As technology changes, many companies are struggling to keep up. Such alterations may instill a sense of urgency within organizations to provide skills training and development to employees. New technologies may mean more job opportunities that will require a specific skill set, and with such rapid changes in the industry, employees may need to be upskilled or reskilled. It’s become increasingly important that companies understand their skill gaps and implement programs to close them.
According to SHRM, nearly 80% of CEOs are concerned about the workplace skills gap. Almost 90% of executives and managers in a McKinsey Global Survey say their organizations are already facing skill gaps or will expect to experience it within the next five years.
This is where upskilling and reskilling come into play as they can help fill the gaps. A recent CompTIA survey found that 67% of responding HR professionals are putting more importance on reskilling and upskilling efforts. It also indicated that 74% expressed concerns over workplace digital divides.
“The dual need to create more resiliency and future-proofing of skills, with the critical need to expand and diversify the pipeline of digital-ready workers, is a resounding mandate for change,” CompTIA Tech Career Academy CEO Nancy Hammervik said in PR Newswire.
Upskilling and reskilling can be effective strategies for employers to incorporate into their workforce to close skills gaps. Upskilling is teaching current employees new, more advanced skills or enhancing current abilities. On the other hand, reskilling is when employees learn new skills needed for another job, enabling them to move within the business and contribute to a different area.
While upskilling and reskilling are two different processes, both play an essential role in bridging skills gaps within companies. According to a 2018 World Economic Forum report, approximately 54% of employees will need significant reskilling and upskilling by 2022.
Upskilling employees can become a worthwhile investment to keep up with tech advancements, stay competitive, close skills gaps, and future-proof an organization. It can help develop an advanced and highly skilled workforce, increase employee retention, and attract top candidates. Companies that place importance on upskilling can create a forward-thinking culture focused on innovation and skills development.
It can also help boost performance and provide more growth opportunities. A survey by Talent LMS found that upskilling and reskilling training has helped with increased productivity at work, according to 91% of companies and 81% of employees. Furthermore, 68% of companies surveyed have invested in this type of training to deal with changes within the organization.
Investing in an upskilled workforce can alter the cultural landscape of an organization into one focused on knowledge sharing and employee development. This type of environment can attract new talent and increase employee satisfaction. According to the Talent LMS survey, 80% of responding employees said upskilling/reskilling training had improved their confidence.
Companies that invest in their employees by providing training and skills development opportunities can “build their reputations as employers of choice,” Kelly Aiken, vice president for the National Fund for Workforce Solutions, told SHRM.
Aiken also adds that upskilling can help reduce turnover. A study by CareerAddict asked respondents to rate the importance of nine factors that would impact their decision to quit a job. The study found that lack of career advancement was the most crucial factor for leaving.
While many organizations acknowledge they’re experiencing a skills gap, there’s still some hesitancy to invest in workforce development programs due to reasons such as financial constraints and lack of appropriate technology to support the initiatives. Similarly, the cost of time, training, and resources put toward upskilling/reskilling can make it difficult to justify.
Tech industries looking to upskill staff would require an approach that’s more innovative and forward-thinking to reflect the advancements within the industry. Also, it’s vital that upskilled staff can apply their new skills to projects that add value to the organization. This can help organizations retain these valuable employees.
According to a McKinsey Global Survey, all respondents view closing skills gaps as extremely important, but relatively few say their companies are ready to act. Even organizations with reskilling programs in place or in the works have faced obstacles, with over 50% of respondents citing balancing the programs’ needs with current business operations as the biggest challenge. Another challenge was measuring the programs’ effect on the business.
Despite these challenges, the McKinsey survey found that roughly 70% of respondents say that the business impact from reskilling programs has been greater than or equal to the investment. A further 48% say the programs have enhanced bottom-line growth.
The global pandemic has caused several organizations to focus on skill-building among their employees. According to another McKinsey survey on reskilling, 58% of respondents say closing skills gaps has become one of its top priorities since the pandemic began, and 69% say their organizations are doing more skill-building now than before the pandemic. More than half of respondents also plan to increase skill-building spending over the next year, suggesting that organizations are open and willing to invest in skill-building in the future.
Sign up to get our monthly newsletter and updates about RNN.