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

Talent Assessment | 8 Min Read

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. 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 research, it has been predicted that 85 million jobs may experience a tectonic shift in terms of allocation of functions between man and machine by 2025. Moreover, 97 million new roles will likely be created that would pivot around the division of labor between man, machine and algorithm.

No matter how many times you come across such data, it underpins the need for reskilling and upskilling to keep jobs from being redundant and prepare employees for future roles.

A McKinsey report revealed that nearly half (44%) of respondents stated that their organizations would face inevitable skills gaps in the coming five years. Another 43% addressed existing skills gaps in their companies.

But how can organizations bridge these gaps efficiently and attune their workforce to evolving jobs and business needs?

A talent mobility strategy indicating the need to upskill and reskill employees could be the right way. In this article, we will explore what the terms “upskill and reskill” signify, why they are necessary now, and what sets them apart.


What is upskilling?

Upskilling is the process of enhancing employees’ skills, enabling them to acquire new skills within their current job function that will help them perform to the best of their ability. The constant emergence of new technologies and changing face of the workplace post-pandemic have accelerated the need for upskilling. With technological evolution, new skills take precedence, and job requirements vary. As a result, there is a continuing necessity to look after employees’ training and development needs.

Upskilling can help employees bridge the skills gaps through continuous professional development. After all, learning new skills is crucial to stay abreast of the emerging business trends and practices, thus helping organizations stay competitive in the market. For example, an e-commerce start-up founder might upskill one of the managers with data analysis courses for better logistics and inventory planning and data-driven decision-making.


The importance of upskilling for organizational growth

Upskilling and reskilling are go-to strategies to foster organizational development by understanding the workforce’s strengths, abilities and shortcomings. Hence, businesses should administer employee upskilling programs to keep them in line with the ongoing business trends; also, employees are more likely to showcase their best work in a company that attends to 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 desired outcomes and stand competitive in the market. Although employee upskilling initiatives provide many benefits to both the employees and the organizations, some crucial points stating their importance have been outlined below.


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1. Minimizes cost and time

Considering the efforts and investments involved, recruiting a qualified job applicant to fill vacant positions is arduous. By upskilling existing employees, an enterprise will also instill multitasking skills by broadening employees’ horizons at work.

2. Helps curtail turnover rates

Why would employees want to associate themselves with a company that will not be concerned about their career trajectory? Such employees would likely start seeking a better organization that puts a premium on their career progression. Upskilling carves a learning culture that inspires the employees to associate with their organization for long, hence significantly contributing to higher employee retention rates.

3. Improves performance

Upskilling fosters skills improvement, enabling employees to explore the pathway to new skills and career progression. This empowerment leads the employees to master their current roles and helps the organization accommodate evolving business needs.

4. Helps develop self-awareness

Employee upskilling programs can help uncover strengths and limitations, which comes in handy in understanding new skills they should learn to improve their capabilities. Such programs enable employees to track their development every so often.

5. Improves efficiency levels

Every organization aims to attain higher-than-usual productivity. Upskilling the workforce will help them anticipate the diverse needs of different clients and accordingly deliver proper solutions.

Given below are some surefire ways to upskill employees

1. Pinpoint areas and skills that matter the most

Every employee looks for growth opportunities at work. To this end, organizations can invest in upskilling initiatives. However, a standardized plan will not work because every employee has different learning requirements and capabilities. Therefore, the initiatives laid down in the activity should align with employees’ areas of strength, needs and ways of learning. For example, if an employee is good with numbers and the other has good management skills, one must tailor the upskilling strategy accordingly.

2. Set clear goals for employees

While upskilling holds umpteen benefits for employees, organizations will receive maximum return on their investment when they zero in on skills and areas of improvement according to their vision and goal. For example, a company may want to ensure its data analytics team is updated on leading-edge software or that its marketing team is leveraging digital marketing tools to its utmost potential. Hence, the organization should focus on developing core competencies and concentrate on upskilling individuals whose roles will require those skills in the future.

3. Include upskilling in employee performance development plans

Team leaders or managers can underscore the importance of upskilling in supporting employee career advancement to ensure that all organizational stakeholders are on board with the idea.

