What is learning and development, and why the need to forecast it?

AIHR defines learning and development as a systematic process to enhance an employee’s skills, knowledge, and competency, resulting in better performance in a work setting.

Specifically, learning is concerned with the acquisition of knowledge and skills.

Development is the broadening and deepening of knowledge in line with one’s development goals.

According to a poll by Lynda Gratton on LinkedIn, only 50% of employees know the skills they need to do their job in the next 5 years.

Source: LinkedIn/Lynda Gratton

There is no denying that L&D is essential for both employees and organizations. In most modern workplaces, employees need to continually learn and improve their knowledge and skills for the future. 

So, here comes the crucial question:
How do we know that our L&D strategy aligns with what is needed for the business to thrive in the future? 

This is where forecasting comes in. 

Forecasting is the process of mapping out the organization's future competency requirements that impact employees’ learning and development.

Much like how we would forecast the weather or the stock market, it's crucial for us to plan ahead in growing our workforce, not just in numbers, but also in capabilities.

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This article covers the information you need to do forecasting right. It will help you to identify what competencies each employee needs for the future as the first step for effective L&D.

Defining competencies: Knowledge, Skills, and Abilities (KSAs)

L&D (and hence, forecasting) focuses on three key areas: Knowledge, Skills, and Abilities - abbreviated KSAs.

KSAs are the cornerstones of L&D. Therefore, it is imperative to understand what they are so that stakeholders have a shared language to explain what the employees must have in the future for organizational performance.

Here’s what each of them means:

The KSAs, commonly referred to as competencies, are areas where the employees can further grow or develop. 

Competencies are commonly used in the following situations:

• Hiring and internal labor movement: Determining if an employee has the necessary skills and knowledge to perform effectively in a future position.

• L&D: Determining an employee's need for L&D by contrasting their existing competencies with those that would lead to higher performance or effectiveness.

Prioritize on improving human capabilities or risk becoming redundant

"77% of business executives agree their organization should help their workers become more employable with relevant skills, but only 5% strongly agree they are investing enough in helping people learn new skills to keep up with the changing world of work."

- Deloitte Insights

The pandemic was one event that greatly disrupted many aspects of work, ranging from location to developing competencies.

However, there are many more events that can disrupt a business, especially one that isn't prepared for the future.

A good, familiar example of this is Kodak. While celebrated for its quality photography products in the 20th century, the company failed to diversify into the booming digital photography market, leading to its bankruptcy in 2012. 

Nowadays, technologies like OpenAI's ChatGPT might create another wave of disruption with its human-like chatbot capabilities. 

The World Economic Forum predicted humans and machines will spend equivalent amounts of time doing existing workplace duties by the year 2025. These disruptions not only affect businesses at the macro level, but also specific jobs and skillsets.

Let’s look at an example of how some competencies are becoming more relevant or redundant for certain jobs - and not only limited to those in tech-related jobs. 

• From 2016 to 2018, jobs like computer user support and web development had less demand for people with Java skills. But people with Java skills are in higher demand for jobs like Information Security Analysts. 
• Between 2007 and 2018, computer operators had the most frequent displacement rate. Two more jobs that are going away are those of telemarketers and legal secretaries.

Most of the time, disruptions in the workforce happen faster than efforts to help the people affected by them. This is especially true if businesses only respond to patterns that have already been found instead of trying to figure out what will happen next.

By acting this way, companies would lose their competitive edge, pay more for human capital, and suffer from lower employee productivity because they would be worried about their jobs. 

Therefore, to future-proof the organization and stay ahead of the tech disruptions, companies must plan for a solid workforce L&D moving forward. 

Who's responsible for learning and development?

If you're wondering who's responsible for developing employees' future-ready skills and competencies, chances are that the first thing that comes to your mind is the talent development or L&D function.

Leaders and managers are also crucial stakeholders here. Leadership consultant Al Dea shared 5 different ways leaders and managers can support their team members' growth and development.

Dave Ulrich, a leader in human capabilities, shared a validated human capability framework that depicts the accountability and relationships between different stakeholders in an organization.

When it comes to forecasting for skills of the future, here's a general guideline for the responsibilities and accountabilities of each stakeholder: 

Leaders

• Establish how the company will go from where it is now to where it needs to be in order to accomplish its objectives.

• Identify potential problems that might develop in the future and plan accordingly.

• Be aware of industry changes and advancements, as well as broader social and technical shifts that might affect your company.

• Work together with the L&D function to synchronize the organization's important future competencies.

Managers

• Keep abreast of changes in your industry and field and those pertaining to your work.

• Communicate the team's existing competencies and any noticed gaps in the L&D function to help them remain relevant and achieve future success.

• Determine the competencies their team will need in the future to succeed

Best practices in forecasting for future competencies

In this section, we'll go into several best practices that may assist leaders, talent and L&D professionals, and managers in forecasting and addressing the skills of the future.

