The importance of upskilling and reskilling in building a future-ready workforce

With a rapidly changing job landscape and accelerated pace of tech innovation and automation, HR managers or leaders have placed a high premium on upskilling and reskilling to understand the critical needs of the workforce. As a result, more than ever, employers are turning to hiring candidates with the adaptability and resilience to thrive in a continually evolving workplace environment.

According to the World Economic Forum’s Future of Jobs Report 2025, the skills gap remains the most significant obstacle to business transformation in response to global macro trends, with 63% of employers identifying it as a primary barrier to future-proofing their operations. If a group of 100 people represented the global workforce, 59 are projected to need reskilling or upskilling by 2030, with 11 of them unlikely to receive it. This situation translates to over 120 million workers facing the medium-term risk of job loss or redundancy. This data underscores the need for reskilling and upskilling to prevent job redundancies and prepare employees for future roles.

Organizations must bridge these gaps efficiently and align their workforce with evolving job and business needs. The answer lies in a talent mobility strategy focusing on upskilling and reskilling employees. This blog covers numerous aspects of upskilling and reskilling employees, including their differences, benefits, importance, best practices and more

Upskilling is the process of enhancing employees’ skills, enabling them to acquire new skills within their current job function, thereby improving performance. Upskilling helps employees bridge the skills gaps through continuous professional development. It is crucial, as it allows employees to stay abreast of emerging business trends and practices, thereby helping organizations remain competitive in the market.

Businesses should implement employee upskilling programs to keep them aligned with ongoing trends. Additionally, employees are more likely to showcase their best work in a company that meets their development needs.

The employee upskilling process involves imparting new skills and increasing employee competency and efficiency. The more skilled the workforce is, the easier it is for an organization to achieve its desired outcomes and remain competitive in the market.

Some crucial points stating the importance of upskilling have been outlined below:

Reskilling is the process of acquiring new skills required to perform a different job role. Reskilling ensures that employees remain engaged, motivated, and eager to develop new skills and gain expertise that benefits both the individual and the organization.

The need for reskilling in today’s digital age

In today’s digital age, a significant portion of the global workforce is compelled to change jobs as evolving automation, AI, and other technologies replace traditional employment. As economic changes driven by radical innovation and market forces unfold, workforces are adapting and responding actively. This challenge is leading to a greater emphasis on employee skill development, with organizations collaborating with employees to support their professional growth and development.

Employers are seeking professionals with skills that differ significantly from those they required in the past. However, changing job requirements is not the only area where skills gaps are becoming evident. Reskilling is essential to ensure that employees remain relevant and competitive. Some of the ways to reskill the workforce are:

Directing efforts on the most significant skills

It is unfeasible to reskill everyone across the enterprise at once. Successful companies make reskilling decisions based on skills that are imperatively needed. Organizations should recognize and prioritize the skills most critical to success, channeling efforts and resources where reskilling can address an immediate requirement. The more refined a reskilling strategy is, the better it can be implemented across other teams.

Finding employees with portable skills

Even though reskilling is about imparting new skills, the process is simplified if employees under consideration possess a few transferable skills. Organizations can start creating a skills database and represent it across the enterprise. This database can help them uncover underlying skills gaps and identify employees who can smoothly transition to new roles.

Encouraging participation

The task of acquiring new skills for new roles may baffle some employees. By providing employees with clarity on plan, purpose, and responsibility, one can help them understand that reskilling is crucial for sustaining long-term business success. They must be informed about the support they will receive throughout the process. Linking reskilling achievements with quarterly targets or promotions will encourage employees to overcome inertia and concern.

Helping employees explore cross-training possibilities

Cross-training is an effective way to equip employees to perform other job functions that fall outside their regular duties and responsibilities. For example, job rotation or specific assignments can help employees expand their learning horizons, increase their awareness of company operations, and allow them to explore new skills and interests. Organizations can identify mentors and prepare a learning module with progress tracking to understand employees’ concerns early on and their level of engagement.

Tracking the success metrics

Reskilling is a complex process influenced by multiple factors, including motivators, training quality, and investment. By setting clear objectives and analyzing success metrics, organizations can determine which training approaches are most effective and which are least effective. The goals should be measurable, achievable, focused, relevant, and time-critical.

While upskilling and reskilling are often interchangeable as they pertain to skills acquisition at large, they have subtle differences, as listed below:

Most organizations already have several learning assets or programs in place. These assets must be reviewed to ensure they meet the organization’s existing and future skills requirements. While reviewing the learning programs, the concerned person should consider the following:

• What more can be integrated into these programs to deliver an enriched learning experience?
• Are programs available in variegated forms, such as online, self-training, peer-to-peer, micro-learning, etc.?
• Are the learning programs aligned with the employee’s needs?

The success of any upskilling and reskilling strategy is determined by how well the HR teams are aligned with the talent acquisition (TA) department. They must analyze the candidates they are looking for and identify the critical skills required for new hires.

Modern human resource and learning and development (L&D) processes are becoming increasingly streamlined with the help of technology. These tools can help employers collect, store, and analyze valuable data to identify skills gaps and create a targeted plan for the most suitable individuals.

The HR tech landscape is teaming up with advanced software solutions to help organizations analyze skills gaps, conduct training needs assessments, and upskill and reskill their workforce.

Employees participating in an upskilling or reskilling program must be kept informed of the latest developments and receive regular feedback on their progress. These standard feedback loops will help organizations identify top performers and enhance opportunities in training and development programs early on.

Skill assessments help identify employees closest to the desired skill set. Additionally, they enable organizations to identify skills gaps within their workforce. With these assessments, managers can assess the level of learning through upskilling or reskilling programs.

Mercer | Mettl empowers organizations to execute an end-to-end upskilling and reskilling strategy in simple steps. Mercer | Mettl’s Skills Gap Analysis helps businesses understand the training requirements to identify the current skills gaps and skills required through structured assessments. This is done through robust and technologically advanced tools. The holistic assessment tools accurately and scientifically measure domain skills, coding skills, personality traits, cognitive ability and communication skills.

Some Mercer | Mettl tools that organizations can exclusively use for their upskilling and reskilling programs are:

1. Virtual Assessment and Development Centers (VADCs)  

Mercer | Mettl’s Virtual Assessment and Development Centers (VADCs) can help gauge an individual’s skills, fitment and developmental needs in a company. VADCs automate the process using digital tools, helping organizations find high-potential workers, plan strategic employee development, and analyze training needs.

2. 360-Degree Feedback Tool

Mercer | Mettl’s 360 Degree Feedback Tool differs from conventional assessment software as it uses a multi-rater approach. The tool collects ratings from multiple sources, like peers, managers, and clients. Apart from making the performance evaluation seamless, the 360-Degree Feedback Tool also helps:

• Identify gaps in skills as perceived by other stakeholders
• Identify high-potential (HiPo) employees
• Get a holistic overview of an employee’s performance

3. Training Needs Analysis

Mercer | Mettl’s Training Needs Analysis enables organizations to identify their training and skills requirements. It also helps design an effective training program that meets the business’s needs. The tool works in three simple steps:

• Identifying what to train
• Spotting agile learners who can be quickly trained, and
• Measuring the effectiveness of the training programs.

As the business landscape continues to change, organizations need to understand the importance of upskilling and reskilling programs. Such programs can help organizations thrive despite economic uncertainties and pivot with changing demands.