Why Upskilling Is Key for the Future of Work
Imagine this: your organization has a complete headcount, and business is ticking along smoothly. But when you start to map out your company’s future, you realize your workforce lacks vital skills.
So, how will you drive your business forward and meet those future goals?
While some businesses panic and commit to costly recruitment strategies to fill these skills gaps, others understand that upskilling is a better strategy.
The World Economic Forum predicts that over half of all global employees will need to upskill or reskill by 2025 to keep up with the evolution of jobs. The reward? We can expect global GDP to be boosted by an eye-watering $6.5 trillion by 2030.
The message is clear - the world is changing. Yet only 34% of workers are satisfied with the menu of skill development opportunities offered by their current employer.
So, how and why should modern companies commit to upskilling?
📈 What is upskilling?
Upskilling means improving your employees' existing skills to bridge the gaps in your business.
After discovering where these gaps lie, you'll invest in initiatives including training and mentoring to upskill your current team. By doing so, you're prioritizing talent development instead of recruitment which you can use to address your business' current and future needs.
"Treat skilling as a business investment, not an expense." Theodora Lau, Founder of Unconventional Ventures.
Upskilling encompasses both hard skills and soft skills. Hard skills are job-specific skills (including technical skills) typically learned through training or education. Whereas soft skills refer to interpersonal traits and competencies such as problem-solving, teamwork, and communication.
A Skills Gap Trend report reveals the most in-demand skills from each of these categories:
In-demand soft skills
- Customer Service
- Detail Oriented
- Self Motivation
In-demand hard skills
- Agile Methodology
- Business Development
- Mental Health
🆚 What are the differences between reskilling vs. upskilling?
Read any guide on upskilling, and you're bound to come across the topic of reskilling too. These terms are often used interchangeably, but there are marked differences between upskilling and reskilling.
"Though upskilling and reskilling take employee learning and development into two different directions, both are great for helping talent grow." Jason Wiggins, Business Advisor.
Reskilling allows your employees to gain new skills in a different direction from their current career path, exploring different areas of interest and broadening their skillsets. This might include lateral skills training across various departments or trying out a new job role that better fits the company.
💡 We have rounded up 10 steps for making reskilling a reality for your employees.
Upskilling is more linear. It focuses on developing an employee's existing skills to progress in their current role.
Upskilling initiatives might include
- taking on new assignments
- attending workshops and conferences,
- working with a mentor before a promotion,
- or many others.
❗️Why is upskilling important now more than ever?
Upskilling is vital for both employers and employees alike.
For employers, the threat of the Great Resignation means that employees are keen to go wherever there's a better offer.
Talent leaders who can offer upskilling to employees will boost employee retention rates.
In fact, 94% of employees would be happy to stay with an employer who invested in their career development.
For employees, there's increased anxiety surrounding the risk of automation caused by artificial intelligence. 46% of employees are concerned their current skill sets will be redundant by 2024. Those willing to reskill could be in line for an average 8.6% salary increase, which is the equivalent of an $8,000 pay rise.
But most important? In an Amazon study, 2 in 3 workers believe upskilling has improved their quality of life and standard of living. And that's hard to argue.
💪 What are the benefits of upskilling?
Upskilling is quite an investment, so what's in it for companies? Rachel Carlson is the Founder and CEO of Guild Education Founder. She breaks down the benefits of upskilling here:
"The future of work has arrived. It's here. It's no longer in the future. Companies have been preparing for that for quite a while, but workers are realizing it today and in a very present and urgent way. We're actually seeing a fair amount of alignment as a result; it aligns the desires of the employee who's thinking about what's next for them with what employers need, which is to prepare their workforce of tomorrow.
The number one thing we're seeing is that millennials, Gen Z, but even boomers want to work at a company that provides career development. We're seeing companies that are offering education and upskilling are the ones that are winning today's war for talent and are pulling people from one company to the next."
Let's take a closer look at some of these benefits.
Improved employee engagement
A complete headcount is useless if your employees aren't engaged. But by investing in your individual team members' careers through upskilling and/or reskilling, you'll create engaged and dedicated company employees.
