According to the World Economic Forum (WEF), the world has desperately needed a reskilling revolution since 2020, and the problem has only been exacerbated in the years since the pandemic.
Why is that?
There are many reasons, including new technology like artificial intelligence, a retiring workforce, the prevalence of remote work, and Industry 4.0 (the Fourth Industrial Revolution). These have all converged to form a significant skills gap facing the workforce worldwide.
In short, new skills are emerging rapidly while existing skills are becoming obsolete faster than ever before.
The WEF claims that the long-established 30-year half-life for skills has dropped to just six years.
If you start a four-year college program to learn new skills, they will become obsolete two years after graduation.
Just how bad is the skills gap?
A report by McKinsey and Company states that 87% of companies worldwide either have a skills gap or will face one in the near future.
If nothing is done, many businesses will lose their market positions and fall into obscurity (and likely bankruptcy).
That’s why there’s such a need for reskilling right now to equip employees with the skill sets they need to do their jobs properly.
The good news is that implementing reskilling programs will yield numerous benefits for your organization, such as higher productivity, better retention, and attracting top talent.
Read on to learn how to reap the benefits of reskilling for your employees.
What is reskilling? How does it differ from upskilling?
Reskilling is where you teach your employees new skills and build competencies necessary for performing their job tasks.
The need for reskilling usually stems from new technologies and industry disruptions. For example, the introduction of new artificial intelligence and automation technologies has eliminated some positions while radically changing others.
Research predicts that 120 million workers will have to undergo reskilling due to AI technologies over the next three years.
Currently, 14% of workers worldwide have experienced job displacement due to the introduction of AI technologies.
Reskilling can be a blessing in these instances since new positions are often formed to monitor, prompt, and train AIs. Instead of outright firing employees who perform tasks that AI can replace, organizations can reskill them so that they become technicians and AI prompters.
Yet, reskilling efforts don’t always have to come in response to a crisis.
Some organizations proactively employ reskilling to enforce a culture of continuous learning. At these companies, regular retraining and opportunities for continued education are regular occurrences. A learning culture helps retain top performers, promote from within, and attract top talent.
How is reskilling different from upskilling?
While you may hear the terms used interchangeably, there’s a noticeable difference between reskilling and upskilling employees.
In particular, upskilling involves expanding employees’ existing skill sets to adapt to new responsibilities in their current roles. It’s also possible to upskill an employee to take on new roles, so long as the skills are directly related to the employee’s existing skills.
An example of reskilling vs. upskilling
Let’s consider a quick example of both reskilling and upskilling so that you can better understand the difference.
First, let’s tackle reskilling.
Imagine an assembly line worker at a factory who completes repetitive tasks daily. Their employer decides to adopt automation technology, which eliminates every task and responsibility the assembly line worker has.
Rather than fire the valued employee with tenure and a hard work ethic, the employer chooses to reskill them into a line supervisor. Now, the employee oversees the entire assembly line and is responsible for maintaining the automation technology.
This was costly, as the employer had to pay for training programs and new equipment for the worker to become a competent supervisor.
Yet, these expenses pale compared to the cost of hiring a new employee to become the line supervisor.
Therefore, reskilling is a win-win in this scenario. The employer can automate repetitive tasks and save money by reskilling an existing employee instead of recruiting a new hire. The employee also wins because they are promoted to a higher, better-paying role instead of getting laid off.
Now, let’s look at an example of upskilling.
This time, picture a digital marketer specializing in social media and email marketing. They’re great at what they do, but their skills must include SEO (search engine optimization), a staple of modern digital marketing.
In this case, their employer provides them a learning platform to develop SEO skills and competencies.
Since SEO is a subset of digital marketing (their existing skill set), this is an instance of upskilling instead of reskilling.
Both are effective talent development techniques that help you get the most out of your workforce, so you should use them whenever and wherever possible.
Soft skills that make reskilling easier
As stated before, the half-life of technical skills is shrinking every day.
This means employers should focus less on hard skills and more on soft skills when recruiting.
Why is that?
Specific soft skills, expected in all professions, can make learning new complex skills much more accessible.
For example, consider two prospects interviewing for a computer programmer position. One has a four-year college degree in computer science with impressive grades, but one needs to gain core soft skills like problem-solving, communication, and adaptability.
While their degree undoubtedly taught them technical skills related to computer programming, their skills will likely become obsolete in roughly two years (or less).
The other candidate is a self-taught computer programmer who has been doing freelance work for the past few years. What they lack in technical skills, they make up for in problem-solving, excellent communication, teamwork, and conflict resolution.
It’s clear that the second candidate is the wiser choice since they’ll be easier to teach new skills.
Learning new technical skills will be a breeze since they communicate well, can work with others, and are adept at solving problems on the fly.
The other candidate, while boasting an impressive education, needs to gain the soft skills necessary to adapt to change.
