Reskilling: What it is, Why You Need It, And How to Nail it

Are you struggling to retain your employees? Reskilling your workforce might help you deal with that.

Gone are the days when fresh-eyed workers would finish college or complete apprenticeships before joining a new company to start their "job for life." 

Instead, recent tenure studies show that employees are chopping and changing jobs quickly, usually within five years of their start date. 

The Work Institute cites "career reasons" (including opportunities for growth and to attend school) to explain why employees leave companies who don't invest in L&D like their competitors.

Employers that don't understand the relevance of this are in danger of falling behind. 

Yes, continuous learning and development can be expensive, and it's a shame if your employees move on quickly after they've gained new skills during their time with you. 

But imagine if they stuck around a while! 

Investing in your employees' futures will improve your company's future by plugging emerging skills gaps and solving your recruitment nightmares, which is the essence of why reskilling employeesis essential for your talent management strategy.

Throughout the rest of this guide, we'll explore how to build skills from within your organization instead of buying them externally.

💪 What does reskilling mean?

Let's start with a reskilling definition. 

Reskilling is the process of companies supporting their employees to develop brand-new skills so they're equipped to explore new roles, preferably within the same organization.

Employees broaden their horizons by expanding their skillsets. And employers benefit because they don't need to hire and onboard new joiners to acquire the skills they need for business progression. 

"The only thing worse than training your employees and having them leave is not training them and having them stay." Henry Ford, founder of Ford Motors.

🌱 Reskilling as a strategic response to changing skill demands

Whether it's humans trying to keep pace with automation and technological advances or businesses drastically shifting focus thanks to the demands of the pandemic, there are numerous reasons why skills gaps are opening up. 

Companies are fully aware of the extent of their skills shortages: 

• 79% of CEOs frequently worry about the gap between their workforce's existing skills and their ability to meet business needs, highlights a PwC report.
• 87% of companies are aware they're already suffering from a skills shortage or will be in the next few years, according to McKinsey.

As role competencies change at a rate of knots, the World Economic Forum predicts that more than 1 billion workers worldwide must be reskilled by 2030.

And that doesn't include those who aren't currently employed. 

While graduates are often considered the answer to bridging industry-wide skills gaps, they can only do so much without in-seat experience. 

A Bloomberg survey of the graduate market found that 34% of corporations and 44% of academic organizations felt grads possessed hard, technical skills but lacked soft skills needed to succeed in the workplace. 

The changing landscape of jobs: jobs growing in demand vs. waning in demand 

The World Economic Forum highlights significant adjustments in growing vs. decreasing job demands. 

This table shows the importance of reskilling — if your company has employees in the right-hand column, what skill development opportunities can you offer to fill jobs on the left? 

Is your workforce ready to meet the economic demands of the next decade?

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Tip: Use development plans to document each employee’s reskilling activities. It makes the process more transparent and easier to track. 

➡️ Find out how to create powerful development plans for your employees in 8 easy steps.

❗5 Key reasons why reskilling programs are important for your organization

Still on the fence about reskilling your team? These tangible benefits of reskilling will persuade you to commit. 

1. Reskilling reduces hiring costs 

External candidates with specialist skills often find themselves at the center of a bidding war between different recruiters. These job-seekers are in a fantastic position to earn inflated salaries, meaning companies pay through the nose for relevant skills they could have acquired through staff reskilling programs. 

Josh Bersin, president and founder of Bersin & Associates, concludes that it's six times more affordable to build skills from within rather than buy them from outside once you've paid for recruitment fees, onboarding, advertising, etc.

The average cost of reskilling a US worker is $24,800 per person. 

This sentiment is echoed by Nelson Sivalingam, CEO at HowNow, author of Learning at Speed, and Host of the L&D podcast. He says: 

"Reskilling is the new recruitment. It's expensive and time-consuming to find new hires. And given the rate at which new skills are needed, you can't keep buying talent every time you need new skills.

As an organization, you need to learn how to build those skills rather than keep buying or borrowing. That's why organizations should be investing and learning from within." 

So, apart from reducing recruitment costs, reskilling also means benefiting from your existing workforce that already possesses strategic company knowledge.

2. Attract and retain top talent by promoting career advancement

87% of HR leaders believe investing in employee learning, and skills development programs is a critical talent retention strategy. 

Individual employees know they must update their skills regularly to avoid professional stagnation and stay relevant in the job market. So they look at their current employer and assess what's on their L&D skills training menu. If the answer is lacking, they'll move on to an organization with greater growth potential. 