The proof? 86% of CEOs reveal that launching their digital training and education programs resulted in greater employee engagement.
Better yet, 93% of CEOs who have implemented upskilling programs see increased productivity.
Why? When you equip your team with the skills and tools they need to progress in their roles, you're freeing up time to spend on value-add activities such as improved communication and problem-solving.
Part of upskilling will be training your team members to use automation tools to eliminate the need to complete repetitive daily tasks.
The great news for leaders is that some 77% of employees are willing to learn new skills like these or retrain entirely.
The pandemic highlighted how vulnerable a business is when change is forced upon it. By supporting employees with their personal and professional development, leaders can drive agility and resilience within their organization. The new insights and business knowledge gained also make companies more competitive.
Of course, the pandemic is only one reason businesses have been motivated to become more agile.
Changes in consumer behavior had long been in the pipeline, as explained by Mark Jackson, SWP Manager of Nationwide Building Society, "With banking becoming more digital, the behavior of our customers is changing, and our skills need to change too."
Saves money and resources
The Association for Talent Development reveals that upskilling an existing employee costs $1,300 compared to the average recruitment cost of $4,425 to hire a new candidate.
Bill Blase, Senior Executive Vice President of HR at AT&T, explains the financially-driven decision to upskill once the company realized only 50% of their employees had the necessary STEM skills required.
"We could go out and try to hire all these software and engineering people and probably pay through the nose to get them, but even that wouldn't have been adequate.
Or we could try to reskill our existing workforce so they could be competent in the technology and the skills required to run the business going forward."
📊 How to develop an upskilling strategy
Effectively upskill your team by progressing through these steps:
- Audit your current skills base - identify the breadth of skills present in your workforce, determine which will be phased out and which you'll need both immediately and in the future.
- Identify the skills you need - take competencies and role descriptions into consideration here.
- Set business goals and objectives - develop a business plan and forecast how your collective skills will achieve your company mission.
- Monitor the progress of your strategy - regularly check-in to see if any new skills gaps are emerging.
🌱 6 Ways to upskill your workforce
But what does your upskilling strategy look like in action? Here are some best practices to follow.
1. The base: Use a development framework
A career development framework is at the heart of any upskilling program.
This should be an iterative process between a leader (line manager, talent manager, or HR manager) and an employee. Your progression model should focus on skills and competencies to improve or acquire during the development cycle, along with the employee's ultimate career goal.
Introduce career mapping to help establish any desired promotions or lateral moves and the skills required for these roles.
⚙️ Employee growth software helps you easily set up a career development framework that gets used and drives maximum impact.
2. On-the-job training
On-the-job training or OJT enables employees to learn practical skills taught by current leaders and colleagues with more experience. Compared to classroom-based learning, a structured OJT strategy including performance metrics fast-tracks the upskilling process.
As a result, employees will quickly learn new skills and apply them as part of their role: learning in the flow of work.
👀 Check out Zavvy's ready-to-use training courses.
3. Communities of practice
When groups of people come together for regular interactions and a passion for what they're doing, these communities of practice can improve performance in an organization. Such communities of practice might include roundtable discussions and mentoring opportunities to accelerate knowledge sharing and creation.
For example, Zavvy's community is a place for motivated People Operations professionals who want to make a strategic impact.
🧑🤝🧑 We learn from each others' experiences and concrete examples from top-notch companies.
4. Bite-sized upskilling opportunities
Micro-content, including interactive content and quizzes, runs from 1 to 15 minutes and easily fits into the busy working day. And this approach to training is effective too!
A report by Software Advice reveals that microlearning produces 50% more engagement than longer courses, as the content is easier to digest and retain.
Our own experience running microlearning programs at companies like Freeletics indicates similar results.
5. Lateral training
Upskilling your workforce isn't just about being promoted up a ladder, one rung at a time. Many employees can experience an enriching career by transitioning sideways into different departments.
8 out of 10 female executives have made nontraditional career moves, including lateral job changes and learning leadership skills as part of their overall career development.
