Building the skills and capabilities of your workforce

The COVID-19 pandemic, and changes to UK immigration rules, have both significantly contributed to the challenges that many employers are facing with regards to recruiting and skill shortages. At the time of the pandemic, many businesses needed to re-prioritise tasks and focus on how the business could survive the period of uncertainty. Naturally, it meant that investing in the training and development of the workforce was either extremely limited or discarded entirely.

The pandemic however also led to many people leaving their employment (known as the ‘great resignation’).  The pandemic triggered people to take early retirement, or people needed to leave their employment to care for a vulnerable family member, or they were forced to leave through ill health, arising out from COVID-19.  The UK workforce lost many workers and inevitably valuable skills and capabilities.

The pandemic also came at a time when the UK left the European Union and the end of the free movement of people.  Those sectors that relied on EU nationals to fulfil roles, typically health and social care and hospitality, had to address how they would continue to fill their roles when current employees were required to return to their home country, unless of course they had applied to the EU Settlement Scheme.  Overall, this was a challenging time for skills and resources for all businesses, but perhaps more so, for those that particularly relied on recruiting from overseas.

Many employers struggled with the development of their workforce:

  • New starters who joined during the pandemic did not have the same induction and onboarding process due to social distancing measures and the directive to stay at home, which limited their learning and overall onboarding into the business.
  • Young people fresh out of university and college were unable to find employment and have therefore not had the same opportunities to learn in the workplace at this pivotal stage in early adulthood.
  • Businesses had to re-prioritise finances leading to learning and development plans being pulled, and either putting on hold employee training, or changing it drastically to ensure it could be achieved in a socially distance way; but with limitations.

In our most recent SME survey, SME business owners reported that the second most important aspect of people management for 2023 was employee capability, which scored just under half of the votes (44%).

How do you build skills and capabilities in the workforce?

It is fair to say, that the world of work is very different now to pre-2020. There is more remote and hybrid working; employers can recruit from almost anywhere in the UK; technology and AI are evolving at significant rates; and what employees look for from their employment has changed, with the increasing demand for four-day weeks or at least flexibility in how they complete their work.

Consequently, this context in which organisations now operate, coupled with the skill shortage in the UK, requires employers to re-examine their learning culture to ensure that they can attract and retain the best talent. and within an organisation needs to reflect the context in which they operate now.

Before identifying the measures you plan to introduce to help build the workforce skills and capabilities, there needs to be an element of strategic planning. You need to know the current skill set within your organisation and the organisation’s business plans, to then determine the gaps and what is needed for the future success of the business.

Setting out a clear strategic plan for how the company will get from where it is now, to where it needs to be in terms of skills and capabilities, requires a clearly defined strategic people plan. You can read about how to create one, in our article ‘Creating a People Plan for 2023’ and download our free People Plan Template.

An effective people strategy should address all areas of the employment lifecycle, including learning and development. Having a standalone learning and development strategy though will be beneficial as this would provide the detail about what, when, and how. So, if you don’t currently have one, we would certainly recommend this being the starting point for addressing your challenges.

Learning Culture

At the forefront of any learning and development strategy is to focus on creating a learning culture.  The learning culture is the environment you want to operate that encourages and supports continuous learning.  It is supported by company values, policies and workplace practices (such as appraisals, probation periods, and training needs analysis).  Together, these support a culture of growth mindset, knowledge sharing and an eagerness for self-development which ultimately leads to staff engagement, retention and enhanced individual and organisational performance.

In 2023, LinkedIn Learning published their Workplace Learning Report ‘Building the agile future’.  Significantly, it identified that 93% of employers were struggling with employee retention and that the most common factor people considered when changing jobs was the need for opportunities for learning and career growth.

In the publication, it also reported that:

  • The skill sets for jobs have changed by around 25% since 2015. This number is expected to double by 2027.
  • 89% of learning and development professionals believe that proactively building employee skills will help to navigate the evolving future of work
  • The 10 most important skills needed by organisations include:
    • Management
    • Communication
    • Customer service
    • Leadership
    • Sales
    • Project management
    • Research
    • Analytical skills
    • Marketing
    • Teamwork
  • 82% of global leaders agree that the HR function is more critical now than it has ever been
  • 93% of organisations are concerned with employee retention and believe the number one factor to improving it is through providing learning opportunities.
  • Opportunities for career growth within the organisation was the fourth top factor why employees considered leaving
  • Opportunities to learn and develop new skills were the fifth top factor.

