Kevin BinkoMay 9, 2023
Topics: Employee Experience

Futureproof your Workforce: the Importance of Upskilling and Reskilling

Companies around the world are facing the same uncertainties — fear of recession, digital transformation, the Great Resignation, and others. 

A major topic of concern is employee retention. In a tumultuous labor market with high turnovers, layoffs, and organizational restructuring, businesses have to start looking for new solutions. 

One way companies can mitigate uncertainty while developing a resilient, capable workforce is by embracing the importance of skills — specifically, upskilling and reskilling.

 Why is upskilling important? 

Companies can benefit from upskilling and reskilling in many ways. 

Employees across all industries are placing a greater emphasis on learning and development opportunities — skills fall directly into that category. More specifically, 74% of employees are willing to learn new skills or be reskilled to support their job performance. 

On the flip side, a McKinsey study found 87% of CEOs believe they currently have or will have skills gaps within their organization. By acknowledging talent’s desire to evolve and the current skill gaps a business has, leadership can start to bridge the gap in an effective way that allows upskilling and reskilling to be impactful to both the individual and the organization. 

So how do you leverage skills development to better engage your workforce? Having a skills identification and training program offers employees reassurance that organizations are committed to mutual success, which should lead to higher retention and better performance.

Related: Designing Employee Retention Strategies for 2023

Companies that implement workforce intelligence and skills programs will be better able to fill these gaps, compete, and adapt to digital transformation. Additionally, since the cost to replace an employee costs 21% of that employees salary, upskilling and reskilling is often a far more cost-effective option. 

What exactly are skills and what is the difference between upskilling and reskilling? 

When referring to the evolution and development of the workforce, there a few common terms that come up:

  • Skills are the attributes an individual possesses that allows them to be successful at a given task or role. Skills are dynamic and continually evolving over time based on education, work history, and life experiences. They can be categorized in many ways, like soft skills, which stem from an individual's inherent ability to be creative and collaborate, to hard skills, which are developed over time and exhibit focused effort on a particular task (programming, data analysis, etc.). 

  • Upskilling is the development of new knowledge, skills, and competencies that enable better performance within a role or responsibility area. For example, a software engineer learns a trending programming language to work on disruptive technologies. Upskilling builds on an individual’s existing expertise to hone skills or acquire new related skills that allow them to be more adaptable and agile within their field of specialty. 

  • Reskilling is the development of new knowledge, skills, and competencies that enable an employee to switch to a new role, team, or business unit. For example, a Marketing specialist moving into Product Management. Reskilling focuses on developing talent in a way that extends outside of their existing expertise or skill sets, allowing them to broaden their knowledge in different areas of the business. 

  • Redeployment is the actual process of moving an employee between roles when their existing role is removed. Redeployment necessitates an understanding of an employee's skills, and how they can be applied successfully in different roles. When the workforce is primed with upskilling and reskilling opportunities, redeployment is more likely to succeed. 

How to approach upskilling and reskilling

Maya Angelou once said, “you can’t really know where you are going until you know where you have been,” and the same thing could be said about skills. Understanding the skills necessary to evolve to a new role or perform better in an existing position requires knowing what each employee is already equipped to do. 

Skills can be identified and validated in many ways, including:

  • Parsed from resumes, social profiles, and job descriptions 

  • Pulled from multiple data sources via APIs

  • Automatically identified through AI

  • Manually entered by employees or managers 

Once the information is parsed and inputted, employees and managers can validate their skills within an opportunity portal or talent marketplace. Within a talent marketplace, employees should have access to gigs, mentorships, and learning programs that provide them with the opportunity to add more skills to their profile.

Related: Leveraging Skills To Bounce Back from the Great Attrition

I know my employee's skills, what now?  

Without an understanding of an individual’s career goals, or a business’s future skill needs, it would be impossible to know what skills to prioritize for an employee’s learning and development. 

“If you don’t know where you’re going, any road will get you there” -  Lewis Carrol

By creating an upskilling and reskilling program, your company can begin to support employees on their development journey while closing skill gaps within the business. But how do you get started? 

