Learning, development and ’The Great Resignation’
The world of work has changed dramatically over the past decade (and it’s set to change at an even greater pace, as we will come onto later in this report). When employees feel unheard or undervalued, they’re now more empowered to leave their roles than ever before. In what economists are calling ‘The Great Resignation,’ 38% of people in the UK and Ireland plan to leave their roles in the next six months to a year3.
With this in mind, a lack of sufficient learning and development and upskilling opportunities may impact recruitment and increase employee attrition rates, and HR DMs are inclined to agree.
Almost a third (32%) believe that L&D shortcomings are resulting in increased attrition rates, with the average increase estimated at 14%. Additionally, 20% believe they’re resulting in reductions in productivity, with an average estimated decrease of 13%.
Shockingly, nearly a quarter (24%) of HR DMs believe L&D shortcomings over the course of their organisation’s history has resulted in restricted business growth, with an average estimated reduction of 14%. The cost of this lost growth dwarfs any potential increases in L&D budgets required to offset the damage and calls in to question historical trends towards year-on-year pressures on L&D spend. It is most likely a false economy.
According to a Glassdoor study, the average employer spends approximately £3,000 and 27.5 days to hire a new worker4. With an estimated increase in attrition rates of 14% amongst 20% of UK businesses (those highlighted as having an issue by our sample of HR DMs) using January 2021’s labour force figures of 28.3 million5, insufficient L&D strategies costs the UK economy approximately £2.43 billion in direct rehiring costs alone.
The estimated productivity loss resulting from L&D shortcomings is almost 2 GDP/hour. In reality, the overall impact is probably much worse, as this fails to take into account the compounded effects that L&D shortcomings may have alongside greater tech adoption. Either way, it’s abundantly clear that addressing this L&D problem is key to removing barriers related to the UK’s productivity crisis.
The 14% estimated reduction in organisational growth would represent an estimated £42.1 billion in lost growth opportunities as a direct result of L&D shortcomings (based on the UK’s annual GDP6).
3BBC, 2021, https://www.bbc.com/worklife/article/20210629-the-great-resignation-how-employers-drove-workers-to-quit 4Glassdoor, 2020, https://www.glassdoor.co.uk/employers/blog/calculate-cost-per-hire/ 5ONS, 2021, https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/february2021 6ONS, 2020, Gross Domestic Project, https://www.ons.gov.uk/economy/grossdomesticproductgdp
While there are of course other factors to consider, such as the pandemic, organisational change and staff burnout to name a few, HR DMs believe that the cost to business of this underinvestment and ineffectiveness of L&D is substantial. At a time of massive economic upheaval following the Coronavirus pandemic, the temptation of C-suites to cut ‘nice to have’ non-core functions (as L&D has often unfairly been perceived to be) is always great. But the emphatic message emerging from the research is that investing in learning is of strategic importance to organisations.
Fortunately, there already appear to be some positive changes emerging in the fallout of the pandemic.