Using technology to close the skill gap

Artificial Intelligence (AI) has emerged as a transformative technology that is rapidly reshaping various industries. It can enhance an employee’s learning and development within an organisation if it is introduced correctly.

AI-powered platforms can deliver tailored training programs and suggest learning resources based on individual employees’ needs and career goals. This facilitates continuous learning and professional growth which is specific and appropriately targeted to everyone.  It can ultimately help an organisation to address any skill gap.

AI needs a careful introduction into any organisation, you can learn more about this in our recent webinar on AI.

Consider offering training programs and upskilling opportunities to help employees transition to using AI technology or to acquire skills that complement AI technologies.

How you can boost employee capability

Performance Management Systems

Performance management can be best described as a process which helps you to manage the performance and development of individuals to achieve optimum levels of organisational performance. To be effective, a performance management system needs to have the commitment of the senior team and be aligned to strategic priorities, the business and people plan. Managers also need to take it on board as they will be largely responsible for implementing the system and bringing about a culture of continuous improvement.

Performance management systems should cover:

  1. methods by which you can improve the performance of employees to optimise effectiveness.
  2. development plans so that staff can develop their skills and capability in areas which will benefit the organisation.
  3. a process for managing poor performers.

Performance management systems can be time-consuming to develop and implement, but once embedded, can have significant advantages, such as:

  • high performance individuals can be developed to fill key positions – this is useful for succession planning.
  • all staff will have the opportunity to develop within their own roles and progress their careers, which will provide motivation, job satisfaction and, therefore, aid retention.
  • staff who are under-performing have an opportunity to improve prior to disciplinary action being taken and see improvement as the outcome rather than just penalties.
  • talent can be clearly identified, as well as otherwise unknown aspirations of employees which can then be developed.
  • providing the tools to ensure that you have the people with the right skill sets and the ability to give added value to your organisation.

A performance management system that is aligned with strategic direction and is implemented throughout the organisation will provide you with the basis for the development of all staff, whether they are high achievers, middle-of-the-road performers or poor performers. It will identify talent as well as abilities and aspirations which can then be utilised and developed in line with the long-term goals and aims of the organisation.

This is the foundation for building the skills and capabilities of the workforce and is pivotal to the organisation’s future success.

Appraisal process

A fundamental part of any performance management process is to have an Appraisals system.

An appraisal process helps you to set targets and provide direction for your employees, to improve their performance and ensure they understand how they contribute to the organisation’s performance and objectives.

They also help you to motivate and retain your employees. Many people change jobs because they feel frustrated that they are not being developed, have nowhere to go and/or are rarely given feedback or encouragement.  Introducing an appraisal process allows you to have structured and specific discussions regarding your employees’ performance, future career aspirations and to help you treat your employees fairly and consistently in supporting their training and development needs.

Training needs analysis

Another fundamental part of an effective performance management system is to have a way in which the organisation can identify training needs.  This typically forms part of the appraisal process but can be undertaken at any time.

To fully assess training needs and build up a training and development plan, it is important to identify the key competencies and performance indicators for each role within the organisation. Employees can then be measured against these KPIs and any under-performance identified.

Reviewing against competencies will also identify those who regularly overachieve and could be developed further into more senior or diverse roles, if the structure allows. In this way, you can gather all the training and development needs of your team into a training and development plan and prioritise them.

Training needs exist where there is a gap between the knowledge, skills and attributes required and those already possessed by your employees.  It doesn’t just apply to an individual, it arises at both departmental and organisational level.  For example, new legislation may affect the industry in which your organisation operates and needs for company wide, or you may wish to introduce the use of artificial intelligence (AI) to streamline processes.

All training should be tied into helping deliver your strategic objectives. You may consider a SWOT analysis for this.  Weaknesses for example can be rectified through training; strengths can be consolidated. Opportunities need to be balanced against costs (including training costs) and threats can be minimised by identifying areas where training could improve the performance of your employees.

When carrying out a training needs analysis, whether this is at organisational, departmental or individual level, consider…

  1. What skills, knowledge and experience are most important for your employees to fulfil their roles now and in the future?
  2. What skills, knowledge and experience are most urgently needed? Consider what is needed to fulfil the basic requirements of the post and what changes, new projects or strategic developments are coming up and when so that account can be taken of the length of time it will take for the employee to be fully competent.
  3. Are any employees being held up by a lack of simple skills or basic knowledge and understanding? How dependent are their jobs on the skills they lack? Consider also how their lack of skill may impact on other employees’ roles, especially those in supporting functions such as IT and HR.
  4. Having considered the organisational, departmental and individual training needs, think about the likely return on effort for both the individual and the business. Will the time and money invested in the training provide the appropriate rewards (more efficient practices, higher standards of work, compliance with legislation, more fulfilling role, better employee retention etc)? Also think about the consequences of not providing the training.