Forecasting for future competencies may be done on several levels.

1. On a global level

On a global scale, competencies and jobs may become irrelevant if a particular industry experiences a prolonged decline in demand.

The creation of displays using cathode ray tubes (CRTs) is a notable example of a technology that has been obsolete due to the development of liquid-crystal displays (LCD) on a global scale.

2. On a local/country level

Along with the technological progress taking place across the globe, employment and competency requirements also evolve accordingly across all countries. 

There may be variations in competencies and jobs demand depending on the nation's political, economic, social, and technological state. Countries like China, sometimes called the "factory of the world," continue to have a high need for Assembly and Factory Workers. 

An example is that, the World Economic Forum forecasts that Malaysia would need Emotional Intelligence, whereas other nations will value Analytical thinking and creativity.

3. On an industrial/sectoral level

Again, we anticipate a rise in demand for technology-related jobs and competencies in most sectors, but the specifics vary depending on the nature of the sector.

This is especially clear in the field of education. Even though this industry is not immune to digitalization, they still rely heavily on teachers for class materials.

In the education sector, there is a growing need for "Vocational Education Teachers," a job that has nothing to do with technology. Whereas in other industries, there is a growing need for tech-related jobs.

Another example is OCED's research on "Skills for the Future Health Workforce" focuses on core skills that are becoming more important for all frontline health professionals. This will help organizations realize the potential gains in productivity, employee retention, and job satisfaction.

4. On a job/role level

While forecasting at the global, local, and sectoral levels are helpful for research, we must descend to the job/role level for developmental reasons.

Given the sheer number of possible job families, it will be quite difficult to make accurate predictions at this level. Still, resources like O*NET Online gives data that may be used for competency projections for a wide variety of jobs. 

Based on their categorization of jobs, they detail the necessary duties, abilities, knowledge, etc., for each position, with a new section on the most in-demand technical abilities for today's workplace.

This new section would be helpful in forecasting competencies, given that jobs are likely to be disrupted by technology. 

As discussed, organizations like the World Economic Forum have a number of tools that can help with forecasting. However, these resources may not be enough because there may be gaps in knowledge and skills, especially at the job/role level. 

But there are other ways to forecast future competencies, and some of them can help you find out things that are important to the local ecosystem of a single company.

Forecasting competencies entail a number of methods, each with its own advantages and disadvantages. These methods are distinct with respect to their data requirements and necessary technical expertise for forecasting L&D.

These approaches can be combined for a more comprehensive forecast.

1. Quantitative forecasting 📈

Many nations gather census data from their citizens and residents annually or quarterly.

From this data, we can guess how employment (and, by proxy, competencies) might change by looking at how people's jobs and credentials have changed in the past.

Time series is a type of statistical model that can be used to look at the data and help make predictions.

• Effectiveness of this methodology
  The accuracy of the data from the census and the forecasters' statistical and programming skills are two important things that affect how well this method works for forecasting.
• Technical requirements
  Since it heavily relies on data, the forecaster must have experience in statistics and programming along with expertise in modeling. 
• Strengths 
  This type of forecasting method is not only comprehensive, systematic, objective but also precise.
• Drawbacks
  The method requires large amounts of data, making it data-hungry and costly. Also, because not everything can be quantifiable, the method may give a false impression of precision.

2. Focus groups, roundtables, and workshops with experts 👥

Many nations gather census data from their citizens and residents annually or quarterly.

From this data, we can guess how employment (and, by proxy, competencies) might change by looking at how people's jobs and credentials have changed in the past.

Companies may want to Invite experts that know about certain competencies development to join group sessions. For example, experts in technological development may join the session.

The experts may come from inside a single organization if the intention is to understand the unique context of your business. Or they can come from across a number of different companies if your goal is to understand broader trends that may ultimately influence specific organizations. 

• Effectiveness of this methodology
  The findings from these sessions are representative depends on the pool of experts that were chosen, the interviewing skills of the forecasters, and the forecasters' ability to synthesize qualitative data successfully.
• Technical requirements
  Although this type of forecasting method has no special data requirements, technical expertise in qualitative data is a must. This includes expertise in preparing interview questions (structured and unstructured) and analyzing qualitative data since applying the findings to a new setting becomes a bit of a challenge
• Strengths 
  This method allows direct user interaction, helps you address problems in greater detail and offers a way to exchange views.
• Drawbacks
  It can often get non-systematic and subjective. The pool of experts recruited is likely to be small, which means the insights may be non-representative and partial. 
  
  

3. Enterprise and employee surveys 💼

These surveys can be designed to capture responses about the current competencies and gaps experienced. This can be done from two perspectives – 

1. Organizations: For instance, the Future Skills & Future Jobs is typically filled by HR or senior leaders. It offers insight into the skills expected to be most or least important by companies in the next 3 years. 

