Based upon a recent McKinsey Global Survey, nearly 9 in 10 (87 percent) of management and above level respondents affirmed they are currently, or within the upcoming five years, dealing with the skill gap among their employees. With the vast majority of businesses experiencing or forecasting a skills-gap, how can they close or reduce this challenge?
Due to the so-called “Fourth Industrial Revolution,” as the World Economic Forum (WEF) explains, the best scenario it sees is 54 percent of workers requiring “reskilling and upskilling by 2022.” However, the WEF points out that 3 in 10 workers susceptible to occupation disruption due to advancements in applied science obtained additional training in 2018.
It’s important to clarify the differences between re-skilling and up-skilling. Re-skilling is where workers who are displaced by industries becoming obsolete, such as coal miners, are forced to retrain for a new career, such as coding, teaching, etc. Up-skilling, in contrast, involves building and staying current in one’s field – a programmer learning the newest programming language or a marketing manager learning the latest search engine optimization (SEO) techniques.
Carve Out Skill-Improvement Time Blocks
Even for companies that strive to provide their employees with flexible time for a work-life balance, it doesn’t always guarantee companies foster a culture of self-improvement and upskilling. When personal, professional and/or global crises occur, there’s not always time for employees to learn new computer programs or the latest programming language. However, by providing employees with a few hours a week dedicated to professional development, businesses give employees the opportunity to up-skill, leading to more satisfied employees, along with limited strain on the budget.
Arrange Worker-Guided Study Groups
When it comes to learning a new skill, according to Degreed via Harvad Business Review (HBR), workers will go to their peers 55 percent of the time, second only to reaching out to their supervisor for guidance, when looking to up-skill.
Few businesses are known to have developed a system for peer-to-peer learning in the workplace. According to McKinsey, “Learning & Development officers” reported businesses letting their employees put their skills into practice to develop additional skills, along with holding academic-type instruction and “experiential learning” for developing role competency. When it comes to structured peer-to-peer learning, fewer than 50 percent of businesses have anything established. Thirty-three percent of those surveyed responded that there’s no system established to facilitate skills development opportunities between co-workers.
From HBR’s “The Expertise Economy,” one reason that peer-to-peer learning is not the first choice for employee learning is due to a common belief that those who are proficient at a particular skill often exist outside the organization, such as a paid training consultant. This belief also is reinforced due to external educational experiences normally condensed into a single session, compared to smaller and more frequent in-house sessions.
HBR argues that peer-to-peer learning leverages the business’ internal expertise more effectively. If more experienced employees share their expertise with less seasoned co-workers to increase their skills, it can be very productive. In fact, HBR lays out a four-point plan for peer-to-peer learning to maximize employee up-skilling.
By using HBR’s “Learning Loop,” businesses can help employees learn new skills and knowledge through four steps:
- Employees obtain new information.
- After assimilating the new information, they practice implementing the new information.
- After it’s been applied, they obtain feedback on the application.
- The employee then reflects on what has been learned to further assimilate the new information.
While this program must be tailored to every organization, it shows that by taking a personal approach to up-skilling employees and building on their existing knowledge and skill sets, peer-to-peer learning can be one effective approach to helping employers and their employees close the skills gap.
With the internet available for essentially all employees and remote work becoming a part of more businesses’ operations, developing a bring-your-own-device (BYOD) policy is almost necessary to help employees be more productive and safe while working. Research shows there are many reasons why businesses should develop the right type of BYOD policy.
According to Intel and Dell, 61 percent of Gen Y and 50 percent of workers 30 and older think the electronic devices they use at home are more capable in completing tasks in their everyday life compared to their work devices.
Frost & Sullivan found that connected handheld technology helps employees, making them about one-third more productive and reducing their average workday by 58 minutes.
A BYOD policy simply means that companies permit their workers to use their own smart devices to perform job-related tasks. It can be beneficial for a company, especially a smaller one; but it’s important to evaluate the advantages and disadvantages before implementing one.