Building skills and capabilities is also crucial during the first few months of a new starter’s employment with you.  An employee’s experience during their first six months is vital to employee engagement, morale and ultimately retention.  If an employee feels as though they are not being effectively inducted into the organisation, or their development needs are not being met, it will lead to frustration.

Whilst a recruitment decision may have been made knowing that the candidate is the best suitable for the role given their skills and experience, there is still an important need to provide them with the training and development in learning how the organisation operates, the sector in which the role operates and any technical training on your IT systems.

Company inductions are also a key part of the overall onboarding process, but not the only tool.  Having a probation period in place is also a vital tool for assessing a new starter’s progress in their role and exploring where there may be further training requirements.

There is no legal requirement to have a probationary period, but such periods can be of help in the following ways:

  • encouraging a focus on integrating a new employee into the business
  • providing a formal period of performance review and training so that the employee knows how well they are doing
  • motivating the employee by increased pay or enhanced benefits once the probationary period is successfully completed
  • allowing for shorter notice periods on either side, if either party feels that the role is really not working out as foreseen.

Line Management Training

Every organisation needs policies and procedures and effective line managers for ensuring they are applied consistently and fairly.  HR policies are in place to help managers deal with misconduct amongst their employees, and to enable employees to air and resolve any issues in the workplace, yet it takes a skilled manager to get them right.  They also ensure that the organisation is protected from risk of a tribunal claim.  Ensuring your line managers have the right skills and capabilities is vital and should be in receipt of regular line management training throughout their career, and not just as a one-off exercise at the outset.

Line managers need more than technical skills and capabilities for managing people they also need to have the right soft skills in being able to carry out the many employment practices, interviewing, carrying out appraisal, holding probation meetings, and so soft skill training should form an integral part of a line managers development within your organisation.

Quiet hiring

‘Quiet hiring’ is a new term used to refer to an organisation leveraging the capabilities of its current workforce to acquire new skills and therefore avoid the need to recruit externally.  This is an effective way of overcoming the current challenges with the labour market and seek out the skills and capabilities from within your own organisation.

It can be a more efficient way to recruit and can help you to identify qualified candidates from a pool, who already have a good understanding of the business.

You would want to have in place a framework for how you would approach this method, to ensure fair, ethical, and transparent treatment of all employees.  If you have an appraisal process in place, with personal development plans, then the business will already have an idea as to potential talent for new opportunities.  If not, then it is about finding a fair and reasonable way in which to identify talent and then a screening process to recruit.

Leadership development

“Leadership” means different things to different people and in different organisations.  It could be to get others to follow, or getting people to do things willingly, or simply inspiring and influencing other people.

Some people are ‘born leaders’ whilst for others this skill needs to be nurtured and developed. Leadership doesn’t need to be at a high level and today, leadership is more about motivating and influencing, winning the hearts and minds of others, rather than controlling or commanding.

Identifying and developing those with leadership skills potential is critical to business success. We cannot assume that just because someone is good at their job, that they would make a good leader. Not all leaders behave in the same way either, however it is agreed that there are certain attributes that most leaders possess to develop loyalty and trust. The Chartered Institute of Personnel and Development (CIPD) the professional body for human resource management and training and development list the following:

  • General intelligence: to make sense of the complexity and difficulty of the task.
  • Technical or professional knowledge and competence in their fields: this is often the bedrock of respect for leaders but is never enough.
  • Personality: leaders should be energetic and committed, maintain contact with their people, and understand their strengths and weaknesses.
  • The ability to inspire: this quality may be rarer than some of the others and is perhaps the most difficult to develop.
  • Listening, sharing, and delegating skills (and not interfering unnecessarily): in groups of more than around five people it becomes impossible to know all the necessary detail.
  • Self-knowledge: to understand their own strengths and weaknesses, which in turn will enable the leader to turn to others in the group to compensate for any biases or deficiencies.

Not all organisations are structured to accommodate leadership programmes, or introduce succession planning.

Leadership skills can be tested in recruitment situations, especially where assessments are carried out as part of the selection process, or during employment, as part of the appraisal process and training needs analysis.

