We are collectively experiencing a truly unprecedented time of Industry 4.0 (also referred to as the Fourth Industrial Revolution), a time in which rapid change to technology, industries, and societal patterns and processes has emerged due to increasing interconnectivity, AI, digital transformation, and smart automation. The ever-increasing speed of these changes brings the need for reskilling and upskilling to the forefront of corporate discussion. With skills now having a half-life of five years, and some technical skills only having a half-life of two-and-a-half years, business leaders must prioritize agility in their learning and development as we move from an age of production to an age of information and imagination.

Shifting Demographics in the Workforce

As Baby Boomers head towards retirement and birth rates continue to decline, many companies have not yet captured the knowledge that these older workers possess and have also not transferred this information to younger cohorts that are coming in. Combine this with a global labor shortage in nearly all industries, and organizations can no longer simply hire the perfect candidate to fill the skills gap.

And as more and more Millennials and Gen Z workers participate in the workforce, these younger workers acknowledge that their skills are going to need to be refreshed and updated continuously throughout the course of their career. In fact, according to a recent Gallup poll, 87% of Millennials said that career growth opportunities and professional development are incredibly important to them. If organizations are not clearly offering these workers upskilling and reskilling opportunities, then these Millennial workers are highly likely to leave.

The Great Resignation (The Great Reshuffle)

In 2021, more than 38 million Americans quit or changed their jobs, with more than two-thirds of workers in 190 countries looking for skills in new roles. This highlights the tremendous possibilities for movement across workplaces for individuals who are seeking different opportunities, particularly those looking to learn new skills. If your company isn’t offering new skills acquisition to employees, you run the risk of having those workers look elsewhere.

Additional statistics highlight further issues facing organizations looking to hire and retain quality, skilled employees:

• 83% of HR professionals are reporting recruiting problems.

And even if organizations can indeed find candidates, they may not be able to simply hire the “perfect” candidate with the robust skill set needed and may have to choose a candidate that is “just okay,” but can function in the position:

• 75% of HR professionals surveyed reported a shortage of skills in candidates.

Given this information, organizations cannot necessarily rely on hiring for skills any longer. They must integrate reskilling and upskilling opportunities into their organization’s strategy in order to increase employee retention.

Previous approaches alone aren’t sufficient. Bachelor’s degrees are increasingly required for middle class jobs, but only one-third of adults have a bachelor’s degree or higher and today’s students are paying at least twice more for their degrees. Some skills also now need upgrading within two to three years, making them obsolete before students graduate and well before these students have paid for acquiring them. Additional eye-opening statistics on the skills gap include:

• According to a Future of Jobs report from 2020, business leaders predict about 40% of their workforce will need future reskilling.
• According to research and advisory firm Gartner, the number of skills required for a single job increases 10% annually.
• One-third of the skills that appeared in an average job posting in 2017 are no longer needed in 2021.
• The skills for our future workforce will continue to evolve at a rapid pace. A Dell Technologies study from 2018 estimated that 85% of jobs people will have in 2030 don’t yet exist.
• The World Economic Forum estimates that over half of all employees (54%) will require ‘significant’ reskilling by 2022.

Overall, organizations can no longer rely on higher education to adequately prepare workers for a workforce that requires ever-increasing upskilling and reskilling to keep up with the pace of change. This will fall on those in Learning and Development, in IT, and in HR at these organizations, to prioritize and implement both reskilling and upskilling as needed to retain employees and empower them to learn, change, and grow.

Upskilling vs. Reskilling: What's the Difference?

With such a massive focus on reskilling and upskilling in today’s business landscape, it’s critical to differentiate between the two terms and understand some examples of each.

What Is Reskilling?

Reskilling is training and developing your employees to do entirely different jobs. It is a crucial strategy for organizations to remain competitive in an ever-changing world. Reskilling occurs when employees learn new skills that replace existing abilities. For example:

• Automobile manufacturers that move from gas to electric vehicles
• Self-serve kiosks that replace cashiers, bank tellers, or information booths
• Robotics and other forms of tech that replace factory positions

The World Economic Forum predicts that technology will create 97 million new jobs by 2025. Reskilling provides staff with opportunities to access new roles within your organization and meet the demand for new positions. 

What Is Upskilling?

Although there is a correlation between reskilling and upskilling, there are differentiating factors between them. Upskilling doesn't aim to move a person to another position. Upskilling occurs when employees learn new skills to progress within their current role or career track. For example:

• Marketing professionals who move from print to digital and social media
• Business analysts who move from crunching numbers in spreadsheets to data analytics, data mining, and data modeling

Upskilling facilitates ongoing learning in an organization and addresses skills gaps. It helps individuals advance by enhancing and specializing their existing skills and roles. Organizations enable upskilling through microlearning, personalized eLearning courses, workplace mentoring, and lunch-and-learn sessions.

What Are Cross-Skilling and New Skilling?

In addition to reskilling and upskilling, cross-skilling and new skilling are two related practices that are extremely valuable for organizations to utilize in today’s Industry 4.0 ecosystem.