For example, mastery of specific job-specific skills might be tied to an employee’s year-end discussions or promotional avenues. Senior leaders must also consider the time required to upskill and as needed, reduce the amount of work assigned to help them focus on acquiring new skills.

4. Encourage transfer of learning

Besides offering learning opportunities, organizations must promote a culture of continuous learning and knowledge sharing, including such initiatives as encouraging the transfer of learning among employees, conducting mentorship programs, finalizing learning goals for the team, etc.

5. Stretch assignments as a basis for upskilling

Stretch assignments can be the bedrock of an employee’s upskilling plan because such assigned tasks are beyond employees’ existing skill level or knowledge, providing them ample learning opportunities and preparing them to rise to new challenges. For example, an employee might be given a new role for an ad-hoc project (such as drafting a marketing plan or analyzing data). However, employees must be supported and provided with all the resources to meet the challenge and thrive in their new assignments.

6. Keep tabs on employee progress

As with any other strategy, assessing training outcomes is crucial for finding areas of improvement. Understanding what works and what doesn’t will provide employees with clarity to upskill effectively and help other managers dope out a suitable way to upskill their teams.

7. Increase motivation using rewards

Rewarding employees in return for their upskilling efforts will boost their morale and encourage them to play their role to the hilt. Acknowledging and cheering employees for their actions could create positive ripple effects. By providing adequate growth opportunities to the workforce via upskilling, a company can experience multifold productivity gains.


What is reskilling?

Reskilling is the process of acquiring new skills required to perform a completely different role. It focuses on the employee’s need to learn an entirely new skill set. In this ever-changing environment, economies and industries are susceptible to change. Hence, organizations need to pivot fast and lay the basis for reskilling for filling the new roles. They can do so by retraining their existing employees to take on those roles, which will keep companies functioning well even during times of change, free from the need for allocating time and resources to hire fresh talent.

However, it’s not only about saving time and resources. Reskilling also ensures that the employees stay engaged, motivated, and eager to develop new skills and obtain expertise and innovation skills that will benefit the whole organization.


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For example, a graphic designer might be inclined toward web development and related technologies. After skills assessment, this professional would be the natural choice for web development profiles. Since the professional is also ready to consider switching to a web development role, reskilling for a related position is a viable proposition for the employee and the organization.


The need for reskilling in today's digital age

In one of its studies, McKinsey revealed that a significant chunk of the global workforce would likely be compelled to change their jobs in the future as ever-evolving automation, AI, and other technologies tend to supplant traditional employment.

Moreover, as economic changes concerning radical innovation and market forces occur, workforces will have to adapt and respond accordingly. The probable outcome of this challenge will be an enhanced emphasis on employee skill development – and the most feasible way to go about it would be to work jointly with employees toward their professional development.

While job descriptions are less likely to remain static with changing times, the continual evolution of automation and market volatility will speed up pushing redundant jobs toward obsoletion. Consequently, employers will look for professionals with entirely different skills than what they were seeking some years ago. However, changing job requirements is not the only aspect where skills gaps are evident.

Most companies moved all or parts of their processes online during the pandemic, and many employees reinvented themselves in terms of acquiring new skills on the fly. However, the viable but sudden transition made many corporate leaders and L&D professionals acquainted with the underlying problem of skills gaps in their employees. Firms that don’t address reskilling issues early on stand to lose ground to their competitors. Contrarily, organizations that prioritize reskilling can reap the benefits of their efforts.


Given below are some fail-safe ways to reskill your workforce


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1. Direct 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 rather than anything else.

As a best practice, organizations should recognize and rank the skills most critical to success, channelizing efforts and resources where reskilling could address an immediate requirement. The more refined a reskilling strategy is, the better it can be implemented across other teams.

2. Find employees with portable skills

Even though reskilling is about imparting new skills, the process simplifies if employees under consideration have a few portable (transferable) skills up their sleeve. 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.

3. Encourage more participation

The task of rigorously learning new skills for new roles might baffle some employees. By providing employees with clarity in terms of plan, purpose, and responsibility, you can help them understand that reskilling is crucial for sustaining long-term business success. They must be made aware of the support they will receive throughout the process. Linking reskilling achievements with quarterly targets or promotions will encourage employees to overcome inertia and concern.