In the same talent marketplace where employees can input and validate skills, they should be able to identify their career goals, job preferences, learning paths, and other areas of interests. This allows them to input specific information that may not exist in resumes, informing the AI to help make better recommendations to support their goals. 

It’s also important to create a skills program. Every upskilling and reskilling program needs to have ‘goal posts’ that inform skills gap analysis and outlines recommendations on skills to pursue to close those gaps. 

AI can identify these skills gaps and deliver personalized recommendations on learning and development courses, gigs, mentorship opportunities, or open roles, streamlining how your business upskills, reskills, and redeploys talent. 

4 reasons you should implement an upskilling and reskilling program

When created and implemented effectively, upskilling and reskilling programs are beneficial for both the business and the individual. Here are four reasons you should implement an upskilling and reskilling program at your organization. 

1. Increase employee engagement by offering new opportunities for growth

Investing in your employees is investing in your company's future. By offering them new opportunities for growth and development, you’re not only increasing their engagement with your company, but you’re also supporting them as they acquire new skills that boost their personal effectiveness.

Confidently showing your employees that you care about their professional development and their success helps them feel valued, supported, and challenged. When individuals feel like an integral part of the company’s success, they’re more likely to stay, become more productive, and eventually become an ambassador for your company, which can turn into referrals that build your talent pipeline. 

Related: Why is Upskilling and Reskilling Important for Employee Development? 

2. Fuel innovation with upskilling and reskilling programs that encourage employees to think outside the box 

One of the best ways to fuel innovation is through upskilling and reskilling programs that encourage employees to think outside the box. In these programs, employees can learn new skills, offer a fresh pair of eyes, and gain knowledge and experience in specific areas throughout the business. 

While being immersed in areas that are typically outside of their day-to-day responsibilities, employees can gain a better understanding of how each role impacts the bottom line.

They also have the ability to explore areas of the business they might be interested in, and develop collaborative skills that help them work well with others — simultaneously, they make new relationships through networking that may not have otherwise been possible.

3. Positively impact productivity by giving workers the skills they need to be successful

HR leaders understand the importance of having a productive and motivated workforce. But the question is, how do you achieve that? The answer lies in skills development. 

By providing your workers with the necessary skills to excel in their roles, you not only improve productivity but also boost morale, as they feel more confident in their abilities. With access to training on a regular basis, your workers will be equipped with the tools they need to be successful, both in their current position and future positions they'll hold.

Upskilling and reskilling current employees also fosters a culture of continuous learning and development, making businesses more agile and adaptive to changes in their industry.

4. Reduce costs associated with hiring by upskilling or reskilling existing talent

It can be costly to hire and onboard new talent. But, businesses can save money by investing in their current employees and connecting them to reskilling opportunities that allow them to grow into critical roles across the enterprise. 

By helping individuals acquire new or existing skill sets, companies can enhance their workforce's capabilities and demonstrate a commitment to employee growth — which is appealing to new hires when upskilling or reskilling isn't a viable option for specific roles.

What’s next in skills?

There have been quite a few labor trends over the past two years — the Great Resignation, the Big Quit, Quiet Quitting, and more. In response to these employee retention trends, the next few years could likely be defined as a “Great Reskilling.” 

Employees have an appetite for upskilling and reskilling programs, and employers have shown a massive need for one. A path forward, toward mutual success, lies in having a strong skills identification and training program within your talent marketplace that supports the upskilling and reskilling of your workforce.  

Related: Skill Disruption: What is it and what does it mean for HR?

Invest in upskilling and reskilling with Phenom Talent Marketplace 

Preparing your workforce for upskilling, reskilling, and redeployment goes beyond recommending a couple of courses. By leveraging a talent marketplace, you can use AI and machine learning to identify skills gaps, perform mentor/mentee matching, recommend gigs or short-term projects, and boost employee retention. 

Skills intelligence is an important part of creating an agile workforce that’s primed to handle uncertain situations. With Phenom Talent Marketplace, you can provide your employees with the tools they need to thrive and meet evolving business needs. 

Ready to expedite how you upskill and reskill employees? Check out this blog on How to Launch a Talent Marketplace.

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