For leaders in SMEs and scale-up businesses, building a world-class leadership team can be critical to fuelling success. But is it best to upskill and train staff from the shop floor or bring ready-made talent into the business? BLM investigates.
Any leader will know that to scale their business, the creation of a team around them that is able to drive growth is essential.
But is it better to build a leadership team by promoting staff up through the ranks, by bringing talent in, or through a combination of both?
Upskill or recruit?
Dragons’ Den star and prominent investor Sarah Willingham comments: “I think upskilling staff and creating leaders from within the business is important.
“By providing a clear progression path and showcasing what is possible, you can empower staff to grow within a business and become what they want to be in their careers. Those that make it to senior management from shop floor positions tend to be the best employees as they fully understand and appreciate the roles at all levels and can be great leaders for your business.”
However, this progression can be down to the individual and their willingness to embrace being taught leadership qualities.
Nicki Sahota, Head of People at restaurant chain Tortilla, says: “Upskilling your people is a win-win for the whole business. Having well-informed, high-performing teams creates better business results in both crew retention and satisfaction, as well as driving the top-line through greater role ownership and pride. Investing in employee development gives crew a sense of belonging and in turn they are more likely to return the favour.
“However, there are benefits to bringing in external talent as those additions can bring with them new ideas and different experiences.”
So, there are clearly advantages to both upskilling and recruiting to create the best possible leadership team.
Talent is hard to find
However, the real issues could lie in the current skills gap. For businesses looking to bring in leadership talent, it isn’t always easy.
Rob Perks from Inspire comments: “Most businesses are now citing difficulty with recruiting suitably skilled staff as the main thing holding them back from growth. The UK currently has record levels of employment and so there is a real dearth of candidates to fill vacancies.
“Enticing people away from their current employers is expensive and difficult, as they will look to hang onto good people by countering any financial incentive used to entice them away. More positively, training and developing your people is motivational for them, and encourages them to stay with you and offer a better experience to your customers through increased knowledge and skills.
“Bringing in ‘new blood’ from time to time keeps the business fresh with new ideas and approaches, but developing and promoting some staff to better paid positions motivates both them and other colleagues who can see there are opportunities for progression.”
What are the challenges with upskilling?
Many business leaders will be debating what the best course of action is, and with positives and negatives on both sides, it can be difficult to make the right choice.
But what are the main difficulties when developing leaders from within the business?
Sarah comments: “Time and money are usually the biggest challenges for staff development and building leaders. All too often we don’t have enough hours in the day to do our job never mind taking on a perceived luxury like training and development. This is where technology and external support such as leadership training programmes can potentially help.”
Nicki continues: “We need to ensure everyone gets the same growth and development opportunities and the biggest challenge is that one size does not fit all. We have to ensure each person’s journey is right for their individual needs and desires, while also fitting with our business objectives.
“However, with the help of our internal training team, we have the advantage of adding a personal or restaurant-specific touch to each training visit. Additionally, maintaining the skill level once training is complete is difficult. As well as regular top-up sessions, our focus is on developing leaders with the sole purpose of maintaining the golden standard.”
Keeping up with the skills gap
This focus on keeping up with education and training is vitally important. Research from the World Economic Forum found that 35% of skills that are considered important today will change in five years.
Clare Hindley, Group learning and development manager at Redrow Homes comments: “Upskilling staff is important because it ensures that they fulfil their potential and progress in their careers. In the case of Redrow, partnering with further and higher education providers, means that recruits are able to develop the aptitude, attitude and strategic nous that is required in the current business context.
“One of the ways we do this is through our partnership with Liverpool John Moores University (LJMU) and Coleg Cambria. Working together we established the UK’s first dedicated Housebuilding Degree, where students can combine their studies with working for us. Each module is delivered by a specialist in the field and is accompanied by a Redrow business expert to talk about the theory in practice.
“The three-year degree gives candidates a full overview of housebuilding skills; these include housebuilding quality, project management, health and safety, business skills, negotiation, right through to relevant aspects of law, mathematics and economics.”
For business leaders looking to develop their teams, Rob says that planning is key: “Upskilling can come in many forms, from formal training courses and programmes to on the job training from more experienced staff. The first and most essential thing is to have a training plan.
“This plan sits alongside the main strategic plan for the business and sets out what skills will be needed in order for the business to achieve its strategic aims and objectives.
“It will then break down into job roles and describe how any skill gaps will be closed. This will require research into the training support available, offsite training, onsite training, distance learning, online training and on the job training.”
Changing business cultures
There is also an argument that as we look towards a post-Brexit future, where the ability to access talent from other markets is uncertain, it is more important than ever to unlock the talent from within.
To do this, many businesses may need to also address the growing demand from the millennial generation, which will be 75% of the workforce by 2025. As is widely reported, millennials are disrupting the workplace by learning in a different way, getting to the point faster, working more flexibly and focusing on different goals.
This brings up a whole new host of questions, as before leaders decide whether to recruit from the shop floor or bring in talent, it may be best to think about how expectations of work are changing.