The established linkage between L&D spending with business survival and success
Not long ago in 2018, while presenting Learning & Development trends research report done by BITS Pilani’s Work Integrated Learning Programmes (WILP) Division at a conference in Mumbai, I told the audience in a light-hearted way, that it seems the L&D professionals love some of their problems so much that these problems seem to stay with them year after year. At that time it was a remark to bring to attention some of the most audacious problems faced by Corporate L&D such as the problem of lack of alignment between learning & development strategy with business strategy or Weak ways of measuring the business impact of learning investments etc. These problems were mostly about clearly correlating L&D investments with business success and this missing clarity leads to budget cuts or lower allocations for learning than needed by many organizations.
Fast forward to 2021 and it seems that at least among the tech giants of the country the linkage of L&D spending with business survival and success has been clearly established. All these tech giants have increased their Learning & Development investments and large parts of it are being directed towards reskilling of employees.
A close look identifies 3 reasons catalysing the investments in reskilling by the Tech Giants. These reasons are as follows:
The Hunger for Digital: Customers of the Tech Giants are expressing an intense “Hunger” for Digital solutions. The fast-emerging proof of business success with digital transformation is too strong a lure for the customers of big tech giants to ignore. For instance, a McKinsey survey revealed that data-driven organizations are 23 times more likely to acquire customers, 6 times as likely to retain those customers, and 19 times as likely to be profitable compared to other organisations. No wonder that Customers of Tech Giants aim to soon digitally transform their business and adopt new-age technologies such as cloud, big data analytics, IoT, blockchain, and AI to win in their respective markets. Almost all tech giants are already reporting a rising flow of digital projects and digital solution requirements in their prospect funnels and order pipelines. And, moreover, this trend is here to stay. According to the Nasscom Perspective 2025 Report, the share of digital technology investment will rise from 35% in 2020 to 60% in 2025 which is a great demand indicator for the Tech Giants. Obviously, the hunger pangs of the customer for digital solutions cannot be satiated by the talent pool in legacy technologies. It is a huge imperative for Tech giants to swiftly reskill their employees to meet the requirements of customers who are willing and keen to adopt new technologies at speeds dramatically faster than ever before and these customers are not ready to wait.
Waged for Territory or Talent, All Wars are Costly: There is a war out there for digital talent. According to NASSCOM, To meet the growth forecast of the Indian IT Industry from USD 195 Billion to USD 300 Billion by 2025, the future skills talent pool needs to grow from 1.7 Million to 3.5 Million, which is an almost a 2 fold jump in just about 4 or 5 years. Where would these people come from? The Talent pool has not expanded with this dramatic surge in demand. The result of this great talent crunch is more companies battling it out at campuses for fresh hires and in the marketplace for lateral hires. This war for talent is already raising the costs for acquiring new talent and it may soon reach unsustainable levels. Competitive hiring & poaching to desperately meet the need for future skills and digital-ready talent will raise the cost for all and even more so for tech giants. A new competitor in this talent war has also arrived in the form of technology start-ups. These new David-like entities are successfully luring away digital talent from Giant Goliath-like Tech firms. It is estimated that almost 11%-13% of the digital talent is recruited by tech start-ups now. It is clear that Tech Giants are already discovering the high costs of new talent acquisition and hence have no option but to invest more in reskilling existing employees to meet its digital talent needs in a sustainable manner.
The Great Resignation: This term was coined first in the US to denote a trend where post-pandemic a lot of workers & professionals revaluated their life’s priorities and refused to resume their existing jobs or take up new jobs despite an overflow of opportunities in a resurgent economy. The Great Resignation seems to be a trend also in India and is even more visible among members of the workforce skilled in new-age digital technologies. Microsoft’s 2021 Work Trend Index shows 41 percent of the global workforce has the intention of switching jobs this year. Upskilling the existing employees and providing internal mobility is being identified as a great way to address the impact of the great resignation. As per LinkedIn’s workplace learning report 2021, creating internal mobility makes employees stay 2x longer and remain 3.5x more engaged. However, creating internal mobility for employees with only legacy skills will need serious investments in reskilling by the Tech Giants.
“Education is not something you can finish,” said the great science fiction writer Isaac Asimov.
I think the big tech giants are telling the same to their employees. Their heavy investments in reskilling is saying it all and the three big reasons above would continue to catalyse these growing investments for a long time.