4. Help employees explore cross-training possibilities

Cross-training is an excellent way to train employees to perform other job functions that do not fall within their regular duties and responsibilities. For example, job rotation or specific assignments can help employees expand their learning horizon, increase their awareness of company operations and allow them to explore skills and interests in new areas. What organizations need to do in this regard is considerately identify mentors and prepare a learning module with progress tracking to understand employees’ concerns early on and their level of engagement.

5. Track the success metrics

Reskilling is an intricate process governed by multiple factors, ranging from motivators to training quality to training investment. By setting clear objectives and analyzing success metrics, organizations can identify which training approaches work wonders and which are least effective. The goals should be measurable, achievable, focused, relevant, and time-critical.


Reskilling: response to changing skills landscape


There is not only a change in jobs but also in the nature of work. So, even years’ worth of expertise might seem trivial if what you have expertise in has become insignificant. A study by Gartner revealed that the need for continual reskilling and digital agility would exceed a person’s experience and tenure of service. The substantial change accelerated by digital transformation will automate and eliminate redundant jobs. How long do you think it will take before a position becomes irrelevant? A decade or even five years, to say the least!

Whatever the finality of the outcome may be, it is essential to understand, adapt and respond to inevitable changes. So, if reskilling and upskilling were useful before COVID-19, they have become a pressing priority now. Probably that is why Unilever, a British global consumer goods company, has shared their vision of preparing all employees for future-fit skill set by 2025.


Upskilling VS. Reskilling

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

It refers to teaching advanced skills to employees to maximize their efficiency in their current jobs.It refers to the process of imparting new skills required for an entirely new role.
It focuses on imparting learning in improving knowledge and performance in a current role so employees can adapt to evolving market conditions.It does not focus on refining existing skills but on equipping employees with new skills so they can transition to a different role within the organization or another company.
It aims to increase employees' value by skilling them to be future-ready.It aims to reskill those with an aptitude for such a transition.
It does not necessitate changing the career path of upskilled employees.It mandates the learning of new skills for a new career path.
It enables employees to improve their performance with their current job responsibilities in their current role.It enables employees to adjust to significant changes in their new roles.


Benefits of upskilling vs. reskilling


The benefits of reskilling employees


Companies that strategically undertake the reskilling process can expect a myriad of benefits, as mentioned below.

Reduces turnover rate: Reskilling has a positive bearing on employees’ performance, establishing a solid bond between the company and the workforce. But, most importantly, it helps reduce employee turnover, which positively impacts the company’s bottom lines and workplace culture.

Helps avoid downsizing: The ever-changing business landscape and obsolescence of specific roles may lead to undesirable consequences, such as layoffs. Top it up with factors such as the cost of rehiring and severance expenses exacerbating the problem. However, organizations that put a premium on reskilling initiatives can circumvent these issues.

Develops a positive workplace perception:Undeniably, employees want to associate themselves with companies that demonstrate their commitment to employees’ growth and safeguard their interests, thus helping them gain new skills to stay competitive.


The benefits of upskilling employees


Now, let us discuss some of the considerable benefits of upskilling employees.

Improves employee engagement: Employees with limited growth opportunities are more prone to leave their organizations. That is why upskilling provides employees ample opportunities to learn new skills and grow professionally, which helps improve employee engagement.

Saves cost: The cost of replacing and hiring a new employee can drain the organization’s resources, and that is where upskilling comes in handy.

Provides growth avenues: A company that offers equal growth opportunities for employees is desired by just about everyone. A growth-centric environment that supports upskilling can foster employee satisfaction and boost productivity in the workplace.


Best practices for upskilling and reskilling employees


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1. Optimize your learning programs

You’ve probably had adequate learning assets/ programs as an HR manager or leader. Start reviewing them to ensure they meet your existing and future skills requirements. What more can you integrate into your programs to deliver an enriched learning experience? Are your programs available in variegated forms, such as online, self-training, peer-to-peer, microlearning, etc.? Are the learning programs aligned with the employee’s needs?

