The Em­ploy­a­bil­ity Para­dox

Finweek English Edition - - Companies & Markets -

IN A COUN­TRY with se­vere skills short­ages multi-func­tional com­pe­tence is re­quired, but the poach­ing of skilled staff erodes com­pet­i­tive ad­van­tage. In or­der to at­tract and re­tain tal­ented em­ploy­ees, or­gan­i­sa­tions need to of­fer more than just money – they need to of­fer chal­leng­ing roles and de­vel­op­ment op­por­tu­ni­ties. How­ever, in­vest­ment in an em­ployee’s growth and de­vel­op­ment also serves to make them more at­trac­tive to al­ter­na­tive em­ploy­ers and im­proves their chance of find­ing al­ter­na­tive em­ploy­ment.

Re­search un­der­taken by Louisa Sieber, an MBA grad­u­ate of the Uni­ver­sity of Pre­to­ria’s Gor­don In­sti­tute of Busi­ness Sci­ence (GIBS), ex­am­ines how em­ploy­ees can meet the needs of the knowl­edge worker while re­al­is­ing a firm-spe­cific com­pet­i­tive ad­van­tage through pro­tect­ing the firm’s re­turn on in­vest­ment in em­ployee de­vel­op­ment.

As life­time em­ploy­ment with one em­ployer is no longer rel­e­vant for many knowl­edge work­ers, em­ploy­ees are de­mand­ing more in terms of ca­reer growth. In many cases this is pro­vided by em­ploy­ers as the com­bined knowl­edge, skills and at­tributes of a com­pany’s hu­man as­sets are hard to re­place. On the other hand em­ploy­ees may then de­mand higher wages or leave, re­sult­ing in a neg­a­tive re­turn on in­vest­ment for the em­ployer. The risk is mag­ni­fied should the em­ployee move to a com­peti­tor, as the or­gan­i­sa­tion may ex­pe­ri­ence a di­rect threat as the ben­e­fit of their in­vest­ment is reaped by a com­pet­ing firm.

This risk is known as the ‘em­ploy­a­bil­ity para­dox’. How­ever, prac­ti­cal strate­gies on how firms are to de­velop knowl­edge work­ers to en­sure they be­come and re­main high per­form­ing em­ploy­ees whilst safe-guard­ing the firm’s ROI are not well-doc­u­mented.

Sieber’s re­search shows that com­pa­nies are aware of, and con­cerned about, the ‘em­ploy­a­bil­ity para­dox’. Many HR prac­ti­tion­ers, how­ever, are also aware of the need for an im­prove­ment in the over­all skills lev­els in South Africa, and un­der­stand that the ben­e­fits of the skills that the or­gan­i­sa­tion will im­part in em­ploy­ees will not nec­es­sar­ily be reaped by their firm, but will ben­e­fit the com­pany as a whole.

Em­ploy­a­bil­ity can be viewed as the dy­namic match­ing of the sup­ply fac­tors (in­di­vid­u­als) to the de­mand fac­tor (or­gani- sa­tions), fa­cil­i­tated by the hu­man re­source de­vel­op­ment in­stru­ments avail­able to them (in­sti­tu­tions). If man­age­ment wish to ob­tain a com­pet­i­tive ad­van­tage through their hu­man as­sets, they need to be cog­nisant of the in­ter­de­pen­dence be­tween the in­di­vid­u­als’ and the or­gan­i­sa­tions’ per­spec­tive. This in­ter­de­pen­dence must be in­cor­po­rated into strate­gies to man­age the em­ploy­a­bil­ity para­dox.

Sieber has mapped out a frame­work us­ing her re­search find­ings, prac­ti­cal ev­i­dence and best prac­tice, which or­gan­i­sa­tions could utilise in their strate­gies. Her aim is to as­sist com­pa­nies to cre­ate strate­gies which meet both the needs of the or­gan­i­sa­tion and the in­di­vid­ual.

While some firms may not pur­sue em­ployee de­vel­op­ment due to pre­fer­ring to pur­chase skills in the labour mar­ket when re­quired, bud­get­ing con­straints or re­quir­ing a min­i­mum qual­i­fi­ca­tion prior to em­ploy­ment, they still ac­knowl­edge the ex­is­tence of the em­ploy­a­bil­ity para­dox and be­lieve that in­vest­ment in em­ployee de­vel­op­ment will ul­ti­mately en­hance on-the-job per­for­mance.

The pri­mary rea­son given for em­ployee turnover was head­hunt­ing by com­peti­tors, with the secondary rea­son be­ing that the skills short­age in South Africa has cre­ated a de­mand for skilled em­ploy­ees. Re­lated to this, em­ployee dis­en­gage­ment is largely seen to be as a re­sult of skills and ca­pa­bil­ity mis­match.

Of the forty strate­gies that com­pa­nies cur­rently em­ploy to de­velop and grow their em­ploy­ees while en­sur­ing that the firm ob­tains a re­turn on in­vest­ment, those be­low have been found to be the most suc­cess­ful in meet­ing the needs of both the em­ploy­ees and em­ploy­ers: in to ei­ther a fi­nan­cial or time-linked work­back pe­riod for money spent on train­ing in­ter­nally de­vel­oped or de­vel­op­ing candidates brand as an em­ployer of choice in­ter­na­tional ex­po­sure to utilise and grow skills

re­straint of trade tal­ented em­ploy­ees who may re­turn to the firm in con­tact with those that have left with a view to ad­vis­ing them of po­ten­tial fu­ture op­por­tu­ni­ties grammes em­ployee fit in­ter­nal head-hunt­ing who have ob­tained learn­ing to make a dif­fer­ence in South Africa Key find­ings from Sieber’s re­search also show that the need for em­ployee de­vel­op­ment is nec­es­sary, but that in­vest­ment in em­ployee de­vel­op­ment is based on the firm’s life cy­cle, i.e. ma­ture firms are more likely to of­fer for­mal de­vel­op­ment pro­grammes.

- ages at present, ma­ture com­pa­nies may have no al­ter­na­tive but to de­velop the re­quired tech­ni­cal skills them­selves, i.e. in­vest­ment in em­ployee de­vel­op­ment en­hances on-the­job per­for­mance.

As in­vest­ing in em­ployee de­vel­op­ment not only re­alises a firm-spe­cific com­pet­i­tive ad­van­tage but also meets the needs of the knowl­edge worker, South African com­pa­nies may do well to ex­am­ine the suc­cess­ful strate­gies out­lined above in or­der to keep ahead of their com­pe­ti­tion in th­ese tur­bu­lent eco­nomic times.

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