- Upskilling and reskilling directly address HR’s known challenges, yet according to our Annual Eightfold Talent Survey, only two-thirds of departments are prioritizing this approach.
- Upskilling can reduce turnover and costs and is less risky than hiring and onboarding new employees. It also better enables teams and companies to adapt to change.
- HR teams’ efforts at upskilling are often stymied by misalignment, not understanding your workforce’s current skills, and an inability to identify new employee opportunities.
Benjamin Franklin once wrote, “Nothing is certain except for death and taxes.” This guaranteed uncertainty of life extends to every dimension of business: revenue, expenses, technology, market trends, and, of course, hiring.
Many organizations are unsure how to or where they should grow their workforces and develop slates for new positions.
However, building and maintaining a strong, flexible workforce is imperative for grasping new opportunities and accommodating unanticipated shifts.
This doesn’t always mean adding new head count to your organization. Our latest Annual Eightfold Talent Survey, conducted with marketing research firm 3Sixty Insights, found that 71% of HR departments struggle with internal and external staffing, making it the No. 1 HR challenge overall.
Reducing turnover (82%) rates is the second priority. Yet only 66% of survey respondents listed upskilling as a priority—even though it can mitigate the urgency of finding better candidates while reducing turnover.
In this post, I explore how upskilling can help you create a more resilient and productive workforce while reducing the costs and risks of hiring new employees.
RELATED CONTENT: Align your path forward. Learn how you can bring HR and business strategy together by downloading the Annual Eightfold Talent Survey.
The benefits of upskilling and reskilling
Before we discuss how to start your upskilling journey, we’ll briefly outline its benefits.
Benefit No. 1: Training existing employees to handle new skills can reduce workforce turnover
Eight out of 10 employees are actively looking for new jobs, and half of these workers are looking exclusively at external organizations.
While pay was the top reason respondents cited for not evaluating internal positions, the lack of available jobs of interest (41%) and the lack of growth opportunities (25%) were other major contributing factors.
Nearly half of the employees dissatisfied with their jobs did not believe their company supported internal mobility, and 44% of employees said opportunities for promotion were the most critical career tools an employer can offer.
It’s not a stretch to say that teaching employees new skills can significantly reduce turnover—especially in light of a LinkedIn survey in which 94% of employees said they’d stay longer at a company if it invested in their careers.
On a related note, when you do need to hire external employees, having a stellar record of internal training, upskilling, and promotion will make your organization more attractive.
Benefit No. 2: Upskilling is more cost-efficient than hiring new employees.
Hiring an employee costs one-half to twice the position’s annual salary. Reskilling and upskilling are appreciably less expensive.
One study within the IT sector found that while the average cost of hiring was $23,450, upskilling a current employee cost only $15,231 on average. What’s more, over half of the businesses surveyed spent just $5,000 on upskilling—less than a fourth of the average hiring cost.
You might think, “If I upskill or redeploy an existing employee, I have to hire someone to replace their old position.”
Maybe. Maybe not.
You may find that other team members or AI technology can automate or take over some of their tasks or that many of that employee’s responsibilities have become redundant.
If you do need to fill that employee’s position, it should be easier and less expensive than the more senior role.
Benefit No. 3: Upskilling existing employees is less risky than onboarding new ones.
Businesses want to minimize risk, especially in times of uncertainty. Hiring new employees is inherently risky: Will they be a good fit for the role and the existing company culture? Will they meet our expectations? Will they be engaged enough to remain with our company?
In our survey, determining whether candidates were a good cultural fit was the top priority of HR professionals (26%). This was higher than years of experience (25%), skill level (22%), and the like.
Existing employees have already proven their fit and loyalty. They are aligned with your business’s values and goals.
Upskilling them is simply a matter of steering their focus to new, more relevant competencies. In this regard, current employees are much more of a known variable and are inherently less risky than external candidates.
Benefit No. 4: Upskilling creates more versatile, flexible, and resilient teams.
The more skills a workforce has, the better it can accommodate both internal changes (other team members going on leave, for instance) and external ones (new industry regulations, ebbs and flows in product demand, etc.).
Though many people focus on hard skills when discussing upskilling, organizations also need to train employees on soft skills. Problem-solving, critical thinking, collaboration, and communication are among the most valuable, learnable soft skills that contribute to a resilient, adaptable team.
