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

With a dynamic job landscape and accelerated pace of innovation and automation, organizations understand the significance of upskilling and reskilling to meet the critical needs of the workforce. As a result, employers are eager to find candidates with the agility and resilience to thrive in this workplace environment.

According to the World Economic Forum’s Future of Jobs Report 2025, the skills gap remains the biggest hurdle in 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 try to close these widening gaps and sync their workforce with evolving 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.

As industries transform at an unprecedented speed, the skills that drive business success can quickly become outdated. Organizations that continuously develop their workforce’s capabilities are better positioned to adapt, innovate, and outperform competitors. Upskilling ensures employees can meet evolving demands with agility, equipping them with advanced expertise in areas that matter most to organizational strategy.

Investing in upskilling strengthens internal talent pipelines, reducing reliance on external hiring and enabling faster responses to emerging challenges. Employees who gain new capabilities, whether in emerging technologies, leadership, or specialized functions, can tackle complex initiatives, improve processes, and deliver measurable business impact. This fuels both productivity and innovation, accelerating growth.

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

The pace of technological advancement and shifting business models has created a reality where some roles are evolving beyond recognition, while others are disappearing entirely. In this environment, reskilling is no longer a reactive measure. It is a necessity. It enables organizations to redeploy talent into emerging roles, bridging capability gaps without relying solely on external recruitment.

Reskilling primarily focuses on equipping employees with new skill sets, allowing them to transition into functions that are in higher demand. For example, manufacturing workers may be trained in digital operations, or customer service teams may gain data analytics expertise to enhance customer experience strategies. This not only safeguards jobs but also preserves valuable institutional knowledge within the organization.

From a business perspective, reskilling supports agility, cost efficiency, and long-term competitiveness. It ensures that workforce capabilities evolve in lockstep with market trends, regulatory shifts, and technological innovation. In an era where adaptability is a defining business advantage, reskilling is the bridge between present realities and future readiness.

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

While both upskilling and reskilling strengthen workforce capabilities, they serve different strategic purposes and deliver distinct benefits to organizations.

The benefits of upskilling employees are:

• Improving employee engagement: Employees with limited growth opportunities are more prone to leave their organizations. That is why upskilling provides employees with opportunities to attain new skills and grow professionally, which helps improve employee engagement.
• Saving costs: The cost of replacing and hiring a new employee can drain an organization’s resources, and that is where upskilling can significantly help the organization save costs.
• Providing growth avenues: A company that offers equal growth opportunities for employees is highly desirable. A growth-centric environment that supports upskilling can promote employee satisfaction and enhance productivity in the workplace.

The benefits of reskilling employees are:

• Reducing turnover rate: Reskilling has a positive impact on employees’ performance, establishing a bond between the company and the workforce. It also helps reduce employee turnover, which has a positive impact on the company’s performance.
• Helping avoid downsizing: The ever-changing business landscape and obsolescence of specific roles can lead to undesirable consequences, such as layoffs, in addition to factors like the cost of rehiring and severance expenses exacerbating the problem. However, organizations that prioritize reskilling initiatives can circumvent these issues.
• Developing a positive workplace perception: Employees want to associate themselves with companies that demonstrate a commitment to their growth and safeguard their interests, thereby helping them acquire new skills to stay competitive.

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 skill requirements. While reviewing the learning programs, the following questions should be considered:

• What more can be integrated into these programs to deliver an enriched learning experience?
• Are the programs available in various forms, such as online, self-training, peer-to-peer, and microlearning?
• 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.

Our skills gap analysis helps businesses understand their training requirements by identifying current skills gaps and the skills required through structured assessments. These holistic assessments accurately and scientifically measure domain skills, coding skills, personality traits, cognitive ability and communication skills.

Some of our 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.

Amid accelerating digital disruption and evolving talent demands, upskilling and reskilling have emerged as strategic cornerstones for sustainable growth. These initiatives ensure workforce capabilities advance with organizational objectives, enabling companies to respond quickly to market shifts, harness innovation, and maintain a competitive edge.

The most effective approaches move beyond one-size-fits-all training. They are grounded in precise skills gap analyses, shaped by future-focused business strategies, and embedded in a culture that supports continuous learning as a core performance driver. By deepening expertise through upskilling and broadening capabilities through reskilling, organizations build an adaptable, engaged talent base capable of meeting both current and future challenges.

Ultimately, the organizations that will lead tomorrow are those that treat adaptability as a measurable asset, where every employee is not only proficient in their role today, but also prepared for the opportunities yet to emerge.