Survive layoffs, pass upskilling via AI

The past few years have been some of the most dynamic – and difficult – times of our lives. From emerging COVID-19 waves to record high inflation and growing fears of a recession, the world is in constant flux.

At the moment, many companies like Tesla make the difficult decision to unleash their talent. Others, including Meta, Intel, and Uber implement staff freezes or cut budgets. Everyone is reacting to meet an economic slowdown. In light of market volatility, inaction is not an option for business leaders.

Leading a company through these periods of change presents significant challenges, often requiring us to make critical decisions that affect shareholders and employees alike. The survival of the company is imperative, but from my point of view, the needs of shareholders and employees are not mutually exclusive.

Deliberate, thoughtful agility

As founder and CEO, I am committed to building a company in a world that is constantly changing and taking the necessary steps to ensure its survival. At the same time, taking care of my employees as an employer is my biggest priority. Letting talented people go in turbulent times is not only detrimental to those individuals, but is often detrimental to the organization. I am convinced that retaining my employees during an economic downturn, helping them understand their skills and capabilities and actively investing in their growth, will enable them to advance their careers and make a meaningful contribution to the future success of our company.

Here’s the thing: the most impactful advances in AI, blockchain, 5G, biotechnology, and countless other innovations are yet to come. And these fields evolve very quickly. The companies that consciously respond to change must turn agility into a force. By doing this, they build learning flexibility into their current workforce and bring in more people with that skill.

Strengthening our ability to turn in the face of changes in the external market – and turn quickly – is essential for business survival and continued excellence. Leaders can take steps to get their people started and ultimately emerge stronger when the next business expansion begins.

Why upskilling is an integral part of a recession-proof talent strategy

Skills quickly become obsolete. According to the World Economic Forum, 50% of all employees will have to be retrained by 2025. Perhaps counterintuitively, layoffs and prudent approaches to hiring serve to widen skills gaps within companies. Leaders simply cannot afford to wait for the economic signal “all clear” and the next workforce boom to bring the increasing demand for skills into their workforce.

As evidenced by the tightness in the recent and current labor market, companies can only respond to the talent needs of a future-proof company with upskilling. Even in a healthy economy, hiring people with new skills is costly. An online course costs a fraction of the time and resources of onboarding new talent, taking up to 12 months to achieving peak performance potential. In a period of workforce freeze, when new skills are not entering the labor market, equipping current employees with new skills is the only way to close these critical skills gaps.

With hiring delays, retaining highly skilled top performers is critical. A dedicated focus on personalized upskilling contributes to reduced attrition. Studies show that employers who investing in career development build more engaged employees in the long run. They want to stay to learn new skills, work on exciting new projects, and grow their careers within the organization, not elsewhere.

When markets eventually shift in favor of candidate preferences, and employees have a choice of companies to work for, they will shall choose the organization with a proven track record of investing in upskilling and looking after their people. Companies that invest in building learning cultures emerge from disruption with a stronger employer branding value proposition.

Companies do not have a detailed understanding of their people

The challenge today is that most organizations do not have a comprehensive understanding of their workforce’s skills, let alone employee learning flexibility on an individual level. As a result, there is little insight into who can do what and employees lack insight into their own career path. Findings from our new survey of HR leaders suggest that most organizations are: have difficulty providing career development opportunities for their workforce, with only 34% providing insight into the current and future skills needs of all employees.

With the right insights, people can gain a deeper understanding of their capabilities, learning ability, and career opportunities within the company. It empowers them to work toward specific desired outcomes and demonstrates that they are critical to the company’s future success. By aligning these outcomes and career paths with the future capabilities needed at the organizational level, upskilling becomes a strategic competitive advantage.

Devising an effective upskilling strategy is only possible with deep-learning AI. Otherwise, the data is simply too complex and the process extremely cumbersome. People today have multiple career paths. Keyword matches no longer work for transferring people between departments or even industries. And tapping into AI is the only way to identify learnability and potential, the element that truly makes people and businesses future proof.

A double commitment to business continuity and employee wellbeing

In recent years, a great deal of attention has been paid to the well-being of employees and the experience of employees. Take care of your employees, absolutely, especially in turbulent times. The best way to take care of your people is to know them, guide them and invest in them.

This effort and dedication will pay off when your business emerges on the other side with a highly skilled workforce and a learning culture that attracts more high-quality people.

Ashutosh Garg is the co-founder and CEO of Eightfold.