Staying competitive and up-to-date can be challenging. One of the keys is to upskill and reskill your employees. In fact, a report from Citrix found that 82 percent of employees and 62 percent of HR directors said workers would need to reskill or upskill annually for an organization to maintain a competitive advantage.
You may be thinking of your organization and if you’re meeting that bar or not. Many are not which is why results from a LinkedIn Learning report found there has been a 15 percent increase in the number of organizations that are investing in upskilling or reskilling programs over the past couple of years. Clearly, the pressure to prepare for the future of work is starting to translate into formal policy and programs.
The uptick in up/reskilling employees isn’t another cost businesses have to incur. Despite the cost of training, upskilling and reskilling is a much better alternative than dealing with job vacancies and recruiting. Research by Gallup found the cost of replacing an employee is between one-half to two times their annual salary. Whereas the World Economic Forum estimated that to reskill employees can average around $24,000 per employee.
Before we start checking our budgets let’s ask: how do you know if your employees need to upskill or reskill? Answering that question starts with defining what they both are.
What is the difference between upskilling and reskilling
Trainingindustry.com defines upskilling as,
“the process of building an employee’s existing skills and strengths to enhance their skill sets.”
In other words, upskilling your employees involves training to help them perform better in their current jobs. Doing this can help an organization stay competitive and flexible as the industry changes.
Reskilling has been defined as,
“the process of training employees to complete tasks not related to their current job.”
This means you’re training the employee to take on a new position within the company. Many organizations took on reskilling initiatives during the pandemic as they tried to maintain operations with fewer staff and supply chain visibility disruptions. In the wake of the pandemic , Delloite released a report calling on organizations to embrace upskilling and reskilling initiatives:
“Adaptability, flexibility, and a commitment to lifelong learning will be vital...It’s time for companies and individuals to embrace the upskilling imperative. For companies, upskilling enables them to build a future-ready workforce.”
The reality is that companies need to engage in both upskilling and reskilling training for employees.
Businesses that want to equip employees to adapt to changes in their current position will need to focus more on upskilling.
On the other hand, companies that require employees to learn new skills to adjust to industry changes or disruption will want to focus on reskilling.
Why is it important for organizations to upskill and reskill their workforce?
The need for organizations to upskill and reskill their employees has never been more evident. Researchers from McKinsey have said that companies who want to come back from the COVID pandemic stronger will need to reskill their workforces. In addition, the World Economic Forum warned that over half of employees around the globe will need to reskill or upskill by 2025 to stay competitive.
The global reality is there is a labour shortage in almost every industry, and those numbers are not likely to get better. Gone are the days when you could hire new staff who were skilled and ready for future challenges. According to SHRM's skills gap research, 83 percent of HR professionals have recruiting difficulties. And 75 percent of those surveyed said there was a shortage of skills in candidates for job openings. Organizations can’t find the talent they need so they need to turn inward and develop it themselves.
Additionally, it is a big undertaking for your company to hire an employee. From the cost of recruiting to training and onboarding, it is a significant investment. It only makes sense to continue capitalizing on that investment by upskilling or reskilling your current employees. It’s likely to cost much less than it would if you hired and trained someone new, even if you could find a good candidate.
Here are some additional reasons why your organization should prioritize upskilling and reskilling.
Future-proof your workforce by making it more resilient
Things are changing. The work world is rapidly becoming a new place. For organizations to keep up and stay competitive, you need to invest in your biggest asset: your employees.
Doing this can make your workers more adaptable to changes. Investing in your people can also help your organization avoid disruption, impacting productivity and revenue. In addition, research has found that when employees feel their employer is investing in their development and growth, they are less likely to search for positions at other companies. Why would an employee look elsewhere if the company they’re working for is providing them with the growth opportunities they want?
The shelf life of skills is getting shorter
The research from the World Economic Forum demonstrates that we are in a time of rapid change. As technology, like automation, takes over and makes some jobs redundant, workers will need to reskill to move into new positions and roles, or they’ll be left unemployed.
The worse possible scenario is that millions could be left without a job. That, in turn, will put pressure on the government and social supports spending. Organizations play a key role in how ready we are for the future of work.
Top talent wants to join organizations that will develop them
If you want to be an organization that attracts top talent, you’ll need to invest in them.
According to Gallup, 87 percent of Millennials have said that professional development and career growth opportunities are very valuable to them. And this is coming from the largest working generation in the U.S.
Businesses that want to continue will need to have a plan for reskilling and upskilling their employees.
Examples of companies upskilling and reskilling their employees
Now you know the importance of upskilling and reskilling your employees. Before diving into creating your upskilling and reskilling strategy, it can be helpful to see how other companies have been successful in this area.
Cruise, a self-driving car company, is supporting new engineers as they join their fast-growing teams with mentorship. Their program has been designed to help engineers find new opportunities internally. The goal was to keep top talent and develop them. At the outset, the program attracted more participants than they had expected. Moreover, mentees and mentors rated their experience as 3.8 out of 4. One of the mentees offered this feedback during the mentorship: “I'm optimistic that by the end of the mentorship, I will either have deep insight into this topic or know exactly what my next career step should be.”
Ecommerce giant Amazon has demonstrated their commitment to upskilling and reskilling their employees. Forbes noted the company has already contributed $700 million to the effort. Amazon said it intended to invest $1.2 billion by 2025. The money will go towards training programs and even college tuition for some employees.
Mastercard has changed more than its business model over the past several years. The credit card company started a retraining program in 2016. The aim was to develop a competitive advantage over startups. The program is also customizable for employees from different sectors of the company.
How to upskill and reskill your workforce
Deciding on a strategy to upskill and reskill your workforce may take some time. But, it’s important to get it right. Here are some of the steps you should follow during the process.
Uncover skill gaps and current capabilities
To meet the challenge of upskilling and reskilling your workforce, undergo a skills gap analysis. This means looking at what skills your organization will need to stay competitive. Compare that with the skills your current employees have. You’ll be able to see the skills gap in your workforce.
Once you have an understanding of the skill gap your organization has, you’ll be prepared to develop a plan or strategy to reskill or upskill your employees. This can be done in some different ways.
One of the easiest ways to overcome the skills gap is to create some on-the-job training opportunities. This can include job shadowing, where you have an employee follow another worker around, watching what they do and learning how to do the work.
However, this approach will not work for every position you have in your organization.
If your company already has a workplace mentoring program, you can build on it to help facilitate your upskill or reskill goals.
Mentoring helps support learning as informal conversations can encourage employees to get curious and motivated about what they’re learning. It can also be a valuable tool in your succession plan.
Another alternative to enhance employee upskilling or reskilling training is to engage them in peer coaching or mentoring. In this approach, peers can act as coaches to help colleagues develop the skills that will help them grow. It establishes a safe atmosphere where employees can ask questions, experiment, and be guided rather than directed. It can be particularly effective as a leadership coaching tool.
Virtual training courses can be an effective and affordable tool for employee development. Some organizations create their own online learning platform and tools, while others rely on ones like LinkedIn Learning or Coursera.
Not everyone learns the same, so investing in a blended learning program could be a good idea. This style of employee development program combines in-class and online learning to help solidify the exchange of knowledge.
Let Together help your employees grow. Our mentoring software empowers you to start and run a workplace mentoring program with ease. Contact us today to find out how to begin building a mentoring program to help your employees reskill or upskill for the future.