Posted by Jai Shah, Managing Partner Product Innovation and Development
At many companies, training is what’s known as a “check the box” activity — a dry exercise in ensuring employees have the information they need to be effective and compliant. New forces, however, are conspiring to turn that thinking on its head. Talent shortages and what’s sometimes referred to as the “middle skills gap” are motivating companies to adopt a much more strategic view of training. The oil and gas industry, for example, currently needs about 60,000 chemical engineers but only 1,300 graduate from US schools each year. Oil companies therefore have a strong incentive to take a more active role in the professional growth of their existing energy engineers. What are the key characteristics of the companies embracing this new competency-first mindset?
Employees get a clear path forward. Call it “compensation plus.” In addition to salary and benefits packages, many companies are also now starting to offer employees a clear, step-by-step understanding of how they can advance at the company — called competency maps. As more companies understand that internal mobility is a major factor in employee retention, more are making these personalized plans a cornerstone of their employee relationships. Among the 125 companies ranked as having the best training programs, 99 percent used competency maps and while the average number of years a U.S. wage or salary worker stays at a job is just over four years overall, the companies with top ranked-training programs enjoy an average of eight years of employee tenure — double the national average.
Decisions are data driven. Some human resources departments tend to view skills gaps in a judgmental way, unintentionally creating feelings of shame and lack in employees that would otherwise be motivated to help. A compliance-first work culture takes a more objective approach, using data to evaluate the company’s overall competency levels, then using that information to set clear, achievable goals for raising them. Once an organization-wide goal is set, team-level plans can be developed and enacted. Individuals develop a much stronger sense of how their skills are driving the company’s larger success — no judgement attached.
Workforce development is a core value. You hear it over and over again from companies that make the annual “best place to work” lists: strong buy in from senior executives is what makes workforce development programs really shine. Senior executives in competency-first workplaces understand exactly how training contributes to the organization’s most strategic objectives and not only invest boldly in that vision, but communicate it repeatedly throughout the year and report back on results.
Training is treated as more than just a one-way information transfer. We’ve all been hearing for awhile now that the annual review is passé. Many companies are now tracking employee sentiment in real time and organizations that place a high value on workforce development tend to see it as more than just a vehicle for imparting information, but also as a key touch point between the individual and the organization. A recent study found that “high commitment” systems — those aimed at demonstrating a company’s commitment to an employee’s development — act as a key factor in retention.
The workplace culture is supportive. In heavily regulated industries, it’s easy for a “gotcha” style workplace culture to develop inadvertently. A competency-first culture by contrast favors a more supportive, team-centric approach in which workers are given plenty of opportunities to have candid conversations with one another for knowledge exchange and skill sharing. Role play can be a great tool for building a supportive work culture because it gives people a way to get constructive feedback in a protected environment.
Workers are empowered to change processes. In The Power of Habit, author Charles Duhigg explored how aluminum manufacturing giant Alcoa achieved record profits and an legendary safety record. The secret? Letting employees shape processes. When he came on board, then CEO Paul O’Neill revised all of Alcoa’s safety protocols and asked line workers for their input. Workers provided lots of it, but they didn’t just want to talk about safety. They wanted to talk about their other ideas for improvements too. Several of the suggested improvements paid off. By the time O’Neill left the company to become Treasury Secretary, Alcoa’s market capitalization had risen by $27 billion.