Why business leaders must invest more in people
Reskilling the workforce for the future labour market could be one solution to the current job crisis, say UNSW Business school experts.
Published on the 15 Jun 2020 by Victoria Ticha
Investing in your employees post-coronavirus could be the smartest business decision you can make. Image: Shutterstock
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The level of underemployment and underutilisation of labour is now higher than during either the global financial crisis or early-1990s recession. The government's stimulus packages, including JobKeeper and JobSeeker, are set to end in September. Some experts have warned that such a hard end date to the coronavirus stimulus could sink the economy.
Given that the prospects for an increase in job vacancies in the foreseeable future are not very bright, the government must continue its stimulus program past September, warns Raja Junankar, Professor of Economics at UNSW Business School.
“In particular, it should introduce a job guarantee scheme for all long-term unemployed workers. It should invest in public housing and in renewable energy projects. Training schemes would only be of marginal help as few employers would be looking for newly trained employees,” says Prof. Junankar.
Nevertheless, even in times of deficit and economic crisis, it is essential to continue investing in people and to set money aside for training their employees, says Karin Sanders, Professor of Organisational Behaviour and Human Resource Management in the School of Management at UNSW Business School.
“Earlier research shows that organisations – despite a crisis – who continue to invest in their people become stronger and more competitive after the crisis in comparison to organisations who terminate their investments in training their employees during the crisis,” says Prof. Sanders.
“The investments are paying off in terms of position on the market since their employees are better ready for new adjustments. Individual employees can also take responsibility for their training and invest time (and, if needed, money) to attend training.
Technology and online learning platforms could be better utilised by employers in reskilling and educating staff. Image: Shutterstock
Employers must continue to invest in people
“As the COVID-19 crisis has shown many of the old methods of working have changed completely, and policies of social distancing make it more difficult to predict what area of work will continue [but] one of the changes that have taken place has been working from home: this is going to lead to a greater demand for workers with skills in computers,” says Prof. Junankar.
What can business do to ensure their workforce is not underutilised and prepared for the changes to come?
Under these circumstances, it seems complicated to see how the new bodies being set up by the government to modernise the industrial relations system would get agreement between the employer's organisations and the unions. Yet, there is a desperate need for a complete overhaul of the system.
“It would be easier to introduce changes in the industrial relations system if people believe that they are being treated fairly,” says Prof. Junankar.
So beyond stimulus measures, employers must continue to invest in their workers, ensuring they are fit for whatever changes are to come next. "Investing in your workers can vary from a very cheap web seminar to a more expensive face-to-face training,” explains Prof. Sanders.
“Employees can also learn from informal training like keeping up to date with their professional literature, experimenting in their work, knowledge transfer, and providing and asking feedback from colleagues. All these activities are not heavy in investments in terms of money but are in general more productive in comparison to formal training,” she adds.
In the bid to ensure reskilling opportunities, Prof. Sanders suggests three key considerations for employers:
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Employees have access to formal and informal training – this does not necessarily have to be expensive
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HR is in the lead and that senior management is not in panic (or stressed) when making difficult decisions. It needs to show that it has expertise in how to handle this kind of situation.
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HR and senior management's communication with employees is distinct, consistent and consensual – three key elements derived from an attribution theory developed by social psychologist Harold Kelley in the 1960s – then they can understand the intentions of management better.
Read the full story at the Business Think website.