a rise in employee expectations, enhanced demand for new capabilities, dynamic labour demographics, a focus shift on inclusion and diversity, innovative workforce models, etc. The COVID-19 pandemic in very recent years has undoubtedly impacted workplaces, revolutionized the overall position of L & D initiatives within organizations and inspired them to think about how to deliver learning in the near future. L&D managers must facilitate the workforce to continuously learn and relearn, which is the only way to address the impending skills gap. Capabilities must be developed at the individual, team, and larger organizational levels by L&D teams by clearly identifying existing skill gaps, learning operations, maximizing investment in L&D, and of course implementing them cost-effectively and efficiently. In turn, it assists in creating a dynamic workplace or shop floor environment that fosters innovation and embraces change. In the long run, organizations that have a continuous innovation mindset will thrive and will be able to tackle “force majeure” changes much easier than stagnant organizations. Essentially, innovation drives productivity, and productivity in turn drives sustainable growth and revenue generation.