Upskilling and Retraining Employees for a Post-COVID Workplace

The equivalent of 305 million full-time jobs has been lost globally since COVID-19 hit, according to the International Labour Organization. But despite near-record unemployment rates, there are currently 7.4 million job openings in the U.S. alone. These unfilled positions are partly the result of an ever-widening skills gap, caused by factors ranging from improperly prepared job seekers and a lack of on-the-job training to increased employer expectations.

However, the pandemic accelerated the trends driving the evolving skill requirements in today’s workplace. With most workers forced to shelter-in-place at the beginning of the pandemic, employers had to quickly adapt or risk falling behind. Many were able to automate certain job tasks through the use of artificial intelligence or other technologies. But in doing so, they uncovered a new and pressing need for workers with the requisite skills to support these technologies.

Now, many organizations and other institutions are grappling with how to close the skills gap before it’s too late. If no action is taken, over the next decade the U.S. will likely experience a shortfall in its workforce of 600,000 to 12.5 million people, which will cost the U.S. economy $1.2 trillion of GDP. On the other hand, closing the skills gap by 2030 could create 5.3 million new jobs globally, and add U.S. $6.5 trillion to the global GDP.

Let’s look at the challenges and opportunities that lie ahead as employees, businesses, and other stakeholders adapt to meet the demands of the post-COVID-19 workplace and address the skills gap head-on.

New challenges and new opportunities

Addressing the skills gap will be a massive undertaking, there’s no question about that. It’s predicted that 40% of workers will require up to six months of reskilling by 2025. And amidst the evolving skills environment, employees are struggling to navigate the pathway to career growth. In fact, Gartner estimates that the number of skills required for a single job is increasing by 10% each year, and 33% of the skills needed three years ago are no longer relevant.

Minorities and other groups face even greater challenges when it comes to obtaining the skills they need to advance in their careers. New data reveals that 50% of workers have experienced discrimination at work which led to them missing out on career advancement or training. Employees reported that this discrimination was based on a variety of factors, including race/ethnicity, gender, class, age, and educational status.

Race-related incidents over the past year also helped shed new light on the unequal treatment of minorities in the workplace. With this in mind, employers taking steps to upskill their workforce are simultaneously considering how to make access to training and jobs more equitable. Ultimately, this will contribute to a more diverse and inclusive workforce, greater business success, and more sustainable economies and societies.

Digital and soft skills will be in high demand

It’s no surprise that technology skills and digital fluency rank as some of the most important competencies for 2021 and beyond. In fact, employers seeking software engineering, data analytics, and computer or tech workers will face a real challenge within the next few years. At the same time, soft skills will become much more valuable as the role of humans in the workplace shifts dramatically. These are skills that cannot be replicated by technology, for example, emotional intelligence, resilience and adaptability, collaboration, and communication.

But it’s not just employees who are lacking in these skills—leaders are also failing in this regard. One study found that while 88% of employees believe that digitally savvy leaders are key for organizational success, only a fifth of respondents said their leaders have the right mindset to thrive in the digital economy. Other research reveals a notable lack of soft skills among business leaders during the pandemic. Over one-third, (36%) of employees said leadership failed to empower teams, while 31% said a lack of empathy impacted motivation and performance.

Optimism amidst uncertainty

The skills gap is top of mind for the C-Suite, as well as HR and Learning & Development (L&D) leaders. PwC finds that nearly three-fourths (74%) of CEOs are concerned about the availability of key skills, and research from LinkedIn reveals that 66% of global L&D professionals agree that L&D must focus on rebuilding or reshaping their organization this year.

Employees are also acutely aware of the disruption taking place around them. Research from PwC finds that 60% of employees are worried that automation is putting many jobs at risk, 48% believe traditional employment won't be around in the future, and 39% think it’s likely that their job will be obsolete within 5 years. 

But workers are optimistic and prepared to rise to the occasion. Over three-fourths (77%) are ready to learn new skills or completely re-train, and 74% see training as a matter of personal responsibility. And, 80% are confident they can adapt to new technologies entering their workplace.

A multi-pronged approach

Of course, it’s up to individuals to help themselves by proactively learning new skills and being open to change and growth. Many workers (40%) successfully improved their digital skills during the pandemic, and demand for courses that teach soft skills skyrocketed in the past year.

However, companies and governments are also stepping up. For example, Microsoft committed to helping 250,000 employers make a skills-based hire in 2021, and the company has already helped over 30 million people gain access to digital skills. Meanwhile, the $40 billion job training plan in President Biden’s jobs and infrastructure proposal would help laid-off workers pay the bills while training for new jobs in growth industries like green energy and healthcare. 

However, the real onus is on employers to anticipate the skills they’ll need, improve training, and foster a culture of learning. Many companies are already taking ownership around this—research from Udemy estimates that 38% of the workforce was upskilled in 2020, versus just 14% in 2019. Meanwhile, employers like Walmart and Amazon are investing in cross-training their staff to provide them with more room for career growth. Amazon, for example, will spend $700 million retraining a third of its U.S. workforce by 2025. 

Another way that employers are tackling this issue is via collaboration with educational institutions. Firms like PwC, KPMG, and Ernst & Young are customizing graduate programs so they include training in company skillsets and experience working on actual projects. These partnerships also help move the needle on the issue of unequal access to career opportunities. Case in point: PwC’s program is focused on enrolling primarily Black and Latino students. However, universities will also need to evolve to be more focused on employment outcomes, especially for minority students.

On the other end of the spectrum, some companies are dropping degree requirements completely in a move to widen their talent pool and diversify their workforce. For example, Ovia Health no longer requires a college degree for many of its entry-level jobs. This is because the company recognized that they were missing out on a lot of talent, especially diverse candidates, by having an arbitrary requirement for these positions.

Along the same lines, employers like Salesforce and Amazon are offering what’s known as “last-mile training” as an inexpensive and effective way to close the skills gap. Last-mile training equips new hires with specific technical skills and knowledge that are traditionally only gained through work experience. The cost of training new hires and paying them an entry-level wage, a process which typically lasts about three months, is generally less than $20,000. And as an added benefit, investing in this training may boost employee retention.

Closing the gap

The COVID-19 pandemic continues to amplify the need for new workplace competencies, particularly those centered around technology and soft skills. But employers won’t be able to close the skills gap by themselves. They’ll need to work with learning companies, universities, and government institutions to create new pathways to success, especially for minority workers. This year will be a time of immense uncertainty, but also immense opportunity for those who seize upon the chance to drive real change for their business and their people.

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