Covid renewing employers’ focus on internal talent pools, research finds

Experts warn against cutting ‘vulnerable’ L&D budgets in challenging times or risk potential future growth

Employers are prioritising searching for talent within their existing workforce rather than looking externally for new hires because of the uncertainty caused by the coronavirus crisis, research has found.

A survey of more than 250 UK business leaders by LinkedIn found that nearly a third of employers (31 per cent) said they would be focusing on giving employees the opportunity to move into different roles internally in the next six months. A similar number (32 per cent) said that reskilling and upskilling employees is a top priority for 2021.

Janine Chamberlin, senior director at LinkedIn, said the continued uncertainty around Covid-19 has meant many companies are looking to “tap existing employees for new opportunities within their organisations” instead of hiring external candidates.

“Encouraging internal mobility not only boosts retention and improves employee engagement, but it can also help companies evolve their businesses from within and bridge any existing skills gaps,” Chamberlain said. “To ensure employees are set up for success and have the skills to support career transitions, reskilling and upskilling initiatives are vital and HR professionals will play a pivotal role in facilitating this.”

The research found a third (34 per cent) of leaders said they wanted to create a culture of learning to help employees develop the skills they needed for the future, and 31 per cent said they were focused on closing the skills gaps within their organisations.  

Lizzie Crowley, senior skills policy adviser at the CIPD, warned against being tempted to cut learning and development budgets in the wake of the pandemic. She explained that, in previous recessions, L&D budgets were “vulnerable” as businesses looked to cut costs, but she said doing so now could risk potential growth in the future. 

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“It’s like shooting yourself in the foot a bit if you don’t invest in your staff during challenging times,” Crowley said. “Thinking creatively about how you redeploy existing talent within your workforce is what will give you that kind of competitive edge in what is a challenging market.”

By not investing in staff, she said employers could enter a “vicious cycle”, with the increasing likelihood that employees could leave the organisation, and the business could also be unable to introduce the product and process innovations that are needed to be competitive in the future.

Noelle Murphy, senior HR practice editor at XpertHR, added that hiring internally can provide other benefits to organisations, especially with the pandemic “ripping up the recruitment playbook”. 

“Hiring internally ensures that one of the key elements of retention is in place – a good fit with the organisation’s values and culture,” Murphy said. “Investing in learning and development can be a far more effective use of funds than spending money on external recruitment and selection processes, and HR can make a powerful business case for investing in identifying talent internally, not only for roles available today but also future requirements of the organisation.”

She added that developing internal talent also built positive relationships with employees, demonstrating confidence in the skills and competence of the workforce and meeting aspirational needs.

Earlier this year, a report from the Confederation of British Industry (CBI) found nine in 10 UK employees would have to reskill by 2030 as a result of the pandemic accelerating changes to the world of work. 

The report, based on analysis by McKinsey, found that in the next decade, 26 million workers would require upskilling to keep up to date with technological and business developments as their role evolved. Meanwhile, another 5 million would go through a fundamental job change and require retraining, it discovered.

Suzanne Hurndall, relationship director at hr inspire, encouraged businesses to identify internal talent that can move up within the business, which she said was just as important to wider business strategy as attracting new employees. 

“Creating dedicated initiatives for key groups within the company to achieve this goal is vital – it shouldn’t be a ‘one size fits all’ approach and implementing real L&D can be truly transformational,” Hurndall said. 

She added that HR leaders have struggled this year to ensure that employees had the skills necessary to navigate an increasingly digitised workplace. But, she said: “This ‘future of work’ is essential to foster a trust culture as we navigate our current landscape and create teams comfortable with grappling together with the unknown.”