6. Formal course platforms
Online course platforms offer recognized certification and upskilling programs from respected providers. They also provide on-demand training to fit in around work schedules. Choose from course platforms such as:
🏢 5 Upskilling examples in action
We've dug out 5 examples of companies that have committed to upskilling their teams and are enjoying fantastic results!
Amazon has committed to a $1.2 billion investmen in upskilling training for 300,000 employees, enabling them to make meaningful career changes into technical roles such as cloud computing or machine learning.
The program began in 2019 and will run to 2025, providing access to free training programs and college tuition.
Twilio runs an internal boot camp to nurture new developers who require customized training. Their Hatch program takes internal nontech employees and reskills them into production-grade engineers.
The program uses regular technical skill assessments across several custom phases to measure progress gradually.
PwC has invested $3 billion into its "New World, New Skills" program, including the Digital Fitness app. This motivates employees to work on their digital skills while mapping out new learning paths and continuously upskilling through on-demand and micro-learning.
This insurance company has developed the Pursuit Learning Hub, an online DIY learning center offering a wealth of personal and professional development courses. Leaders may suggest topics of interest, but ultimately employees have the option to enroll in any class they like.
There's no limit to how many courses they can attend to progress in their careers, and the company provides one afternoon of paid leave per month for their development. The response? Employees collectively completed a whopping 12,000 hours of training during October 2021 alone.
Among its numerous L&D programs, Starbucks runs the Starbucks College Achievement plan, offering 100% tuition coverage for all employees. Separate programs cover leadership and soft skill topics, with e-learning programs like the Starbucks Experience and Shift Supervision to upskill existing team members to deliver the customer experience associated with their brand.
🧠 How to build a culture of learning
Several common challenges crop up when trying to develop a culture of learning.
- Employees lack time
- Companies lack resources or budget
- Employees have a "what's in it for me?" mindset
- Key stakeholders aren't on board
- Lack of expertise and leadership
But adopting a growth mindset is essential for companies who want to succeed. Building a culture of continuous learning (rather than occasional training!) is surprisingly straightforward when you introduce the following:
- individual personal development frameworks;
- tailored coaching sessions;
- access to user-friendly training resources, including micro-learning modules and on-demand training;
- career maps that motivate employees to see a clear goal and plot their progression from A to B;
- continuous feedback to help employees stay on track and provide constructive input, whenever needed.
🔮 3 Upskilling trends for the future of work
Upskilling is a sensible way for employees to future-proof their careers by adding strength and depth to their skillsets. While the pace of learning and development is moving quickly, we're seeing some current upskilling trends in relation to the future of work.
1. Post-pandemic optimism about employee learning and development
The pandemic has created renewed interest in learning and development, with 73% of companies upskilling employees to adapt to the "new normal." Many companies leaned on their workforces during the darkest stages of the pandemic to react quickly to digital transformation or shifts in business direction. And the result is positive for both employees and employers.
2. Motivated employees upskilling outside of the workplace
Employees aren't waiting around for companies that haven't been as proactive in upskilling their teams.
55% of employees are seeking external learning and development opportunities. Of these, 70% are upskilling outside of work to stay relevant and keep up with the latest trends, while 61% wish to remain competitive in the job market. 50% are keen to pick up new skills outside of their regular role.
3. Focus on both soft skills and tech skills
Employees recognize that both soft and technical skills are in demand - and they're upskilling in both. 59% of upskillers are getting to grips with AI or software proficiency, while 53% are progressing in soft skills like leadership and communication.
➡️ Zavvy: Your upskilling strategy, solved
Upskilling is a win-win for everyone involved. If your company has skills gaps to fill and wants to retain promising employees and nurture their talents, then upskilling or reskilling are both viable options.
And as a slam-dunk for future-proofing individual careers, employees would be mad not to commit to upskilling.
Reach out to start creating a cycle of continuous growth using our employee development systems to streamline learning and development for your team.
The sooner you get started, the sooner you'll reap the rewards of upskilling.