The labour market has seen a rapid reversal in its balance of power over the past 24 months. In 2020, there were four unemployed people for every job vacancy, meaning businesses had a huge pool of talent to sift from. The pendulum has now swung firmly the other way, and control has begun to lie in the hands of existing employees and prospective talent, who can afford to be both selective and demanding in their job search.
With half of Britain’s workers reportedly eyeing up new jobs amid the Great Resignation, businesses have been scrambling to address the underlying issues that are causing skilled employees to leave. A recent Udacity and Ipsos study found that nearly half of employers reported that employee turnover is hindering their ability to achieve key goals.
To investigate why staff are quitting, a 2022 Engagement and Retention Report found that career progression was the number one pull factor attracting employees to new jobs. Skilled people search for new jobs when they feel that their career is stagnating, and businesses must demonstrate their dedication to career progression through meaningful learning and development (L&D) programmes in order to keep them.
Despite the importance of L&D initiatives for staff retention, there is an alarming disconnect between how enterprises and employees view the success of these programmes. Our research has shown that approximately 80% of businesses rated their own talent transformation programmes as successful, while crucially, just 39% of employees agreed. Addressing this disparity and increasing employee satisfaction is the key to staff retention during the Great Resignation.
The talent shortage
Astonishingly, our research discovered that 69% of UK businesses faced disruption as a direct result of the pandemic-driven recalibration of the country’s workforce. During this period of disruption, many people suffered feelings of job uncertainty, burnout and career stagnation. After transitioning out of a period of stark uncertainty, many seized the opportunity to seek a new challenge and move on from their current roles.
This country-wide issue has hit the technology sector hard, which was already struggling to fill technical roles. While many industries lost customers and resultantly had to reduce their workforce, the tech sector created nearly 80,000 new jobs in 2020. The continued and accelerated digitisation of older industries meant that B2B tech companies across the board witnessed a rapid period of growth during the pandemic.
The lack of job-ready tech talent has meant that many of these high-growth companies have struggled to hire enough staff to keep on top of demand, with the sector seeing a 34% rise in the number of unfilled vacancies compared to the previous year. This is only being exacerbated further by the Great Resignation, as talented staff pursue new opportunities, with hiring managers left struggling to replace their workforce while simultaneously trying to double headcounts.
Signalling the great disconnect
Given the startling disparity between enterprise and employee attitudes towards current L&D programmes, it’s no wonder that only 29% of tech professionals plan to stay in their current roles. But why is there such a disconnect between employers and employees when it comes to L&D?
For many employees, L&D programmes consist of attending mandatory courses based on dated and theoretical models that have only limited applicability to their day-to-day jobs. More often than not, attendance is the only deciding factor of whether a student passes or fails, meaning that a grasp of the subject material is a secondary concern.
In Michael Spence’s seminal work, Market Signalling, educational accolades are used to ‘signal’ that a certain set of skills have been acquired, regardless of whether those skills have been developed or not. For busy employees, ineffective and time-consuming L&D programmes can be incredibly disillusioning. Many consider these courses to be simply a means of signalling that they possess a skill, rather than learning a new one that they might then go on to use on a day-to-day basis.
Firms can combat this by working alongside employees to create tailored talent transformation programmes that develop new and relevant skills that staff might desire. Our research showed that 70% of employees believed that being able to create their own educational pathway by choosing what courses they do will help in learning new skills. Therefore, in order to re-engage employees and maximise the success of L&D programmes, enterprises must ensure that staff are being consulted on developing newand relevant skills, rather than signalling that they possess skills they already have.
Cultivating the workforce of the future
Somewhat unsurprisingly, young workers are most at risk of becoming a statistic in the Great Resignation. A survey conducted by Gartner found that only 16% of IT workers aged 19-29 plan to stay in their current jobs.
The alienation of young workers should be a serious cause for concern for enterprises. One of the most pressing issues facing employers in the UK at present is the challenge of adapting to the ageing population. The Government has projected that by the year 2040, one in seven people will be over 75. With a smaller percentage of the population forecasted to be of working age, enterprises need to nurture young talent to create long-standing opportunities for employees.
Young people are aware of their value and expect their employers to earn their loyalty. Our recent study revealed that 57% of 18-29-year-olds, and 65% of 30-49-year-olds believe that employers should invest in their future by providing impactful skills training.
While the Great Resignation may simply be a short-term aftershock of the pandemic, the ageing workforce is not an issue that can be solved overnight. In order to maintain a skilled and flourishing team, enterprises need to act now and invest in long-term talent transformation strategies for their employees. Only then, will they truly avoid the catastrophic business impact of the Great Resignation.
Laura Cleaver, Vice President: EMEA & APAC at Udacity.
In this article, you learned that:
- A recent Udacity and Ipsos study found that nearly half of employers reported that employee turnover is hindering their ability to achieve key goals.
- The lack of job-ready tech talent has meant that many of these high-growth companies have struggled to hire enough staff to keep on top of demand.
- Despite the importance of learning and development L&D initiatives for staff retention, there is an alarming disconnect between how enterprises and employees view the success of these programmes.