As we venture into a new era of workforce dynamics, organizations face unique challenges in talent management. According to PwC’s 26th Annual Global CEO Survey (2023), 36% of CEOs anticipate increased attrition in the next 12 months due to resignation and retirement, while 37% expect these trends to remain constant. Concurrently, SHRM highlights that although the pace of the Great Resignation and hiring activities is decelerating, labor shortages are expected to persist.
This ongoing challenge, fueled by demographic shifts and an aging population, underscores the need for innovative solutions in human resources. In this context, the partnership between Learning and Development (L&D) and Recruitment teams emerges as a strategic imperative.
This article delves into how L&D can be leveraged to address these challenges and transform them into organizational growth and stability opportunities.
A pivotal starting point in modern talent management is inspired by Ulrich’s insight (2019) that emphasizes shifting focus from traditional workforce planning to work task planning. This shift entails translating the organization’s strategic decisions, capabilities, and key roles into defined tasks. Such clarity in task definition opens up a spectrum of options for their execution, ranging from employing full-time and part-time staff to engaging consultants, freelancers, outsourcing, and even leveraging automation. This necessitates rethinking the default reliance on full-time employees for all tasks.
Equally important is adopting a skills-based hiring approach, moving away from traditional emphasis on qualifications and experience. This approach begins with identifying the specific skills required for the defined tasks (as per Ulrich`s suggestion), challenging our ingrained assumptions about traditional qualifications and experience needed. Concentrating on the desired skills enables organizations to expand their talent pools substantially. Reflecting this shift, LinkedIn observed a 21% increase in U.S. job postings focusing on skills and responsibilities rather than formal qualifications and requirements, with a 40% increase in postings not requiring a degree from 2019 to 2020.
These two strategies — work task planning and skills-based hiring — lay the groundwork for exploring three fundamental recruitment strategies: buy, build, and borrow, and the role L&D can play in each.
Buy Strategy: Integrating L&D in External Recruitment
Challenges arise when the candidate pool diminishes in the “Buy” strategy, where the aim is to recruit talent externally. This scenario often leads to significant investment of resources in identifying and attracting potential candidates. Once onboard, these new hires may command higher salaries than existing employees, potentially impacting not only the people costs but also overall employee morale and engagement.
A strategic shift towards considering “near match” candidates is beneficial to mitigate these challenges. These individuals demonstrate enthusiasm for the role and possess the requisite skills and competencies, albeit lacking in certain technical knowledge or professional experience.
Merit Bank adopted a notable practice in this approach in the U.S., where their recruitment team sought candidates with strong customer service skills from retail stores. After comprehensive training in banking operations, these individuals became valuable assets in customer-facing roles.
This strategy of favoring “near match” over “perfect match” candidates necessitates a more strategic form of workforce planning. This includes options like internship and apprenticeship programs, as well as collaborations with educational institutions for reskilling and upskilling.
Build Strategy: L&D as a Catalyst for Internal Talent Growth
Another valuable source of “near match” candidates is the existing workforce.
Familiar with the company culture and operational processes, these employees are quicker to adapt to new roles, often showing higher engagement and retention rates. The LinkedIn Learning Report 2022 supports this, noting that companies excelling in internal mobility retain employees for an average of 5.4 years — almost double the retention span of firms that do not prioritize this aspect. Moreover, employees who perceive their skills as underutilized are significantly more likely to seek new job opportunities. Consequently, investing in developing employees’ skills is a strategic approach that addresses filling current vacancies and enhancing retention.
A prime example is Penske Truck Leasing’s partnership with Penn Foster School to create a development program that aligns employee skills with the evolving demands of the technology-driven transportation industry. This investment in employee education led to significant advancements: over 60% of certified associates earned promotions, and those certified were 50% more likely to remain with the company than their uncertified peers (Forbes, 2017).
The “Build” strategy in recruitment also demands a strategic and well-planned approach. The emergence and growth of internal talent marketplaces, powered by AI, exemplify this strategy effectively. These platforms facilitate matching of open roles within the organization with employees possessing the appropriate skill sets. By maintaining transparency about available positions and accurately identifying suitable internal candidates, organizations can reduce the likelihood of losing valuable employees who might feel limited in their current roles. Tailored development programs play a vital role in this process, helping employees transition from being ‘near match’ to becoming ‘perfect match’ candidates.
Importantly, proactive workforce planning doesn’t necessitate the immediate availability of an open position. Companies can also forecast future needs and communicate these upcoming opportunities to their employees. This approach is exemplified by HCL, which encourages its employees to proactively shape their development paths in anticipation of these future roles.
Borrow Strategy: Flexible Talent Management through L&D
The “Borrow” strategy in talent management can manifest in various forms.
One innovative approach involves the internal ‘borrowing’ of employees for specific, short-term projects. A notable instance is Unilever’s implementation of the AI-driven ‘Flex Experiences’ platform. This tool was particularly instrumental during the Covid-19 lockdown, aiding the Data Science team in swiftly scaling up to meet urgent informational needs related to evolving customer preferences. By drawing on employees from diverse backgrounds and expertise to form a specialized task force, Unilever not only responded adeptly to business demands but also offered its employees valuable opportunities for skill development and engagement.
Another facet of the “Borrow” strategy is leveraging the external network of freelancers.
The UpWork Freelance Forward 2022 survey reveals that 39% of the U.S. workforce engages in freelancing, with a growing trend among the highly educated. The survey also indicates an increasing number of freelancers earning more than their traditional job counterparts, suggesting a stable future for freelancing in the professional landscape. For HR professionals, this underscores the importance of integrating freelancing into their resourcing strategies. According to UpWork`s Future of Workforce Report (2022), 56% of hiring managers increased their utilization of freelancers over the previous 12 months, while 58% were planning to increase their utilization over the next six months.
Engaging freelancers, especially for the first time, often comes with perceived risks related to work quality, commitment, and collaboration style. To mitigate these uncertainties, many companies are forming enduring relationships with freelancers. Regular collaboration with the same professionals fosters trust and mutual understanding, leading to more efficient and enjoyable partnerships.
In industries like consulting, this approach of building long-term relationships with external experts has been a staple for forming high-quality teams efficiently. As a result, the lines between internal and external talent are increasingly blurred. Echoing the thoughts of Alok Singh from the CIPD HR Hackathon, traditional norms around employee benefits and talent development are evolving as employment relationships diversify. Investing in developing and retaining contractors with significant organizational knowledge becomes a strategic decision. For instance, developing the leadership skills of a consultant leading a multi-year project and incentivizing their performance with variable compensation can be highly beneficial.
In line with this, the consulting industry often sees investment in the upskilling of external consultants, ensuring superior service delivery to clients and maintaining a competitive edge.
Conclusion: Elevating HR’s Strategic Role through L&D Integration
In conclusion, integrating Learning and Development (L&D) into recruitment strategies is not just a necessity but a strategic lever for contemporary organizations. By prioritizing skills development, customizing training programs, and adopting flexible learning pathways, L&D becomes a cornerstone in redefining talent acquisition and management. This approach not only fosters an adaptable and skilled workforce but also positions HR professionals as key strategists in organizational growth and innovation.
These examples illustrate that L&D’s potential is not just about addressing talent challenges; it’s about positioning HR as a critical driver of strategic initiatives. Through these efforts, HR leaders can clearly articulate the value of human capital investments to senior management, reinforcing that a skilled and adaptable workforce is essential for long-term business success and sustainability.