3. With reskilling, you'll build more versatile employees 

When continuously upskilling and reskilling your workforce, you're supporting employees to discover new talents they can apply to future roles, and bridge skill gaps. 

Research suggests that 85% of the jobs we'll be working in 10 years from now don't currently exist. 

The only way to prepare individuals and companies for the upcoming shift is to keep investing and applying skills training. Versatility ensures your company will overcome any skills crisis. 

4. Reskilling enables succession planning 

Succession planning is a business strategy where companies invest in identifying and training future leaders.

The aim is for a smooth transition between an outgoing leader and the person stepping up to fill their shoes. 

Pinpointing suitable succession candidates is step one of the process — the next is offering a wide range of upskilling and reskilling opportunities along the specific career path you've mapped out for each successor. These might include job rotations, shadowing, and mentoring as well as formal training.

5. Meet sustainability goals 

As companies strive to become more sustainable, they need employees with the skills to make this happen. 

For example, developing a solid environmental policy requires a green workforce, and the current talent numbers don't add up. 

LinkedIn's Global Green Skills report of 2022 shows that the share of green talent in the workforce has grown from 9.6% in 2015 to 13.3% in 2022. This highlights positive growth of 38.5% in 7 years.

But the same report explains that the rate of jobs requiring green skills has grown to such an extent that there will be a shortage by 2026. 

Companies can solve this problem in advance by reskilling their current workforce with relevant sustainability training and green career growth opportunities.

💡 How to get started with reskilling in 10 steps

Once you've decided to prioritize reskilling, follow this ten-step plan to build skills from within your organization. 

1. Identify employees with transferable skills

Your employees are already brimming with skills, many of which are transferable to future roles or tasks.

For example, suppose your team has been using critical thinking and problem-solving skills to solve complex customer service issues. These same skills might also be useful in product development.

Brainstorm with your team and list employees with:

• the most in-demand skills;
• the core skills necessary for meeting future demand;
• any underutilized talent.

Tip: Use a combination of self-assessment surveys, performance evaluations, skills assessments and tests, and 360-degree feedback to gather data on employee skills.

2. Prioritize the essential skills 

A skills assessment will identify your company's collective skills sets versus those skills required to close the gap.

• Consult with employees, managers, and subject matter experts to gather input.
• Consider industry trends and changes that may impact the required skills.
• Prioritize the skills based on their importance to the organization.

Next, your training needs assessment will identify the learning programs you must include as part of your reskilling plan.

3. Offer incentives for reskilling 

Even though we've highlighted that reskilling serves employees well, and many are hungry to learn, some may need a little convincing. 

Offering enhancement opportunities as part of an employee benefits package can incentivize employees to reskill and reduce any feelings of anxiety about changing roles. 

Best tip of all? Showcase examples of people in your company who have reskilled, enabling successful internal mobility, and enjoyed individual career growth thanks to your training opportunities.

There's nothing like social proof to get people on board!

4. Seek out specific skills training 

Get specific about how you'll reskill your team.

A blend of formal learning versus informal learning often works best. 

You might try peer-based development, learning in the flow of work, microlearning, or even on-the-job training mixed with remote or classroom-based training resources.

Tip: There are many eLearning platforms out there that can help but don't forget about the wealth of learning opportunities available outside of online courses.

Include webinars, books, articles, and even podcasts.

5. Encourage job shadowing

Who better to learn from than a skilled employee who can impart their wisdom to a trainee? 

Tip: Job shadowing is an excellent way for employees to learn new skills while continuing to work. 

And it's not just the trainee who benefits; the shadower also gets a sense of satisfaction from helping someone reskill. 

Perhaps they'll also develop their leadership and communication skills during training!

6. Help employees leverage their expertise

Your employees are experts in their field, each with a fount of reskilling knowledge to share. This could be in the form of writing blog posts, giving talks, or even just informally mentoring a colleague.

Not only will this help your business develop new content and improve your employer brand, but it will also give your reskilling program some valuable social proof.

7. Provide cross-training opportunities and rotations 

Cross-training is when employees learn to do the job of another team member, and it's an excellent way to reskill your workforce. This gives employees a better understanding of the workings of different parts of the business machine and builds a more collaborative culture.

Tip #1: Set up cross-training by creating internal job postings and allowing employees to apply for positions outside their current team. 

Tip #2: Another option is to create rotation programs, where employees spend a set period working in different departments.

