How Upskilling Programs Benefit Both Businesses and Employees

What is the skills gaps crisis—and why should you care?

The skills gap crisis refers to the loss of productivity organizations experience when workers lack the skills to perform their jobs effectively, particularly as technology evolves and business and market demands change. The gap has existed for decades but upgraded to “crisis” status following a pandemic that forced millions of workers to adopt digitization and move to remote or hybrid work overnight. 

The Upskilling Advantage: How Investing in Training Boosts ROI and Narrows Skills Gaps

A few years on, the disconnect between employee development of essential job skills and businesses’ ability to remain agile in ever-changing markets is more pronounced than ever. To narrow the gap between old and new skills, companies should invest in employee growth by providing flexible, accessible, and targeted e-learning to address in-demand skills. Upskilling and reskilling programs have the potential to increase ROI and improve employee satisfaction and productivity. Ultimately, skilling programs are critical to future proof today’s businesses in an ever-increasingly competitive economy.

In this post, we’ll explore the state of the skills gap and cover why investing in effective e-learning helps businesses and their employees succeed in the new world of work. To learn more about the skills gap crisis, science-based learning, and how to train with ROI in mind, download our full e-book, Close Skill Gaps with Science-Based Learning.

New tech increases skills gaps

working to recover day-to-day profitability, had little time or resources to devote to skilling their existing workforce. New technology advances compounded the issue—and for many organizations, keeping up with evolving technical knowledge felt impossible.

Todd Zipper, executive vice president at Wiley, summed it up: “The demand for skills keeps evolving faster, and it’s increasingly hard for companies and higher education institutions to keep up, particularly when it comes to soft skills. This widening of the skills gap is concerning and not likely to end soon.”

Market forces and industry trends compound skills gaps

To make matters worse, employees playing post-pandemic catch-up to acquire missing skills face new competition today. Rapid technological advancements in fields like Artificial intelligence (AI), robotics, machine learning, and automation offer new ways to move faster, smarter, and sometimes cheaper. Oh, and robots don’t take sick days.

Research predicts that 1.1 billion jobs may be “radically transformed” by 2030 due to changing technology. The pace of change is so rapid that workers struggle to develop new essential job skills without a framework to do so—all while their existing skills become antiquated. Businesses need a long-term upskilling strategy to remain competitive. In fact, recent research from Gartner revealed that one in three skills listed in the average IT, finance, or sales job posting is already obsolete. With these forces at work, upskilling your employees is no longer optional. Positive business outcomes depend on enabling employees to keep up.

Hiring new talent doesn’t outweigh the benefits of upskilling

With steep learning curves around every corner, hiring new talent may seem like the obvious answer—but experts say that’s not the case. 

“In today’s environment, hiring is not possible for many organizations,” says Alison Smith, Director at Gartner HR. “Instead, companies can look at current employees who have skills closely matched to those in demand and utilize training to close any gaps.”

In other words, companies should look inward to upskill their existing talent. This approach ensures people have the chance to fulfill their potential and leads to increased job satisfaction and opportunity. 

How upskilling impacts employee turnover

All of this can improve a company’s employee retention rate—and the bottom line. Upskilling has a compelling financial incentive. Money spent to improve employee retention is a cost-effective alternative to recruiting, hiring, and training replacements. Research shows that replacing an employee is dramatically more expensive than retraining them—to the tune of one to two times the employee’s annual salary. What’s more, getting a new employee fully up to speed can take up to two years. 

Key benefits of training existing employees

Increase profitability 

If hiring new talent is expensive and time-consuming, what does the alternative—skilling current employees—look like? In a word, profitable. World Economic Forum research found that “investment in reskilling and upskilling of the current global workforce has the potential to boost GDP by $6.5 trillion by 2030.”

Boost employee retention

While employee upskilling and reskilling a workforce is a long-term investment, it can also have immediate returns. Implementing professional development programs nurtures employee engagement and loyalty by fostering a culture of learning and growth. Skills programs are also critical for internal mobility—a key to employee retention.

Career growth

Personal and professional development opportunities are part of the path to future success. 

Technical training, such as digital skills, software mastery, and machinery service, is often part of career growth initiatives. Additionally, soft skills training, like effective customer service techniques, can be quickly mastered and applied to related job functions. These soft skills can actually be key to leadership development. For example, critical thinking skills are highly desirable for leadership positions.

Starting an upskilling program

On paper, it’s clear that upskilling programs are a critical tactic to improve employee performance and retention. You may be wondering, where to begin your upskilling initiatives. The first step to building an upskilling program is to target business goals. For maximum impact, companies should identify and map skill gaps between employees’ current skills and those needed to achieve business goals. With these gaps identified, create learning programs and source software to support the program goals.

Among the top factors to look for in e-learning software are adaptability, accessibility and mobility, and dynamic tools for creating interactivity and engagement. All of these can more effectively target the intended audience and address in-demand skills. 

Investing in curiosity, learning, and agility for your workforce cultivates resilience, allowing your business to bounce back from setbacks, adapt to change, and prepare for the future.

Building a bridge to the right skills

Leading companies must move fast and deliver consistently in the new world of work. Upskilling existing talent is key to developing skilled workers—as is tailoring training to meet the needs of learners ahead of the curve.

Now, more than ever, effective e-learning is an essential tool to help companies thrive in this new learning landscape. As technology and market needs change, it’s up to us to adapt, reinvent, and reimagine training opportunities. It’s time to be the bridge builders, forging a path over the skills gap and into a promising future.

For more insights on how to develop effective training programs, download our full e-book, Close Skill Gaps with Science-Based Learning.