Businesses need skilled talent to meet market demands. That is a situation that is unlikely to change. But as market conditions, technologies and organizational requirements evolve, in-demand skills will do the same. Throughout history, forces such as globalization have reshaped the jobs of most workers. Technology, including AI, will revolutionize those positions even more.
Soon some jobs may no longer exist, while many will look different than they do now. Other roles that companies have not yet come up with will be needed. These are solid reasons why companies can’t afford to get complacent. Fortunately, leaders have two highly effective talent development tools at their disposal: upskilling and reskilling.
Upskilling and retraining of employees prepares companies for the changes that are now taking place. These activities also prepare companies for rapidly approaching developments, which may require greater agility. As companies plan for shifts in talent needs, several factors will make upskilling and reskilling essential in 2023.
Main differences between upskilling and reskilling
While there is some correlation between the two approaches, upskilling differs from upskilling in that it is not designed to move someone into a new role. Upskilling improves an employee’s existing skills by teaching them new tricks of the trade. A position may require entirely new knowledge, but there is still a business need for it. An example of continuing education is an IT technician taking certification courses for newly released software.
Retraining, on the other hand, prepares current employees for different roles. The positions they have held for several years may well be on the wane. Although there is no longer a market demand for the existing skills of the employees, the company does not want to replace them. Instead, the company can train these employees to pursue other career paths.
The emergence of artificial intelligence is a clear driver of this phenomenon. Suppose AI will eliminate receptionist jobs in the next few years. HR departments could identify employees in receptionist positions and offer to prepare them for various specialist customer service roles. The training these employees receive equips them with the skills they need to make the transition. Upskilling does not simply build on existing skills, but can increase transferable skills.
The benefits of upskilling
Many managers think that talent goes out because of money. While they’re not necessarily wrong about that, low wages aren’t the only contributing factor. A lack of career growth is one of the main revenue determinants in organizations regardless of industry. Employees don’t want to feel stuck in a hopeless job. They want to be challenged, take on challenging assignments and grow in their career.
Growing up doesn’t always mean moving up to management. Propelling an employee to a senior specialist role with new responsibilities can help keep them engaged with the organization. Upskilling is a way to give employees the opportunity learning opportunities they crave. It also builds an internal talent pipeline, freeing the company from seeking external candidates for senior positions.
When employees see a company investing in their career growth, it can increase productivity. Learning opportunities tend to increase job satisfaction, leading to better outcomes. And the improved skills themselves contribute to more desirable business outcomes.
The benefits of retraining
The Organization for Economic Co-operation and Development predicts that technology will transform 1.1 billion jobs in the coming decade. AI and machine learning will be behind many of these changes. The shift to green technology and the aftershocks of the pandemic will also play a role. Business leaders are likely to face widening skills gaps if they do not implement retraining programs.
There may be more than shortfalls between available workers and open positions to worry about. Differences in the skills required by roles and the knowledge employees have can create additional problems. Employees will not be skilled enough to transition into roles that companies need to function. And finding skilled talent outside the organization will become more expensive than it is now.
Reskilling shows that leaders think about the future. Once a role becomes irrelevant or obsolete, it is an unnecessary expense. Employees who hear rumors of downsizing are more likely to jump ship. Those who stay can become increasingly dissatisfied as their roles lose significance, making it challenging for the company to remain competitive. When companies prepare employees for what’s to come, they can avoid layoffs, voluntary departures, and loss of morale and productivity among employees who stay.
The ability to adapt to change is what enables businesses to survive. In fact, being ahead of the curve also increases a company’s chances of thriving. Although not every leader is good at innovation, almost everyone can analyze trends and developments. Without resource shifts, it is almost impossible to pivot business models to meet emerging realities.
Upskilling and reskilling programs make human resources more versatile. The person who excels at providing routine customer support can learn to extend those skills to the growing backlog of complex requests. Similarly, companies in declining sectors can reform themselves for emerging sectors, such as green energy.
When a company is agile, the risk of becoming a forgotten name decreases. When employees have up-to-date skills, companies don’t have to worry about how they will meet market demand. Companies are given the opportunity to save costs through different working models, such as remote teamwork. And employees with well-rounded capabilities can move into new or expanded roles in less time.
The business case for skills development
Without talented employees, a company is just an entity on paper. It takes people to build customer relationships, manage technologies and achieve growth goals. But as the business world changes, employees need skills training to keep up with the times. Without adequate learning opportunities, workers and the companies that employ them risk becoming obsolete.