RELATED CONTENT: See how Coca-Cola Europacific Partners (CCEP) filled internal skills gaps while meeting employees’ desire for growth. Read the case study.
5 tactics for successful upskilling
Successful upskilling is a two-headed challenge. Overcoming the first requires HR and people leaders to understand and anticipate the skills needed to meet overall business objectives today and tomorrow—something only 60% of CHROs believe their organization can do.
The second part is understanding the skills and potential of the organization’s employees.
Unfortunately, nearly one in five HR professionals admitted to having little or no insight into their workforce’s skills makeup.
Today’s HR departments might believe that their most significant undertaking is hiring new people, but it’s better to understand the value of what they already possess.
You can meet these twin challenges by breaking down the upskilling process into five steps.
Step 1: Determine what skills will be needed.
HR and talent strategies must be fully aligned with the C-suite, overall business strategy, and its execution. Yet only 18% of the HR leaders surveyed had achieved this alignment.
Without day-one strategic involvement in business strategy and regular collaboration with executives on important initiatives, HR will be hard-pressed to know which skills are critical to future success.
The solution: Make strategic workforce planning an HR and organizational imperative. Then, invest in the right tools and processes that will empower you to understand what skills you need to meet your business’s goals.
Step 2: Assess and record your workforce’s existing skill set.
Performance evaluations and interviews provide insight into your workers’ capabilities, but the data might not be consistent across departments and managers.
Self-assessments, peer reviews, and skills tests can reveal HR’s understanding of the skills available among existing talent. For added consistency and accessibility across teams, skills data should be retained, reviewed, and dynamically updated on a talent intelligence platform that quantifies and tracks skills.
This becomes especially vital once employees create talent profiles and use your talent platform to acquire new skills.
Step 3: Identify skills gaps.
Once HR understands the skills it has on hand and the skills the organization needs, it can map out the gaps in hard and soft skills that need filling.
With a solution like Eightfold, they can even examine market trends, the skills that are rising or falling in the workforce, and competitors’ workforces.
At this point, organizations have the choice to build, buy, borrow, or automate the skills needed.
Step 4: Determine employees’ potential and desire for upskilling and reskilling.
Some employees are unwilling to learn new skills, and others might lack clarity on which skills they need and how to acquire them.
Our Talent Intelligence Platform eliminates the guesswork. After employees create talent profiles, our native AI surfaces multiple career pathways and the skills needed.
Step 5: Provide and evaluate training.
Training can take many forms and flavors. E-learning and video modules have proven successful tools for teaching and assessing the mastery of many hard skills, as has on-the-job experience. Role-playing, mentoring, and other hands-on techniques help develop soft skills such as conflict resolution and giving feedback.
Our Talent Intelligence Platform surfaces internal mentorship opportunities and provides personalized learning pathways to help employees gain the skills they want and need. It also makes this a more manageable, less time-consuming task for the HR team and people leaders, and minimizes the risk of human bias or error.
With this AI-enabled approach, talent development becomes second nature to the employee experience, and workers gain valuable skills that advance careers and the organization’s goals.
RELATED CONTENT: Amdocs used talent intelligence to build Harmony, a talent marketplace focused on bettering internal mobility.
Build your future-ready workforce with AI
HR teams prioritizing upskilling and reskilling are better equipped to become skills-based businesses—organizations focusing less on job titles and hierarchies, and more on the skills, strengths, and aptitudes needed to accomplish meaningful tasks and goals.
Flexibility and agility are key benefits of this approach, just as they are of upskilling itself. However, managing and optimizing a skills-based workforce requires HR tools that facilitate quick responsiveness to change.
Our AI-powered Talent Intelligence Platform helps HR teams identify employee upskilling opportunities and surface dynamic, relevant training. It also offers a single view of talent across the entire organization, creating a newfound synergy between talent acquisition and talent leaders.
We can help with the often complex task of efficiently redeploying employees where they’re needed most and even help employees shape their careers. The result is a more dexterous, more satisfied workforce better aligned with corporate goals.
For more findings from the Eightfold and 3Sixty Insights, download the full report.
Jason Cerrato is Vice President, Talent-centered Transformation at Eightfold AI. Before joining Eightfold, he was an HCM industry analyst with Gartner and held talent leadership positions at United Technologies for over a decade. Cerrato is the co-host of The New Talent Code podcast — new episodes streaming now.