2. Work together with the TA (talent acquisition) team

The success of any upskilling and reskilling strategy is also determined by how well the HR teams are aligned with the TA department. Analyze which candidates they are looking for and which skills are critical for new hires. You can garner vital insights and leverage them to refine your learning and development (L&D) programs.

3. Leverage automation software solutions

The modern human resource and L& D processes are becoming much more streamlined with technology. These tools can help employers collect, store, and analyze valuable data to identify skills gaps and create a targeted plan for the right set of people. The HR tech landscape is brimming with advanced software solutions to help organizations analyze skills gaps, conduct training needs assessments, and upskill and reskill their workforce. For instance, an advanced software solution can perform holistic evaluations, understand your organization’s skilling needs, build reskilling plans to create a future-proof workforce.

4. Keep a feedback channel open

Employees undertaking an upskilling or reskilling program must be kept abreast of the latest developments with regular feedback on their progress. These standard feedback loops will help you find top performers and improvement opportunities in your training and development programs early on.


5. Introduce skill assessments in the process

Skill assessments help in identifying employees closest to the desired skills set. They enable organizations to understand skills gaps in their workforce. With these assessments, you can assess the level of learning through upskilling/reskilling programs.


How Mercer| Mettl can help you devise an up-to-date upskilling and reskilling strategy

The world is changing at an unprecedented pace. Newer technologies are replacing older ones, and the accelerated pace of change prompts organizations to reassess their skilling strategies. As a result, organizations must ardently and continually impart relevant skills to their teams. Now, this process of building a future-ready workforce starts by understanding the current skills landscape of an organization. That is where Mercer|Mettl comes into the picture.


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  • We empower you to execute an end-to-end upskilling and reskilling strategy in three simple steps -a) identifying what to train on, b) who to train, and c) measuring training effectiveness. We undertake a skills gap analysis exercise to understand the training requirements where we identify the current skills gaps and the skills required through structured assessments.
  • Mercer|Mettl enables this exercise through its robust and technologically advanced tools, comprising a sophisticated suite of assessment tools, advanced coding simulators, virtual assessment and development centers, and the 360-degree feedback tool.
  • Our holistic assessment tools accurately and scientifically measure domain skills, coding skills, personality traits, cognitive ability and communication skills.
  • Our advanced coding simulators help you assess the real-world programming skills of your candidates for all significant technical roles, including front end, back end, full-stack data science, and more.
  • Mercer| Mettl’s virtual assessment centers are digital solutions that help you identify the development needs of your workforce. These location-agnostic tools help you conduct professional exercises to assess an employee’s skills and fitment, including case study simulators, role plays, etc.
  • The 360-degree feedback tool helps you gather 360-degree feedback to uncover an employee’s gaps in skills and behavioral traits as observed by other stakeholders.
  • We also deploy learning agility and skills proximity assessments to figure out who to train. The learning agility test gauges the agility levels of an employee (in simple terms, the ability to learn new skills quickly). The proximity assessment uncovers how close employees are to the required skill sets and how much they need to know. A combination of agility and proximity assessments ascertains which employees can be trained on what skills and levels.
  • Finally, we measure whether the training program has reached its intended goal using pre-and post-training assessments. These tools can be combined or customized as per the requirements of job role, level and scale.
  • After running skills assessment programs, we provide detailed, insightful reports and automated certificates to employees. This opens a whole world of possibilities.
  • You can conduct upskilling and reskilling programs and undertake large-scale strategic initiatives such as digital transformation, employee skilling, future work targeting, among others.
  • That’s not all! Our digital tools ensure that you get everything online and quickly. Also, you can administer the assessments remotely at scale, secured by Mercer| Mettl’s powerful A.I.-powered remote proctoring technology.

So, for what are you waiting? Start your transformation journey now with your trusted talent assessment partner!

Originally published April 15 2022, Updated April 15 2022

Abhilash Malguri

Written by

Abhilash works with the Content Marketing team of Mercer|Mettl. He has been contributing his bit to the world of online business for some years now. Abhilash is experienced in content marketing, along with SEO. He’s fond of writing useful posts, helping people, traveling, and savoring delicacies.

Upskilling and Reskilling

Importance of upskilling and reskilling

Whether you want to upskill or reskill employees, it is a go-to strategy for ensuring your people are prepared for the future.

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