We don’t need to remind you that the world is facing economic uncertainty. Whispers (and proclamations) of recessions, layoffs and businesses tightening their budgets are familiar themes at this point.
But business doesn’t simply stop when the economy faces turmoil. Sure, growth projections may be revised and hiring may slow or stall. To weather the storm, though, you need to ensure that your organization still has the talent and skills to perform its core business duties.
In this article, we’ll go over three strategies to prioritize workforce upskilling in the event of an economic downturn. We’ll also provide specific actions you can take to prioritize learning in your organization, even in the face of uncertainty.
Brace for Economic Downturn
We’ve already started to feel it. Headlines and LinkedIn posts abound with news of companies laying off their staff as economic growth slows and outlooks change.
In the US, the gross domestic product (GDP) actually shrank for the first two quarters of 2022 before returning to growth in July. (A recession is often characterized as two or more successive quarters of shrinking GDP.)
Many major banks anticipate a recession will hit in early 2023. Most chief executive officers (CEOs) believe so too, and half of those who do are planning layoffs, a global survey by KPMG found. It is worth noting, though, that an even larger fraction of CEOs are still optimistic their workforce will grow over the next three years.
So what can you do to prepare your own business for a recession or economic downturn?
Action: Consider your own workforce needs over the next six months, one year, two years, five years. What positions will change? How would a long-term downturn impact your workforce? What if it’s shorter than you thought? What skills will your business lack? What skills will need to improve?
Having a plan for a variety of situations is crucial as you brace for a recession or economic downturn.
Prioritize Retention
With layoffs happening or planned, your main priority has likely shifted to retention. That’s especially the case if the job market stays as tight as it’s been, as experts predict, even in the event of a recession. While recruiting may slow down or freeze, you need to keep your existing employees happy, which is especially important if you’ve had to lay people off. Planned staff loss is one thing: losing great talent that is crucial to your core business is another.
As attention shifts to profitability over growth, your company may have plans to pause bonuses or salary raises. You can still show your employees that you care about their growth by providing them with education and professional development opportunities in the meantime. This signals to them that you’re still committed to their careers, even if times are tough.
Action: Create an education-as-a-benefit program (or, if you already have one, optimize it). To do so, you’ll need to answer some questions.
- How much will you invest in your employees?
- How much more affordable will that be compared with hiring for needed skills?
- Will that make your company more attractive to your current (and future) employees?
- How much can you spend to satisfy your staff while still improving your bottom line?
Your answers here will help shape the direction you choose to pursue when it comes to education as a benefit.
Future-Proof Your Workforce
Businesses don’t just exist in the present; human capital investments are long term ones. Professional development is a forward-thinking solution to add lost or missing knowledge to your talent pipeline.
According to McKinsey, half of business leaders say they’re facing problems because of the skills gap, and most of them believe that upskilling and reskilling are the solution.
On the other side of a recession, you don’t want to be starting on the back foot when growth returns. Outpace your competitors by investing in employee learning now.
You can leverage technology like D2L Wave to help in your learning transformation. Technology can help employees and leaders alike clearly see the areas of skill development that the business wants to prioritize.
Action: Decide on the skills that will help future-proof your workforce. Does your company have a gap in middle or people management? What about sales or marketing? Maybe skills like teamwork, collaboration or inclusivity could use improvement. Are your employees interested in taking these courses? And once you start offering these courses, are employees actually taking them?
Understanding the skills your organization has and where it lacks is no small task. Use things like surveys, job duty reviews and performance evaluations to see where skills gaps may exist.
Upskilling Is a Team Sport
Equipping your people with the right tools to succeed is hard, no matter the economic climate. Don’t go it alone.
D2L Wave is a talent development solution that’s free to use and offers programs and courses from world-renowned education partners. We work with you to determine your business needs and customize our catalog to suit them, so employees get access to courses that are aligned both to your objectives and their interests.
Written by:
Chase Banger is a Content Marketing Specialist at D2L. An award-winning journalist and former communications specialist, he has a passion for helping people through education.
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