Technology is an arms race. And as if that isn’t enough, it has sparked a race with education. Welcome to the challenge that’s here to stay.
In 2015, a Bank of America report revealed that small-business owners cited training and development of existing employees as the top most priority given the difficulty of finding adequately skilled talent externally. Yet, a 2017 Deloitte survey found that over 50% of companies didn’t have learning programs focused on emerging technology upskilling.
Over a span of just a few years, Big Data, Analytics, Data Science and Artificial Intelligence (AI) have irreversibly transformed literally every industry, delivering new efficiencies as well as revenue and growth opportunities at scale. Having emerged not a day too late, when even industry-leading organizations were already buckling under the pressure of increasingly feeble productivity gains and exceptionally increasing demands, companies were beyond enthusiastic to embrace the digital transformation. But therein lies the dilemma. How does one adopt and apply emerging technologies when there is a shortage of skilled talent in the ecosystem?
To understand where companies should be headed, let’s first take a step back and evaluate where things stand today in terms of technology adoption and investment. A recently launched IDC spending guide reveals that the global spend on Cognitive and AI-enabled applications is expected to display continued strong growth, with business investments going up to US$77.6 billion in 2022 at a compound annual growth rate (CAGR) of 37.3% during 2017–2022. Additionally, a Forbes research states that AI and Machine Learning (ML) will potentially deliver US$2.6 trillion in additional value in marketing and sales by 2020 – and up to US$2 trillion in manufacturing and supply chain planning. With this swift growth of technology, companies have ended up facing a yawning technology gap in their workforce, and it’s only expected to widen over time unless appropriate measures are adopted immediately.
Practically speaking, companies have two options. They can either recruit skilled tech talent, or retrain their existing talent to be able to cope up with this change. But one thing’s for sure – talent has become a critical driver of digital transformation.
To Hire or Upskill
For anyone who’s planning on hiring and firing their way out of the technology corner, there are a few things to be noted. Most importantly, there’s a severe shortage of skills available in the market – a shortage that’s quickly approaching crisis proportions. This has the added impact of making the available talent pool more expensive, placing it out of reach for many growing companies. Additionally, recruiting also involves considerable expenditure of both time and effort in the form of onboarding and alignment of new talent with company culture, vision, objectives, etc. In other words, recruiting new talent is a knee-jerk reaction that only results in a short-term solution to a growing and evolving problem that won’t go away.
On the other hand, ROI through skill development has proved to be beneficial - both from a monetary and effort standpoint - for most organisations.
For instance, consider this scenario: In India, the average salary of a software engineer with ~3-5 years of experience is ~US$13,000/year. Average salary of a AI / ML engineer or a Data Scientist with similar experience is ~US$32,000/year, which means organisations incur an additional US$19,000/year for skilled talent in emerging tech. However, an investment of ~US$1,600 / year in hi-tech upskilling is expected to give you a gross ROI of ~12x and an attrition adjusted ROI of ~10x.
In addition, re-training also has the immediate impact of boosting employee morale. This in turn has a powerfully positive effect on employee efficiency and productivity, and therefore in the long run, on the top and bottom lines. With increased employee engagement and lower attrition levels, the overall work environment remains healthy too. But undoubtedly, one of the biggest benefits of retraining is the fact that it fosters a culture of continuous learning – one that ensures that employees stay confident and open to change – which in turn results in an adaptable, truly agile workforce that’s primed to take on future disruptions head-on.
Attaining Scale Through Upskilling
While there’s no denying that the skill gap that exists in the highly tech-driven and rapidly evolving environment today is a daunting one, what’s important to note is that closing it is no longer an impossible task. All it takes is a shift in mindset and culture, with a focus on creating a roadmap for flexible, customized learning programs that target highly specific skills and (most importantly) relevant learning outcomes – rather than the templatized, one-size-fits-all, classroom-style training culture of years past. This approach to building a culture of continuous learning will ensure sustained business relevance in the years to come.
At Udacity, we work with global companies to help them:
Launch an upskilling initiative across their company that clearly articulates the expectations and success metrics
Develop flexible learning paths to help employees reach the next level and prepare for tomorrow
Encourage our stakeholder(s) to invest in frequent, regular communications about the employee experience’
Work collectively to employ incentives, learning models, leadership communications, and other motivational campaigns to drive completion rates of upskilling programs
How do you think your company fares in terms of digital maturity? Is your workforce skilled enough to achieve your business objectives, or are you facing the technology gap that plagues the best of companies today?
Learn how Udacity can help transform your workforce.