Talent management has long been one of the greatest challenges facing Middle Market companies. Not only do mid-sized firms typically lose out on quality staff to larger companies with established employer brands, they also struggle to retain staff due to less established company cultures and personnel management practices that have not kept up with the latest trends.

Now What?

More so than ever, Middle Market companies across all industries are struggling to find workers with the right education and skills to meet their needs. In Deloitte’s 2013 Report on America’s Economic Engine, 29% of executives from Middle Market companies in the professional services sector and 28% from the construction and engineering sector rated the skills shortage as one of the top obstacles to company growth. What are all these companies to do?

Many are looking towards training for the solution. Over half of the respondents listed training as a top priority for investment over the coming year. Compared to larger firms, mid-sized companies generally lack the resources to invest in what often turn out to be ineffective training programs. But with the growing traction of informal learning, they may not need to go down the traditional training path in order to close the skills gap. More and more research is being done on the benefits of informal learning in the workplace. So far, the results are encouraging.

What is “Informal Learning”?

Informal learning refers to the automatic learning that takes place on a day-to-day basis through doing, collaborating, and observing. In order to be successful in a workplace context, employees need to be conscious of their learning. They need to acknowledge that they’re acquiring new skills and increasing their human capital as they go about daily duties.

There’s Also Employee Engagement

Another correlation companies ought to be paying attention to is between employee engagement and organizational performance outcomes. The higher the degree of employee engagement, the better a company will do in retaining staff, meeting target objectives, and generating profits. Some studies have even found a positive correlation between employee engagement and customer satisfaction. Companies that implement strategies to cultivate informal learning and employee engagement will be more likely to leverage an adequately trained workforce that is committed to seeing the company thrive in the midst of a skills shortage.

The tactics suggested for fostering informal learning are also recommended for building employee engagement, retention and productivity:

1. Setting Clear Performance Goals

Make it clear to employees exactly what is expected of them. When employees don’t have clear-cut objectives to work towards they are unable to measure their achievements and are more likely to become disengaged.

2. Maximize Collaboration

In a study by the National Center for the Middle Market, 60% of employees said they found interaction with colleagues and superiors beneficial to their skill development. When employees are involved and given a participatory role in decision-making they also feel a greater sense of belonging and commitment to the company.

3. Welcome Feedback

Routine performance reviews and staff surveys should be implemented to identify what does and doesn’t drive employee engagement. These reviews should also incorporate self-reflective questions that require employees to consider their professional development. This will prompt workers to acknowledge their achievements and identify areas they still need to improve.

4. Allow For More Autonomy

Companies should give employees more autonomy over their roles and allow them to complete tasks in a way that suits them. And giving employees some percentage of their free time to work on anything of their choosing has proven, with larger companies like Google and 3M, has proven to not only foster higher employee loyalty and retention, it has also lead to huge innovation improvements.

Does your company have a skills shortage?

Brandt A. Handley is and NCMM contributor and the Managing Director of ROI (Resource Options International Inc.).  He has more than 15 years of experience in senior level general management, recruiting top executive talent for Middle Market companies and in international marketing & sales leadership and operational roles with top Fortune 50 companies. Connect with him on LinkedIn