Upskilling employees has become the new workforce development strategy due to the ongoing digital transformation. Changes in training and employee development departments worldwide are driven by how much disruption technology causes when new processes such as automation and artificial intelligence (A.I.) are implemented.
The COVID-19 pandemic and resulting economic downturn have compelled businesses to pivot at an unprecedented rate. However, according to a Deloitte study, the U.S. economy was facing a skills gap before that. Unemployment was low, but many workers were stuck in low-wage and “gig” economy jobs, and automation and offshoring put a lot of jobs at risk—especially for lower-wage workers.
We are experiencing a massive reallocation of labor, and enhancing workers’ skills will be a critical part of the solution. The U.S. Department of Labor has expanded its Dislocated Worker Grant program by $100 million to provide training and temporary employment to dislocated workers. Upskilling is the key to redeveloping and retooling the workforce.
Definition of Upskilling
According to the Merriam-Webster Dictionary, the definition of upskilling is “to equip someone—typically an employee—with more advanced skills through education and training.”
While the meaning of upskilling may differ by organization, the definition of upskilling is widely accepted among H.R. and learning development leaders as the process of preparing current staff to fill new positions created by shifts in job and skill requirements. The goal and focus are basically the same–enable continuous learning by providing training and development opportunities that help employees enhance existing abilities and erase skill gaps.
These are reasons why industry experts say upskilling is the solution to workforce development.
Upskilling Minimizes the Impact of Fluctuating Labor Demands
In 2019, the unemployment rate was at a 50-year low. That changed overnight as employers adjusted to cope with the COVID-19 pandemic. In the post-pandemic era, there have been frequent and rapid shifts in job growth and skills that are in demand. This has prompted new candidates to enter the labor market and forced businesses to help existing workers adapt.
The eSkill Talent Assessment PlatformTM enables employers to accurately measure employees’ skill sets and determine whether they are a good fit for a particular job. HR and learning management professionals can refer to the user-friendly dashboard to monitor skills assessment scores, identify upskilling opportunities, and track the effectiveness of training and development.
Shared Value for Businesses and Employees
Upskilling is a win-win for employers and employees because it creates shared value for both, much like healthcare and retirement benefits.
Employees see career development opportunities as a reason to remain loyal to an organization. According to a recent LinkedIn survey, 94% of employees say they would stay with a company longer if the organization invested in their development. And a Global Talent Trends report showed that organizations that prioritize employee training experience 53% less attrition.
This is why organizations should view initiatives to upskill their employees as a strategic investment that supports business agility and growth instead of an “unnecessary expense” that can be cut if profits are down.
Upskilling Improves Your Bottom Line
Upskilling is an investment, but it saves organizations money in the long run. Employee turnover is expensive. According to a Gallup report, turnover costs U.S. businesses $1 trillion annually. The cost of losing employees is high, but the organization also loses the proprietary knowledge and experience tenured staff possesses.
Organizations that want to plug the supply-demand gap find that upskilling is a cost-effective approach because of all the shifts they need to make to meet customer demand and maintain a competitive edge.
Businesses can significantly reduce the need to recruit, hire, and train new talent by focusing upskilling efforts on entry-level and low- and mid-skilled workers whose positions are at risk of becoming obsolete or disrupted by technology.
Upskilling Your Employees Improves Productivity
Upskilling increases overall productivity and enables employees to work more efficiently. A study conducted by Capgemini Research found that “employees who are upskilled can shift their concentration to activities that contribute to business growth, which drives more output for the organization.”
Google, Wal-Mart, Verizon, McDonald’s, and Marriott International are a few of the organizations that have invested billions in upskilling programs. Employees have the opportunity to improve existing skills, pursue a college degree, and learn new skills. This enables them to take on additional job responsibilities, transition to more challenging jobs, and move into management.
Interested in Leveraging Skills Tests to Upskill Your Employees?
Workforce development models used for decades have become obsolete because they cannot track workforce skills and align relevant training opportunities efficiently. With the eSkill Talent Assessment PlatformTM, employers can easily create customized skills assessments to track and monitor workforce skillsets and proficiency levels.
Do you want to learn how the eSkill Talent Assessment PlatformTM can help upskill your employees? Contact us to request a demo.