One of the most obvious reasons for a business to develop and implement a BYOD policy is due to the proliferation of technology. Along with saving employers money by not having to provide a work device, there is no need to provide costly training on how to use the device. A 2016 Pew Research survey determined that 77 percent of U.S. adults have a smartphone. For those ages 18 to 29, more than 9 in 10 (92 percent) own a smartphone. In 2021, even more adults likely have at least one smartphone.
Potential Drawbacks/Legal Considerations
According to a 2017 Pew Research Center report, there’s a significant portion of smartphone users with less-than-ideal security habits. For example, 28 percent of respondents don’t secure their phone with a screen lock or similar features. Forty percent said they update their apps or phone’s operating system only when it’s convenient for them. Less common, but equally alarming: Between 10 percent and 14 percent of respondents never update their phone’s operating system or apps.
Without a proper system setup there are more security risks, including reduced or compromised company privacy and a lack of basic digital literacy among employees. Mobile Device Management software can help monitor, secure, and partition personal and business files in a dedicated area, providing more confidence when permitting employees to BYOD.
Other considerations for a BYOD policy might include prohibiting employees from downloading unauthorized apps; performing local back-ups of company data; disallowing syncing to other personal devices; not allowing modifications to hardware/software beyond routine installations; and not using unsecured internet networks.
Depending on how employees are classified by the Fair Labor Standards Act (FLSA) for overtime compensation, businesses may be liable for overtime wages if non-exempt employees perform their duties outside the office. If non-exempt employees perform duties beyond “40 hours of work in a work week,” as the U.S. Department of Labor outlines, businesses could be liable for additional wages paid if they use their device for work-related tasks.
While each company has its own needs and unique workforce, crafting a BYOD policy that increases productivity while maintaining security and privacy can give businesses a competitive edge.
Record shares of Americans now own smartphones, have home broadband
Many smartphone owners don’t take steps to secure their devices
According to the Bureau of Economic Analysis, consumer spending has seen some interesting trends over the first half of 2021. May was flat, April was at 0.9 percent, March was 5.0 percent, and February was at 1.0 percent. With varied consumer spending statistics as the nation comes out of the pandemic, it’s important for businesses to get demand forecasting as accurate as possible.
According to The University of Tennessee, Knoxville, demand forecasting is “a method for predicting future demand for a product.” It’s a calculated method to plan for inventory and helps prepare the supply chain for the future.
Demand forecasting helps businesses forecast their future sales, which is based primarily on historical data. However, relying exclusively on historical data is not generally recommended.
Historical data provides an incomplete picture because it does not factor in economic trends, seasonal ordering, or consumer behaviors. Multiple analyses are also recommended because young companies don’t have enough of their own data to perform such analyses.
It’s recommended to run through more than one method to forecast sales. It’s important to ensure that data is as accurate as possible and to consider factors beyond inventory. Such factors include how external players – shippers, material suppliers, etc. – will work with the company’s internal functioning.
It’s important to be mindful of the time frame of the different analyses. Short-term refers to the next quarter to four quarters (3 to 12 months) and helps businesses adapt to changes in consumer demand and market variations. Real-time sales data is used to manage just enough inventory. Long-term refers to at least 12 to 24 months, but sometimes 36-48 months, and is used for things related to the long-term business vision. Examples include creating a more reliable supply chain, capital expenditures, advertising campaigns, etc.
Similarly, demand forecasts run by a business can be done regarding intrinsic or extrinsic factors. External forecasts evaluate how the broader economy and systemic changes in commerce shifts future demand. Recommended indicators include exploring how many retail consumers spend, what they are interested in, and whether the economy is expanding or contracting. Internal demand forecasts look at the organization’s employee makeup and where and how the business can divert resources to help deal with additional capacity, if necessary.
Passive demand forecasting relies exclusively on historical data and is usually geared toward established companies with generally reliable sales histories.
Active demand forecasting is geared more toward startup businesses looking to scale and diversify their portfolio. It can be variable because it factors in changing trends of the fluid economy and how companies, especially startups, plan to accelerate growth. However, active demand forecasting also may be useful in order for businesses to work around fluid inventory and logistic network overview. Startup businesses are better geared for real-time demand planning, mainly due to a lack of historical data.
