Mid-market companies often operate in industries that have sustained disruption from automation and technology – manufacturing, mining, healthcare, to name a few. These businesses are the stalwarts of the American economy, contributing one-third of the country's GDP.
Undeterred by disruption and downturns, the tenacious mid-market continues to see technology as its best path forward. But embracing innovation requires a more specialized workforce, which costs money and takes time — two things the middle market is light on compared to large enterprises. Given these and other constraints, reskilling and upskilling are paramount to the recovery and expansion of this segment, which has been seriously impacted by the pandemic.
Analytics on tap for self-improvement
Data science reskilling may have the highest and quickest ROI for mid-market businesses. For one, online data science training courses and bootcamps are readily available from third parties. However, most mid-market companies cannot build an entire data science infrastructure around AI skills from scratch. Here's the good news — the analytics tools themselves, which at one time were too costly and complex for small and mid-sized businesses, are also now readily available. Most vendors offer training directly to customers, which can act as a further layer of reskilling for employees. But while these connected BI platforms have become easier to use, they are still sophisticated tools that require considerable know-how to leverage properly for business growth. This is why there needs to be a real, earnest investment by mid-market companies in reskilling or upskilling their employees on these systems. Once that's in place, data science can expose businesses to new lines of revenue as well as operational efficiencies.
Harvard Business Review gives the example of a furniture company that created a database to segment their customers into two camps – price shoppers and those loyal to the brand. They found that by focusing their marketing and sales efforts on their loyal customers, the company's profits surged. This is just one example of how marrying the right tools with a well-trained workforce leads to business development. Of course, this furniture company could have hired a data scientist to build this customer database, but for most mid-market businesses, going the in-house route is preferable to hiring specialists, given the cost and the prevailing attitudes about talent.
When people hear the term reskilling, they often envision a classroom setting, with dedicated days of coursework and training. In formal training, this is true, but there are other ways in which people learn at the office, both through informal and non-formal training. By respecting the value of all three of these types of learning, mid-market businesses can create a lasting culture in the workplace. Learning cultures lay a foundation toward a more productive and efficient workforce, which ultimately leads to higher wages for employees and increased revenue. This doesn't happen overnight, however. It requires a philosophical adjustment by business leaders, which is no small ask among these largely private, family owned, decades-old companies.
One way we at Zoho have attempted to create a learning culture is through our transnational localism efforts. By seeking out generalists living in underserved, often remote communities around the world, we've been able to encourage peer-to-peer exchanges of knowledge and training. Because so many of Zoho's employees were trained on the job, learning at work and exploring multiple areas of business and technology have become systemic and cultural at the company. We've been able to foster a training culture at the company because we're private and we value slow and steady growth, which is also true of many middle market companies.
Cost of training vs. cost of hiring
In 2019, Deloitte surveyed 500 mid-market executives, and 61% of respondents said they are reskilling their workforce, while 57% said they are redesigning jobs to account for positions lost to automation and technology. The mid-market is so bullish on upskilling and reskilling because unlike enterprise businesses, these companies are, according to some, majority private (85%) and can't access the capital required to hire specialized talent. The pandemic has hit the middle market hard, leading to layoffs and lost revenue, which in turn has accelerating the need for new technology as well as the employees trained to use it.
By certain estimates it can cost a business as much as six times more to hire from the outside than to build internally. In a depressed market, those savings at scale allow mid-market businesses to invest in innovation – tools like BI platforms – which can grow revenue. Middle Market companies are already keen investors in technology, and by saving both the time and money it takes to recruit from the outside, they can more quickly and efficiently adapt to disruptions in their industry.
Why reskilling works so well in the mid-market
Mid-sized businesses are beset with challenges that enterprises and small businesses don't experience. For one, they deal in complex, global markets that require powerful, scalable technology solutions, but they don't have access to the capital markets and get limited outside funding. Middle market operations still require specialized workers, but it can be difficult to compete on salary with large enterprises. But the mid-market finds a way, it always has. Taken together with their general resilience to industry disruption, these companies are perfectly positioned to take on new areas of expertise like data science, build out cultures of training and learning, and ultimately retain and retrain their existing employees to secure a better future for the mid-market.