The Employability Paradox
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.