With the quantitative approach focusing on crunching data, oftentimes with complex “big data” processes, the qualitative method takes a more balanced approach with some data, but also cognitive-based analyses, including some of the following tactics:
- The salesforce approach gleans data from the sales staff to predict demand. Those doing sales are in direct contact with the company’s customer base; therefore, they can get info on customer needs and behavior and even report back on what the competition is doing.
- Market research looks at present market trends and sees where businesses can meet newly created consumer demand. Startups benefit because they have little or no historical data.
- The Delphi Method works by hiring an outside group of experts and asking them a series of relevant questions. From there, each expert creates a demand forecast based on their market knowledge. Then, the individual forecasts are shared among the experts anonymously. From there, experts are asked again to come up with a forecast; this is repeated until there is far greater consensus among all the experts.
While demand forecasting is individual to each company and each industry, the more businesses that understand the approach to demand forecasting, the more able they’ll be to react to any type of consumer trend.
According to a Prudential survey, 87 percent of respondents said they would prefer to work remotely at least one day per week. This is compared to 13 percent of respondents preferring to work at the office all the time. The same survey found that one-third of respondents wouldn’t want to work for a business that had a 100 percent on-site work policy.
According to a report from Microsoft titled, “The Next Great Disruption is Hybrid Work – Are We Ready?” 54 percent of employees report “feeling overworked” while 39 percent say they “feel exhausted.” The study attributes these employee feelings to an overload of “digital collaboration” through “remote meetings, emails, chats, and groups working on documents together.” With workers reporting a desire for change in the workplace, how can companies develop their own hybrid work policy?
Crafting an Effective Hybrid Work Policy
By developing the right mix of remote work and office work, employees and employers can find a balance that works well for everyone. Looking to Fujitsu, as Harvard Business Review (HBR) explains, we can study a model of how the pandemic changed everyone’s view – including owners, managers and workers – of working in the office all the time.
Hiroki Hiramatsu, head of the human resources unit at Fujitsu, realized that the 120 minutes people spent traveling to work could be put to better use. There was a better mousetrap to be devised to make both the business and its workers more efficient with a hybrid workplace plan. For businesses that want to create more flexible working arrangements, HBR believes there are four areas of focus:
1. Employee’s Position and Responsibilities
The first task is to examine the employee’s position and list of responsibilities. HBR looks at the job of a strategic planner and hones in on the attribute of focus. They are responsible for creating business plans and obtaining details on their industry. Requiring intense focus, they need time that is not interrupted; hence, this can be performed virtually anywhere.
Looking at the team manager, being able to coordinate things is imperative. Team managers are more efficient and effective in person to provide guidance and job-improving feedback while in the office working on projects.
While there’s no cut-and-dry call on where both of the scenarios could be done, with a hybrid work policy, certain tasks can be done anywhere, while other tasks are more effectively completed at home or at the office. A hybrid work policy merges the benefits for businesses and their employees.
2. Worker Inclinations
HBR explains that it’s imperative to understand individual worker preferences and aid teams to work within such preferences. Using the example of two strategic planners, there are different employees with different work and family lives. One lives far away from the office, has a busy family life with kids in school and prefers a hybrid work approach. The other employee is at an earlier stage in their career, doesn’t have a dedicated home workspace and lives near the office.
This stage is where companies can speak with employees and have them take surveys to see how a hybrid workplace policy can be constructed for optimal employee engagement.
3. Reworking How Work is Done
When it comes to working outside the office, HBR explains that in a hybrid work environment, businesses have to get creative, especially with technology. HBR uses the example of the Norwegian Equinor corporation that is involved in handling gas from North Sea fields. In place of normal operations for plant inspections, robotic devices were supplied to provide real-time visual data for inspection engineers to complete their jobs remotely with the same level of accuracy.
4. Equal Policy Application
Regardless of the hybrid policy that’s developed, it’s important to maintain inclusion and fairness. HBR points out that without applying the policy evenly, it can lead to less productive workers, higher rates of burnout, fewer instances of teamwork, and more turnover. Additionally, with select employees having time- and place-dependent jobs unsuited or not optimized for a hybrid workplace, many felt they were treated unfairly when this approach is taken.
