With the impending fiscal cliff, a lack of sustainable job creation and an expectation of relatively high unemployment for the foreseeable future dominating national discussions, there’s another serious issue looming for employers in 2013: the skills gap. Organizations challenged with a lack of talent must act now or suffer the fate of losing their competitive edge, whether it is closing their skills gap or retaining existing employees, according to the results of a new Cornerstone OnDemand (NASDAQ: CSOD) survey conducted by Kelton. The research reveals that more than 19 million Americans are planning to change jobs in the next year. And with the average cost to recruit and train one employee estimated at 2.5 times an employee’s salary, U.S. businesses are looking at a steep price tag of $2 trillion on potential employee turnover.* The survey also reveals three concerns that face nearly every company today:
- Increasing absence of ongoing training and development. In the past six months, only about a third (32 percent) of employed American adults has received training and development to better perform their job.
- Misaligned goals and expectations between managers and employees. Only one in four respondents (25 percent) has established career goals with their manager/employer.
- Lack of individual recognition and performance feedback. Two-thirds (66 percent) said they haven’t received useful feedback from their manager/employer.
- Reskilling high-potential employees and filling critical roles. To address skill gaps and fill critical roles, organizations should look to their own workforce for high-potential employees vs. relying on external candidates. Reskilling employees with targeted training helps to bolster talent pools and prepare for future business needs.
- Coaching-style performance management. Rather than waiting for formal reviews, managers need to foster a more continuous, meaningful dialogue with direct reports and create opportunities for real-time performance coaching and one-on-one feedback. Employee goals should be more in sync with business objectives, as well as their own career aspirations. And training and development becomes a more essential part of the mix in order to make performance and career discussions more actionable.
- Crowdsourcing performance feedback and recognition. Social feeds and badges can help managers extend the feedback loop to other parties, such as peers or project teams. Sharing of feedback and recognition becomes more immediate, real-time and relevant. Not only can this give managers better insight into how employees are truly performing, it also allows employees to curate positive feedback and kudos in a central location that they can reference for more formal discussions.
- Just-in-time training and development. Whether it is through social networks, mobile devices or in the cloud, today’s technologies can make it easier and more convenient for employees to access the just-in-time information and training they need to do their jobs to the best of their abilities anytime, anywhere. When blended with traditional development opportunities, these new ways of learning can help to create efficiencies and lower the cost of training initiatives.
*Sources and Statistics
- Number of employed people in the U.S.: 143,549,000 (Source: http://bls.gov/news.release/empsit.t01.htm);
- 13.3% are planning to leave their jobs in the next year: 19,092,017 (Source: Kelton / Cornerstone OnDemand research )
- Average wage index for 2011: $42,979.61 (Source: http://ssa.gov/oact/cola/awidevelop.html)
- Number of firms in the U.S.: 21,351,320 (Source: http://www.census.gov/econ/smallbus.html)
- Average cost to recruit and train one employee is estimated at 2.5 times an employee’s salary = $107449.02 (Source: Deloitte 2009, “Managing Talent in a Turbulent Economy: Clearing the Hurdles to Recovery”)
- Overall cost to U.S. businesses: $2,051,418,516,473.34