This does not mean college graduates can’t have fantastic soft skills in addition to hard skills (many do), but it exemplifies the current need for recruiters to focus on soft skills.
Here’s a list of common soft skills that make successful reskilling easier:
Adaptability
Teamwork
Problem-solving
Communication
Decision-making
Work ethic
Leadership
Creativity
In the future of work, looking for these skills on employee resumes will likely become as important as looking for experience and education.
Benefits of reskilling for employers
Is reskilling your workforce worth it?
While it depends on each organization, it’s undeniable that reskilling yields many benefits for employers.
As stated before, reskilling or upskilling an employee is more cost-effective than hiring someone new.
Companies can expect to pay anywhere from $4,000 to $20,000 to onboard a single employee, not including salaries and benefits.
Compare that to the average cost of an employee training program, which is only $954.
Even if your onboarding costs are on the lower end of the spectrum ($4,000), it’s still WAY cheaper to upskill or reskill an existing employee.
This is only one of the benefits of reskilling, so let’s examine some more.
Close ever-widening skill gaps
The skill gap issue is accurate, and it’s only getting worse for most companies. Reskilling provides a suitable remedy since it equips your existing staff with the necessary skills to do their jobs properly.
Skills training initiatives will always be cheaper and faster than hiring new employees, so reskilling should become essential to any organization’s talent management repertoire.
Training can be in-person, too. Plenty of online skills development platforms will help your team close any pressing gaps. Webinars are another attractive option to help employees learn new competencies.
Avoid layoffs
Reskilling is also a great way to avoid laying off employees. Layoffs not only negatively affect morale, but they can also harm your organization’s reputation.
People will only want to work for you if they think they’ll get fired as soon as you can replace them, so layoffs should be a last resort.
Reskilling can help you avoid laying off employees and provide them with exciting new opportunities to develop their careers.
Improve employee retention and recruitment
Lastly, employees appreciate employers who help them advance along their career paths.
According to an AOI (American Opportunity Index) survey, 92% of workers rated “lots of opportunity to advance in the workplace“ as necessary or extremely important.
Whenever you invest in reskilling, you invest in employee development, which will A) positively impact your reputation as an employer and B) help you retain your top performers.
How to reskill your workforce step-by-step
Now, it’s time to learn how to implement a reskilling program at your organization.
Going step-by-step, the process looks like this:
Pinpoint which skills are missing
Identify opportunities for reskilling in your employees
Provide the necessary training
Monitor metrics and adjust accordingly
Let’s dive in.
Step #1: Pinpoint which skills are missing for each position
The first step is to identify that you have a reskilling problem in the first place.
You should list the skills your teams need to learn to remain competitive and productive.
It likely won’t be possible to reskill your entire workforce, so you should focus only on the skills that most affect your bottom line.
Things like technology and communication tend to be the most pressing, so take a hard look at those areas. Ask yourself questions like:
Are any technologies disrupting our processes? Can my employees effectively communicate with one another? Are there any tasks that employees currently aren’t able to complete?
Once you have a list of skills to focus on, you can proceed to the next step.
Step #2: Identify reskilling opportunities
Next, you’ll need to figure out which positions are most affected by missing skills.
Look for the positions with the most significant skill gaps, such as those requiring more AI or automation technology knowledge.
Also, ensure that the employees in these positions are open to the reskilling process. Some employees are more open to learning new things than others, especially those with many of the soft skills mentioned previously.
Align your list of skills with the list of employees needing reskilling to complete this step.
Step #3: Provide the necessary training programs
By now, you’ve got your work cut out for you. All that’s left to do is invest in the necessary training programs to equip your employees with the skills they need to succeed.
You should be very careful when selecting training programs. When searching online, make sure to select the first program or module you find.
Instead, you can compare reviews and read testimonials to ensure the material is worth the investment.
Pay close attention to rolling out the training to your staff is also important. Do your best to provide resources that will answer any questions they may have.
Step #4: Measure your progress and adjust accordingly
The last step is to monitor key metrics and goals to ensure the training has done its job.
Important metrics to measure include:
Productivity
Employee engagement
Morale
Customer satisfaction
Retention
Cost savings
Ideally, you should see positive impacts on all these metrics. If you notice things going the other way, it’s a sign that you need to go back to the drawing board and retool your strategy. Keep making adjustments until you achieve the results you want.
Final takeaways: Reskilling employees
We’ve covered a lot so far, so let’s recap:
Reskilling involves teaching employees brand-new skills to improve their capabilities. It differs from upskilling, which consists of expanding on an employee’s existing skills.
It benefits employers and employees by saving money, improving retention, and boosting productivity.
If you still need to implement reskilling at your organization, there’s no better time than now.
More Resources:
Boomerang employees: Is rehiring right for your company?
The top technical and soft skills that look good on a resume
4 ways hiring managers can assess a candidate’s soft skills
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