HBR gives the example of how Brit Insurance changed the traditional approach to the uneven application of a hybrid work policy. One out of 10 of its employees were chosen randomly, from all departments and job roles. Over the next six months, these employees were put in six-person groups to work together virtually. After reflecting on their working styles and capabilities, and their coworkers’ and company’s needs, they concluded that by developing ideas based on their experience and sharing them with the CEO, change would occur. The project resulted in the Brit Playbook, documenting novel ideas for employees to work together.
While each business is unique and will have its own tailored hybrid plan, taking the time to learn how to develop it effectively it will help reduce problems in implementing it.
According to a Tufts University survey, six in ten of those surveyed are now vaccinated against COVID-19. However, almost 40 percent of the unvaccinated respondents said they won’t get the vaccine. Only 28.5 percent of the remaining unvaccinated respondents said they will get vaccinated against COVID-19 in the future, with the remaining unvaccinated respondents unable to decide whether they will take the vaccination. With vaccine hesitancy a concern, how can employers encourage more people to get the vaccine?
It is important to understand why some view vaccines skeptically in order to overcome vaccine hesitancy among employees.
The Johns Hopkins University Coronavirus Resource Center attributes vaccine hesitancy to these factors:
The first factor is safety. Since the vaccine was developed faster than most vaccines have been traditionally, many individuals are concerned about reactions, side effects and quality assurance. More can be read from the CDC VAERS Report.
The second reason has to do with the vaccine’s effectiveness, and how well it works against the coronavirus.
The other reasons for hesitancy are due to things like religious beliefs, vaccine phobias and current health issues of the unvaccinated.
This phenomenon is not isolated to the United States. Based on a global survey of 32 nations that Johns Hopkins cites, 98 percent of Vietnamese would get the vaccine, while only 38 percent of those in Serbia would get the vaccine once it’s available.
Navigating Vaccinations in the Workplace
Requesting a Vaccine Exemption Due to Religious Beliefs
Businesses that fall within the purview of Title VII (Civil Rights Act of 1964), must accommodate an employee’s sincerely held religious belief, practice or observance unless it causes an undue hardship on the business.
The CDC says that once a company is aware of a worker’s “sincerely held religious belief, practice or observance [that stops him from accepting the flu shot], the employer has to provide a reasonable accommodation [except if it causes] an undue hardship.” While this refers to influenza, the reasoning behind it applies equally to an employee expressing their religious objection to a COVID-19 vaccination.
Accommodations for Disabled Employees
According to the Equal Employment Opportunity Commission (EEOC), the Americans with Disabilities Act (ADA) covers employers in the private sector and state and local governments that employ 15 or more workers. The ADA offers guidance for employers when an employee requests to be exempt from a COVID-19 vaccination due to a disability. This Act says that employers are able to implement a workplace standard specifying that a person cannot “pose a direct threat to the health or safety of individuals in the workplace.”
If, however, this workplace standard either sorts out or will likely sort out a disabled person from meeting the workplace safety standard by being unvaccinated, the employer must demonstrate that such person without a vaccine would pose a direct threat of risk to another person in the workplace that cannot be reduced by a reasonable accommodation.
The Equal Employment Opportunity Commission (EEOC) believes a direct or proximate threat exists from the unvaccinated person through four tests: length of the danger, how severe and the type of harm that could occur, the chances of the potential harm that will happen, and proximity of the realistic harm.
When it comes to determining if a reasonable accommodation exists, the EEOC lists three criteria: the worker’s professional responsibilities, if there is a different job the worker could transition to in order to make the vaccination less necessary, and how serious it is to the company’s function that the worker be vaccinated.
How to Encourage More Vaccinations
The U.S. Chamber of Commerce cautions that employers who are contemplating mandating their workers take the COVID-19 vaccination, state law varies on how far they can go. However, a good way to get employees vaccinated is by encouraging and not requiring vaccination. Forcing employees to get the COVID-19 vaccination might make workers look for new employment or face a lack of motivation. Depending on the state laws, a vaccine mandate from an employer might lead to a legal battle if employees refuse to get vaccinated or in rare cases an employee dies from the vaccine.