Cross-skilling: Describes the process of developing valuable skills across multiple functions. Examples are:

• Sales team using social media to promote marketing efforts
• Learning and Development professionals learning change management practices
• Project managers understanding data analysis

New-skilling: Describes a continuous, lifelong learning approach with an assumption that corporate programs, tools, and practices progress over time too. Some examples are:

• Programs for emerging technologies
• Innovation teams to identify and build learning opportunities

In this new era of “no normal,” learning will need to become part of our jobs, not something that interferes with our jobs. As organizations increasingly emphasize the need for newskilling, workers will be constantly adding to and updating their skill sets, year after year. Given the global labor shortage and massive turnover during the past year, organizations will now also need to look inward and assess how they can develop talent for themselves, and how much of this they can do.

Benefits of Upskilling vs. Reskilling

Businesses need talent to fill skills gaps and remain competitive in the ever-evolving landscape. Upskilling and reskilling improve employee engagement, increase talent retention, boost productivity, enhance the customer experience, and help future-proof businesses. All of these benefits are vital to prepare for the radical digital transformation that companies face. 

Benefits of Upskilling Employees

An organization's lack of career growth opportunities is a main driver for employee turnover. Individuals do not want to stagnate. Challenges, stretch assignments, and growth opportunities are vital to keeping talent invested.

Growth and advancement are not solely concerned with turning individual contributors into managers. Allowing an employee to upskill and giving them a senior specialist position with fresh challenges and responsibilities can make a massive difference.

Upskilling programs build a company's talent pipeline, meaning the organization can look within for leaders and people to fill senior positions. Having an internal pipeline saves the time and resources the company would require for external talent search and recruitment. In turn, employees feel valued and get the learning opportunities they seek. Their boosted morale can lead to increased productivity and greater employee satisfaction. The improved skill sets in and of themselves can also positively impact organizational goals and growth.

Benefits of Reskilling Employees

The rapid technological change and increased capabilities of AI and machine learning mean a fundamental reformation of jobs. The World Economic Forum predicts that 1.1 billion jobs will significantly transform due to technology by 2030.

Organization leaders will face a growing skills gap if they don't prioritize reskilling in preparation for this. Finding outside talent will also prove to be more costly as specialized skilled workers become in demand. 

Reskilling prevents job loss and improves employee morale. Taking a proactive stance demonstrates to staff that leaders are future-proofing the organization in a way that considers employee wellbeing. Reskilling helps companies invest in employees in the long term, benefiting the team and the business's bottom line. Organizations can invest in individuals to meet demands for scarce skills, focusing on reskilling employees in redundant positions instead of retrenching them or looking to external talent to fill gaps. Layoffs spread uncertainty and taint employee morale, and recruitment is expensive. 

Reskilling will help companies increase staff engagement, save on recruitment and severance costs, and remain competitive.

Why Upskill/Reskill Instead of Hire for Skills?

The cost of hiring and onboarding a new employee has always been expensive, and with the long hiring cycles that organizations are now seeing, this cost is boosted even further. Because of the labor shortage, workers can command higher salaries, and this can cut into the bottom line. By hiring a candidate with the intent of upskilling and/or reskilling, companies can keep hiring costs lower, and appropriate knowledge can be transferred and cultivated.

An additional way that upskilling and reskilling can benefit a company is by showcasing internal mobility to employees. These companies can retain employees by showing the possibility for internal mobility, which also increases employee engagement. If a company shows employees that there are opportunities for learning and growth within their current organization, those employees are less likely to seek out those opportunities elsewhere.

• Studies say that 94% of workers would stay at their company if their company invested in their careers.

If organizations give staff members growth opportunities where they are, these staff members will be less likely to want to leave.

Reimagining Corporate Learning and Development

If businesses know that skills are going extinct as soon as two-and-a-half years after they are acquired, these businesses should be continuously running a needs analysis, understanding what new business needs are, and what skills will have to be acquired by staff to address those needs.

In combination with this, a tighter alignment with business partners is crucial. Really forging strong bonds with business partners to anticipate future adaptability will help ensure success, taking a look at what the needs of each area are.

Ensuring that learning and development is at the forefront of the work that your organization is doing is important so that leadership can prepare staff for further changes that are coming. Yet, many executives often overlook this aspect of their organization. In fact, according to a study by the Brandon Hall Group:

• 76% of companies say business leaders would rate learning a 4 or 5 on a 5-point scale of importance to the organization.
• Yet 45% of companies rate themselves a 4 or 5 on a 5-point scale of how integral learning is to the organization’s culture.

The Bottom Line

As the business ecosystem and world at large continue to evolve and advance at an ever-increasing speed, companies and organizations must make learning and development a continuous part of their staff’s daily lives. Reskilling and upskilling must be offered in some capacity to both new and old hires in order to increase employee retention and keep the organization up to date with the latest industry trends and best practices.

Partner With Us for Innovative eLearning Solutions

At Intellezy, we are champions of the ‘people side’ of change, creatively designing, developing, and executing all stages of training. We know what it takes to pull off a successful technology rollout – and it involves much more than a smooth deployment. It takes a human-centric approach to ensure that no user is left behind. Every team member deserves the opportunity to broaden their skillset, feel happier at work, and add value to your organization. From end-users to managers and stakeholders, our certified consultants guide organizations toward success for all.

Whether you need a full-scale, robust training program or smaller-scale assistance with executing your learning and development plan, enjoy the flexibility to choose how involved you’d like us to be.

Are you ready for a change partner that’s wholly invested in your success? Contact us online to to discuss your company’s unique needs and how we can implement them into your organization.