Blended learning

Blended learning is an approach to training and development that combines more than one way in which to develop the skills and capabilities of your workforce.  This has the advantage of lowering training costs, which is crucial during the current financial crisis.

So apart from training and development in the traditional form of a classroom (or virtually).  It can also take place in the form of…

  • On the job training
    • This is a type of training that occurs while you are working. It can be informal, such as learning from a more experienced colleague, or it can be more structured, such as attending a training course that is specific to your job.
  • Mentorship
    • This is a relationship between a more experienced person (the mentor) and a less experienced person (the mentee). The mentor provides guidance and support to the mentee, helping them to develop their skills and knowledge.
  • Coaching
    • This is a similar relationship to mentorship, but it is more focused on helping the mentee to achieve specific goals. The coach provides feedback and support to help the mentee to improve their performance.
  • Job rotation
    • This is a type of training where you are assigned to different roles within your organisation. This can help you to develop a wider range of skills and to learn about different aspects of the business.
  • Secondment
    • This is a type of training where you are temporarily assigned to either another department, or to another organisation. This can give you the opportunity to learn about a different industry or to gain experience in a new role.
  • Shadowing
    • This is a type of training where you follow an experienced colleague around for a period of time. This can give you the opportunity to see how they do their job and to learn from their experience.
  • Reading
    • This is a great way to learn new things and to stay up-to-date with the latest trends. There are many books, articles, and blogs that can help you to develop your skills and knowledge.
  • Online courses and webinars
    • There are many online courses and access to free webinars, that can help you to learn new skills and to advance your career. These courses can be self-paced and flexible, so you can fit them into your busy schedule.


Apprenticeships are Government backed training schemes that allow organisations to hire either someone new or upskill an existing employee to grow and develop talent.

For the individual, it enables them to earn whilst learning skills and are an effective way to encourage people to enter or return to work whilst gaining a qualification, with the potential to secure long-term employment.

The Government supports apprenticeships by giving businesses access to the apprenticeship levy. Large organisations with a pay bill of over £3 million pay into the levy a set rate of 0.5% of their total annual pay bill.  Employers with a total annual pay bill of £3 million pay only 5% of the cost of their apprenticeship training with the Government paying the rest.  The funds that this levy generates can be accessed by other employers to help them take on an apprentice.

Apprentices are normally employed on fixed-term apprentice contracts, with either a specified end date or termination upon reaching a set level of qualification. Generally, an apprenticeship should include an appropriate work-based qualification (such as an NVQ), a technical qualification (linked to the role), key skills (as such problem solving or communication) as well as any other qualifications the employer feels are relevant.

Adapting to news ways of working

Another significant development following the pandemic is the use of technology in the workplace.  Technology played a key role in keeping us together at a challenging time, but now that we are in an environment where hybrid working and the expectation of flexibility is growing, across all sectors, it’s important to keep your teams in touch and ensure that your managers can cope with new or different ways of managing staff and to adapt their styles to suit.  Training may be essential to support this new way of working.

We are also seeing new technology emerge, such as artificial intelligence (AI), which is a transformative technology that is rapidly reshaping various industries. AI refers to the simulation of human intelligence in machines that are capable of learning, reasoning, and problem-solving. As AI becomes increasingly mainstream, this powerful tool presents significant opportunities for employers to improve people management practices and enhance their business performance.

It has many applications, such as the ability to process language and generate text using models such as the now widely and publicly accessed Chat GPT. From virtual assistants assisting us in daily tasks to self-driving cars revolutionising transportation, AI has the potential to transform various industries and reshape the world of work.

While AI is often associated with automation and process optimisation, its potential extends beyond these realms. By understanding the benefits for both employers and employees, SMEs can gain a competitive advantage and maintain a modern and thriving business.  However, if it is to be introduced into the organisation there must be safeguards put in place, including the training and development of your managers and employees.  If not managed correctly, there can be data privacy and security concerns if data is not properly protected or handled, it can lead to breaches, leaks, or unauthorised access to sensitive information.  AI systems are trained on data, and if the training data is biased or incomplete, it can lead to biased outcomes. This can perpetuate existing societal biases or discriminate against certain groups, leading to unfair treatment or decisions. Employers need to be cautious and ensure that AI algorithms are fair, transparent, and regularly audited to address any biases and that human decision making remains central to any employment decision.  Hence the need for line management training.

We’re here to help

If you need help producing your training and development strategy, or if you’re looking to provide management training including ILM courses in your organisation, Contact Us for support.




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