One way to incentivize employees to get the COVID-19 vaccine is by offering them a cash payment to do so. Average incentives range from $50 to $500 with most being $100.
Based on recommendations from the Centers for Disease Control and Prevention (CDC), there are many things employers can do to help get their employees vaccinated against COVID-19.
One recommendation is to have management explain to employees why it’s important to get the vaccination by creating flyers, posters and other forms of communication when staff are entering and leaving the building.
Offering workers, the ability to get vaccinated onsite could encourage people who are on the fence, especially after they see their co-workers get vaccinated.
One part of the American Rescue Plan, which passed in 2021, as the Internal Revenue Service (IRS) outlines, permits businesses to claim tax credits if they give their workers paid time off to get vaccinated. This tax credit is eligible for employer reimbursement through paid sick and family leave. It also provides an employer tax credit if employees need time off to recover from any post-COVID-19 vaccine side effects.
Businesses with fewer than 500 employees are eligible for this tax credit for paid sick and family leave that occurs between April 1, 2021, and Sept. 30, 2021. This includes for-profit, tax-exempt organizations and some government employers. Self-employed taxpayers also are eligible for an equivalent tax credit.
Taking the time to encourage workers to get vaccinated, learning how to navigate certain aspects of employment laws and state laws, and making sure to maximize one’s business balance sheet are all essential tools to make the most of 2021 and set up an even better 2022 fiscal year.
Inflation is on the rise. According to a recent Economic News Release from the U.S. Bureau of Labor Statistics (BLS), the Producer Price Index for final demand grew by 1 percent in March. February saw “final demand prices” grow by 0.5 percent; and January’s final demand prices increased by 1.3.
According to BLS, the Producer Price Index (PPI) consists of many indicators and evaluates the mean difference over a period of time for the “selling prices received by domestic producers of goods and services.” In other words, PPI is a way to gauge how much manufacturers and similar businesses face in increased costs due to inflation.
This inflation gauge takes a broad survey of approximately 10,000 unique manufactured items and the amount of inflation businesses face. The BLS’ PPI measure looks at items produced by fisheries, food growers, miners, manufacturers, etc. It also includes 72 percent of production of the service sector, as the 2007 Economic Census found.
Hedging with Futures
One way to reduce risk is by hedging. A popular example is with futures contracts. Much like buying an insurance policy, futures contracts can reduce the impact of a negative event, such as a spike in commodity prices.
If a company is worried about the price of oil for their planes or coffee for their cafes, they can enter into a futures contract to buy a designated quantity of that particular commodity at an agreed-upon price, with the ability to exercise it on or before the expiration date.
With a futures contract, a company can better plan its budget based on the contract’s parameters and the cost of the contract. If the price of the commodity rises in the future due to increased demand or limited supplies, the business can save money by taking delivery of the particular commodity at the originally agreed upon price through the futures contract.
Since the goal of hedging is to protect against losses, it’s important to weigh the cost of the futures contract. If the price of the commodity falls for the above-mentioned futures contract example, the company would still be forced to buy the commodity at the contract’s price, which would be a poor investment. If, however, it sells the futures contract before its expiration to avoid receiving the physical commodity at a poor price, that would lead to a loss. Having a contingency plan to reduce losses in futures contracts is always a good part of a hedging strategy.
Negotiate with Suppliers
Much like businesses enter into specified timeframes with suppliers, companies can do the same with their purchased supplies to provide more predictable prices. When the PPI measurement is used, the purchasing company can contract with its supplier to settle on the initial product’s price, and how price fluctuations will be determined going forward. Since the PPI is released monthly, the price can adjust accordingly (decrease or increase, depending on the PPI) for the supplier and purchasing company. It can be re-evaluated every three, six or 12 months, for example.
While there’s no predicting the future and if and how much commodity prices may rise and impact businesses, the more tools that businesses have to mitigate increased costs, the more likely they are to survive rising inflation.