2. Employees: For instance, McKinsey surveyed 18,000 citizens in 2021 to identify 56 fundamental skills that will help people thrive.

In both (1) and (2), the survey could be sent to a number of different companies to learn more about larger trends that can ultimately influence any specific organization). But (2) can also be done on a single person or organization if the purpose is to understand your organization's specific context. 

• Effectiveness of this methodology
  It depends on how much information was collected, how representative the companies and workers who took part in the survey were, and how well the survey was set up.
• Technical requirements
  Since it involves surveys, you must be well-versed in survey design and conduct skills, including representativeness, weighting, questionnaire design, and interviewer training. Also, you must be competent in performing data analysis of the outcomes and ensure representativeness in the sample.
• Strengths 
  It lets users take part directly, and if the survey is accurate, it will focus more on how people act than what they think.
• Drawbacks
  Response rates are often low. Large samples are required to provide reliable data, which may be costly. Finally, it might be subjective and inconsistent.
  
  

4. Graduate tracer surveys ✍️

It sounds like a complex survey, but it's quite simple.

These surveys are sent out to track recent graduates with different levels of education through their careers and learn more about how they move between jobs, organizations, and sectors.

The results of these surveys will help us figure out how jobs and skills are changing over time.

It is possible that this survey will highlight trends across many firms. Hence, we may derive wider trends since this approach tracks a group or groups of graduates.

• Effectiveness of this methodology
  Since it involves a survey, you must be equipped with skills like survey design, conduct, and survey outcome analysis. Finally, it's important to ensure representativeness
• Technical requirements
  It depends on the amount of data gathered, the representativeness of the graduates who participated in the survey, and how effectively the survey was structured
• Strengths 
  It helps enhance the training program quality at relatively low costs.
• Drawbacks
  It's difficult to establish detailed information to form enough samples. Also, the finding may be biased and subjective since it is based on an employee’s initial experience. 

Competence forecasting for the future should be done often so you can stay up to date on the latest insights and trends. Remember, it's not an easy process and needs information and input from many different places.

Those who want to start this process may find it less scary if they follow our step-by-step guide, which collects all of the best practices and puts them in the order they should be done.

1. Leaders to align on business goals & needs

Even before the forecasting process can begin, there needs to be buy-in from the company's leaders that it is necessary to look inward and realize if the workforce is well-equipped to ensure the long-term viability of the business. This understanding must come before the forecasting process begins. 

After having everyone on board, the next step for leaders is to determine the direction for the business along with its objective. This will give them a better sense of the employee competencies required to reach those goals. 

For example, if an organization wants to grow quickly, it needs to focus on skills like innovation and strategic thinking. On the other hand, an organization that wants to be acquired should focus on skills like communication, collaboration, and managing change.

2. Managers to provide initial insights about their teams

They can comprehend the present level of their teams' competency since they oversee the performance of their team members. The level of insight deepens further when managers are empowered with AI-assisted tools.

For instance, a sales manager may conclude that their team is not meeting sales quotas. From their experience working with the team, they may conclude that the team members need improvement in analytical thinking.

This shows that there is a gap for the future competencies of the sales team, even if this wasn't the case while they were being employed. This would suggest that analytical thinking is a major area of concern.

These first insights will be useful in selecting jobs or competencies for action since it is difficult for an organization to examine and anticipate all relevant occupations and capabilities. 

3. Collect and consolidate information

The next thing to do is to summarize the research conducted by organizations such as the World Economic Forum or collect additional information through the methods mentioned previously (such as conducting focus groups with subject matter experts) or do both of these things.

The real forecasting process will use all of these different pieces of information as inputs.

4. Analyze the information and data to reveal trends

If we look at the data from the past, we should be able to see some indicators of the shifts that are happening in employment and competencies.

Keep in mind that although it is simpler to make projections for the immediate future (e.g, the next 1-3 years), it will be more challenging to do so for the more distant future (e.g., 5-10 years).

No matter how long the prediction horizon is, the forecast should be looked at regularly (e.g: once a year) to add new information and update the prediction. Forecasts for more than a year in the future shouldn't stay the same but updated as needed.

5. Finalize the list of jobs and competencies that will face changes in the future

The list of competencies and activities required in preparing for future competencies should be communicated with the entire organization.

In the context of employee development, it will be critical to identify:

• Which employees may be affected

• Whether or not they already possess the emerging competencies of tomorrow

• How to assist employees who may be lacking in certain areas in terms of transitioning and developing their skills

To make it easier to do L&D forecasting well, it will be helpful to have a list of competencies ready.

People on different teams might use different words to describe the same thing. Thus, it's always better to have one frame of reference to standardize the definition or scope for each competency.

This way, you and your employees can always refer to the same document when discussing or aligning on competencies to develop in the future.

The good news is, you don't have to create a list of competencies from scratch. Here are two sites that may be of use to you as you get started:

• The competency framework by IAEA

• The competency framework by OECD