There is a huge skills gap in the UK, but instead of looking to solve it by bringing in new staff, companies need to consider the long-term investment of training their existing workforce.
We regularly see influential business people and economists speaking out against myopic strategies. In the last three months, we've seen CEOs Warren Buffett and Jamie Dimon call for the end of quarterly earnings guidance by companies.
They report that it puts pressure on executives to deliver earnings and prevents many doing things they otherwise may have done to future-proof their businesses. And the effects of this can be seen in the collapse of Carillion, or the many other organisations that are currently struggling to stay afloat.
While short-termism has been an issue on the minds of boards (John Maynard Keynes spoke about it back in 1936), it is currently one of the most significant boardroom issues we face in the UK.
It is easy to see how we got here. After the 2008 financial crash, organisations naturally battened-down the hatches, unable to execute long term strategies as they battled with immediate challenges.
It is true that global events, like Brexit and the introduction of GDPR, require reactive and immediate changes in strategy, but devoting disproportionate energy to the immediate future can make us less, not more, stable.
This approach, which initially arose through necessity has become habit, as the world around us changed more rapidly than ever before.
In a fast moving, increasingly automated world, it’s often very difficult to see what lies ahead. But we're not asking business leaders to be fortune-tellers. An organisation's ability to adapt to change lies in its people. Yet it seems that the short-termism in boardrooms is overflowing into people strategy.
If all organisations pay to bring in skilled workers from outside, rather than training existing staff, there will always be a deficit.
Organisations are currently spending £6.3 billion a year to plug skills gaps. Business leaders are spending more on salaries, recruitment and temporary workers because the skills they need to achieve their business goals are simply not available in the labour market.
But this reeks of short-termism - if all organisations pay to bring in skilled workers from outside, rather than training existing staff, there will always be a deficit, and one that will almost certainly continue to grow.
This is where lifelong learning comes in. Employers must focus on long-term people development, even when they are making immediate and pressing business decisions.
By setting up their workforce to be agile and flexible, organisations will have the skills they need to thrive in an increasingly uncertain business environment.
Introducing lifelong learning
Lifelong learning is the "ongoing, voluntary, and self-motivated" pursuit of knowledge. It’s almost universally agreed that a commitment to continuing learning throughout life enhances social inclusion, active citizenship, and personal development. But it is also crucial in business.
In a rapidly changing corporate landscape, we need to be laying the groundwork that encourages the development of a more adaptable and flexible employee, able to cope with change.
This is real long-termism in business and successful firms will prioritise ongoing learning and development throughout an employee's career.
Apprenticeships are a good example of this. There's a fundamental misconception that apprenticeships are just for entry level positions or for school leavers.
Successful firms will prioritise ongoing learning and development throughout an employee's career.
But apprenticeships can support an employee wherever they are in their learning journey - from traineeships and intermediate apprenticeships right up to higher and degree level.
Programmes like our own Senior Leader Master’s Degree Apprenticeship help senior leaders understand: how to shape organisational vision, culture and values, understand organisational structures; business modelling; diversity; global perspectives; governance and accountability.
In line with the dangers of short termism we’ve already explored, courses at this level can help leaders understand new market strategies, changing customer demands and trends and helping them to make the right decisions (be they short or long term) for their business.
Strategic importance of a learning culture
Of course, it is imperative that development programmes dovetail with organisational growth objectives and are viewed as more than a ‘tick box’ exercise.
Linking work-based training with an organisation's strategic goals and objectives can significantly improve business performance and, importantly, develop an organisational culture that nurtures innovation.
But for this approach to be fruitful, employers must accept that the internal teams responsible for recruitment, training and rewarding staff are strategically important in the formulation and implementation of the organisation’s plans.
It is imperative that development programmes dovetail with organisational growth objectives.
Training and development, whether it's delivered by internal or external providers, must change its image as “cost centre” to that of a “strategic business partner”.
The most savvy companies know that competitive advantage can be achieved through its skilled, committed and well-motivated workforce, but can only happen if learning and strategy are aligned.
Development planning is important too - the process of analysing and identifying the need for and availability of training so that the organisation can meet its objectives, not just now, but in the future.
Forecasting and succession planning is important and effective planning can even reduce turnover by keeping employees apprised of their career opportunities within the company.
Prepare for the future
So the dangers of short-termism in business are well known. It might not always be a bad thing to make immediate business decisions, the risks of short-termism are realised when it comes to learning and development.
While schemes like the Apprenticeship Levy may provide urgency and impetus to revise corporate learning strategies, this must not engender a short-term approach.
Instead, we urge organisations to appreciate that developing a culture of lifelong learning is essential to ensuring that employees can develop their skills as they work longer and deal with the rapidly changing technological, political and cultural climate.
This sustainable approach will help fuel loyalty and employee fulfillment, as well as helping to future-proof employers against a morphing business environment, by creating adaptable and agile workforces.