8. Collect and analyze metrics of success

Make sure your reskilling program has measurable goals so you can track progress and ensure it's meeting the needs of your business. 

Perhaps you want all customer service reps to be reskilled in product development within six months. 

Or maybe you want half of your marketing team to be reskilled in data analysis within a year.

Tip #1: Whatever your business goals, collect data throughout the reskilling process to track progress and identify any areas that need improvement. You could include surveys, focus groups, interviews, or informal 1:1 check-ins. 

Tip #2: Evaluate and adjust as needed.

Tip #3: Don’t forget about feedback. Help your employees stay on track with constructive feedback.

9. Adopt a career development software

Utilize new technology to streamline your reskilling program. 

For example, employee development software solutions will assist in putting together a career progression framework and creating a customized training plan for each employee. It will also track employees' progress and identify any skills gaps. 

Tip: Employee development software is an invaluable new technology for reskilling your workforce, saving time and effort in the long run.

10. Celebrate the successes of your reskilling initiatives

Employee recognition is a powerful motivator, so celebrate the successes of your reskilling program along the way to prove you're committed to developing careers.

You could celebrate individual reskilling milestones, such as when an employee completes a course or achieves a certification. 

Or you could celebrate the program's success, perhaps with a company-wide event or an award for the most successful reskilling team. 

➡️ In need of extra ideas? Check out our exhaustive list of employee recognition ideas (💡 42 ideas to be precise).

🤯 7 Mistakes to avoid when reskilling

1. Lack of a clear strategy: A well-defined strategy for reskilling your employees is the first step to making reskilling a success. This strategy has to align with your overall business practices and goals. Without it, your company will struggle to identify which skills are crucial to develop and which training programs will be most effective.
2. Limited investment: Reskilling can be a significant investment for a company in terms of time and money. So, your company has to be willing to invest in training and development programs. Otherwise, it may struggle to provide its employees with the necessary resources to acquire new competencies and knowledge.
3. Inadequate assessment: Without a good understanding of the current skill sets of your employees, you would have difficulty developing effective training programs. So, you'll need to thoroughly assess your employees' skill sets and identify areas where training is most needed.
4. Resistance to change: Some employees may resist learning new skills, particularly if they have been with the company for a long time and are used to doing things a certain way. So, you must get your employees to buy into the reskilling process. Some methods to achieve this include incentives for employees to engage in reskilling activities, such as promotions or salary increases.
5. Rapidly changing skill requirements: In some industries, the skills required to succeed are changing at an unprecedented speed, and many companies struggle to keep up. Your company will be unable to anticipate changes in the skills landscape and adjust its reskilling efforts without conducting thorough skills assessments to understand employees' current skill levels better and the core skills for the future.
6. Poor training quality: You must ensure that your reskilling programs are high quality to ensure long-term success. Formally training employees may not be sufficient to help employees acquire new skills. Effective training requires a well-designed curriculum, materials, and skilled trainers who can deliver the content effectively. Plus, you will need to engage your learners andoffer opportunities to put their knowledge in practice.
7. Ineffective communication: Ineffective communication is one of the reasons why companies struggle with reskilling their people. Clear communication of the benefits of reskilling and the resources available to support it will help your people feel more engaged and motivated to participate.

🔍 4 Reskilling programs examples

These real-life examples show how major corporations are heavily investing in reskilling programs.‍

Bosch, a global engineering and technology company, committed €1bn in reskilling costs over five years. 

Bosch began a drive called "Mission to Move" in 2018, with 500 employees already completing training which takes up to a year. 

They will expand the program to thousands more employees within their global workforce, offering reskilling opportunities covering areas like automation and artificial intelligence, electric cars, and "industry 4.0." 

PwC launched its "New World New Skills" reskilling program in response to a lack of digital skills in the industry. This initiative invites employees to "imagine an Olympics where only two athletes are good enough to qualify. That's what's happening in society today." 

Accenture has invested an annual 1 billion USD in its reskilling, training employees , and learning initiatives to provide millions of training hours for employees. 

More than 70,000 professionals have received training since March 2020. Plus, the company has increased training hours by 6% while reducing costs by 11%, thanks to digital learning platforms.

Since 2019 and through 2025, Amazon has dedicated 1.2 billion USD in free training programs and college tuition for around 300,000 employees. 

Amazon's reskilling program targets Amazonians across corporate offices, tech hubs, distribution centers, retail stores, and fulfillment centers. 

