Valuing Competency: How Businesses Thrive in the Skills Economy

Posted by Penn Foster on May 8, 2019

Imagine a future in which employers focus more on skills competencies than on degrees when hiring new employees. While in some industries, that future may be far off, for middle-skills industries that are hit the hardest by the skills gap -- industries like allied health, manufacturing, the trades, and tech -- this new way of measuring candidate readiness might just be the solution they're looking for.

Technology is changing the world of work faster than it ever has before. The degree a student earned five years ago, might not translate well to the workplace of today. This isn't just true for technical jobs. Technology is changing the way we communicate with our customers and within our organization. It's shifting the daily demands of work toward less repetitive and more collaborative and creative tasks. It's even changing customer and employee expectations in a way that businesses couldn't have predicted 10 years ago.

Businesses looking to thrive within this new paradigm need to look beyond degrees to find the right employees. They need employees with the skills to get the job done. If they can't find those employees, businesses need to be ready to help curious and motivated applicants build the skills they need. Skills have become the most powerful currency in the modern world. It's time that we started to think about skills training as one of the currencies by which we remunerate employees.

Under this model, skills training isn't just a perk or a benefit. Instead, it's a fundamental part of an employee's compensation package. As fundamental as their paycheck. And it's one that delivers positive ROI to employers while giving employees the capital to succeed in the modern job market. Money can be spent only once, while skills well-learned can can be used over and over for a lifetime.

The ripple effects of skills training

When you buy a piece of equipment for your business, you exchange currency, that is money, for a device that will improve efficiency and boost productivity. The same is true when you invest in skills training for your employees. You exchange currency for a skill that will make that employee more productive, more confident in their job, and less likely to look for opportunities elsewhere.

According to the National Center on the Educational Quality of the Workforce, a 10 percent increase in workforce education levels leads to an 8.6 percent gain in productivity. Compare that to a matching increase in the value of equipment, which raises productivity just 3.4 percent. So investing in people is more valuable than investing in new equipment, at least if productivity is your goal.

There's a bonus effect too. When you help employees build new skills, the learners aren't the only ones who benefit. Employees who work with and around the learner get swept up in the tide. They learn by observation and become more invested in the business. In fact, for employees, just knowing that their employer is willing to invest in skills training can make them feel more valued and more engaged. So training employees and offering company sponsored skills development can have a ripple effect that touches everyone in the organization, not just those that are actively learning.

What employees want

You should be encouraged to know that your employees likely already recognize that skills are valuable currency. The 2017 Skills Gap Report found that 43% of millennial workers feel personally affected by the skills gap. These employees are ready and willing to learn. They even have a list of skills they think would be most valuable in their jobs. Including:

  • Leadership and management
  • Productivity skills
  • Interpersonal work relationships
  • Soft skills

The employees who are most driven to learn and grow are usually the high performers. According to Gartner, high potential employees are 15 percent more likely than others to leave when they feel disappointed with their future opportunities.  For these employees, the opportunity to grow and develop has a bigger impact on their happiness than income or promotions do.

The essential skills competencies

While specialized technical skills are essential to many job roles, foundational and soft skills are the most powerful currency. These skills prepare employees to contribute on a level that goes beyond robotic performance of their jobs and enables creativity and collaboration. Most importantly, they remain useful no matter how much technology changes. Essential soft skills include:

  • Communication - Perhaps the most fundamental of all workplace skills, strong communication skills help employees interact with leadership, customers, and each other in a productive way.
  • Problem Solving - The essence of business is problem solving. New challenges pop up every day. Employees need to understand how to use resources to reach innovative solutions. 
  • Teamwork - Employees working together can achieve great things, but collaboration is a skill that must be learned. If your employees know how to resolve conflicts effectively, they'll get more done and feel more united as a team.
  • Planning and organization - Projects big and small require planning. By helping employees develop planning and organizational skills you make day-to-day work and special projects more efficient, which saves money and time. 
  • Integrity - Yes, integrity can be taught. When you train employees in how to do the right thing, you show them that your business values integrity. The trickle-down effect is huge, improving relationships among employees, leadership, and customers. 
  • Customer focus - Keeping the customer top of mind is not always intuitive. Employees need to build skills around anticipating customer needs, delivering what the customer wants, and evaluating their overall effectiveness in doing so.

While a bachelor's degree program could certainly teach employees any or all of these skills, a more focused approach can have faster results. The true value of any degree comes from the skills that employees learn while earning it. Focused training and development opportunities can help employees build these skills quickly and start applying them on the job immediately.

If you're going to create a checklist of standards that employees and new hires must meet, make sure that you're focused on the right standards. Look at skills learned over credentials obtained. Penn Foster's skills playlists are a great way to start, these customizable collections of courses help employees build foundational, technical, and career-specific skills. By combining competency-based curricula with career coaching, personalized messaging, and advanced analytics, we help employees amass the most valuable currency; useful skills.

Related Blog: How to Grow Employees for Success