Kevin Kelly, Director of AWS Education Programs, spoke on the HR Happy Hour podcast about Amazon's Get IT reskilling program:

"This encourages young women to consider careers in tech. We challenge some of the gender stereotypes within the industry and bring in role models and mentors so that these young women can see themselves in these roles. We're really trying to help early career talent get past imposter syndrome."

➡️ Reskill and develop your workforce with Zavvy

Zavvy understands that time is of the essence when reskilling your team.

That's why we've created our employee development software that puts learners in the driving seat, empowering them to take ownership of their reskilling journey with ease and speed. 

Use the tool to create role cards, so you'll quickly identify which skills are required and missing from your organizational line-up.

From here, you'll work directly with your learners to build an employee growth plan, providing access to the specific reskilling programs they need to succeed. 

And for those interested in advancing in their career paths? Use our career frameworks to communicate your expectations for the skills required to gain higher positions or completely change career paths.

Incorporate 360 feedback loops to get a complete picture of their progress.

Arrange a demo with Zavvy's employee experience team today and begin reskilling your team to plug those skills gaps and meet the workforce demands of tomorrow. 

❓Reskilling FAQs

Stay tuned for answers to the most pressing questions you have about reskilling vs. upskilling and more! 

👀 What does reskilling mean? 

Reskilling is the practice of investing in skills training for your current employees. It's focused on preparing workers for significant job changes. For example, their role may be evolving, which requires new skills. Or, reskilling can enable employees to benefit from career growth opportunities within another area of the organization.

🆚 What is the difference between reskilling and upskilling? 

Reskilling and upskilling are two L&D terms that are used interchangeably, but there are marked differences between them. 

Reskilling refers to learning a new skill set, often in an adjacent role or entirely new occupation. We might reskill if we consider a different career path or want to move laterally within the company. For example, an accountant wanting to move into HR would need to reskill and start afresh in an entirely new discipline. 

Upskilling means developing an advanced set of skills at a higher level than is required in a current role. For example, a web developer might upskill by learning a new programming language. Or they could commit to leadership training before moving into a managerial position. 

🕖 How long does reskilling take?

Psychologist K Anders Ericsson, author of "The Role of Deliberate Practice in the Acquisition of Expert Performance," famously introduced the idea that it takes 10,000 hours of practice to gain skills or expertise.

On the other hand, Dan Coyle, author of "The Talent Code," disagrees with a culture of hour-counting, arguing that employee training can be much quicker so long as there is a conscious effort to learn. 

So, with companies facing a race against time, how does this translate into reskilling in the workplace?

A recent Future of Jobs Survey determines that 40% of employees need a maximum of 6 months to reskill, although the time may be extended for people working in the financial services or energy sectors. 

Reskilling often happens internally, with 94% of companies expecting their employees to learn during on-the-job training. Online learning platforms and external consultants supplement their development. 

Still interested in comparing reskilling to recruitment? 

A LinkedIn analysis of 400,000 confirmed hires found the recruitment process for engineering and research takes 48 to 49 days (median), with most hiring managers agreeing that employee onboarding should last a minimum of three months. 

The bottom line: recruiting is unlikely to save you much time and won't save you money compared to reskilling. 

👩‍💼 Who can benefit from reskilling? 

Reskilling is not an employee-centric activity; it's an organizational one.

That's because when you reskill your employees, everyone in the company benefits.

Here are some examples of reskilling employees: 

• A reskilled data analyst as a machine learning engineer can develop predictive models that improve decision-making across the business.
• A reskilled salesperson as a marketing manager can create content and campaigns that generate leads and close deals.
• A reskilled payroll assistant as a human resources coordinator can reduce employee turnover rates.

In each case, the reskilled employee obtains new skills and knowledge to solve problems in their department and across the organization. Cue: increased efficiency, innovation, and profitability. And added bonus: you'll retain company knowledge by preventing key employees from leaving.

Sounds good? Why not join the reskilling revolution today and enjoy the benefits of reskilling?

🎓 Why even new grads need to reskill for the future?

Even new graduates may need to reskill for the future because the job market is constantly evolving, and the skills that are in demand today may not be the same as those that will be in demand in the future.

Plus, technology is changing at an unprecedented pace, which means that even new graduates may need to acquire new skills and adapt to new technology, tools, and systems throughout their careers.

There is also a growing demand for interdisciplinary skills. Many employers are looking for employees who have a broad range of skills and can work across multiple disciplines.

By reskilling, new grads can expand their skill sets and increase their value to potential employers.