The World Economic Forum predicts that in 2022, upskilling and reskilling will be crucial for 54% of all workers. How do major companies react to this? Instead of opting for cost efficiency by replacing labors with more automation, they actually invest their money in creating a learning culture. Many big companies such as Amazon and PwC even go as far as investing hundreds of millions of dollars for upskilling and retraining initiatives. Some even make $1 billion investment on this.
Upskilling and Reskilling
Why do many companies dare to invest that much on training and learning? Why are upskilling and reskilling important? To answer these questions, we need to start by differentiating the two.
Simply put, upskilling is basically upgrading employee’s skill. An example of upskilling would be giving incentives to an IT team member to attend an advanced coding workshop. Upskilling like this will benefit both the company and the employee. The company gets a better human resource, and the employee can get a leverage in terms of skill and career development.
On the other hand, reskilling also means learning new skills, but these new skills mostly are not very much connected to the skills that an employee currently has. The goal of reskilling is to take up new jobs or positions which require a whole new set of skills. Reskilling doesn’t have to always be about employee rotation. It could also mean preparing employees for future challenges. An example of this would be how Scandinavian Airlines gave medical training to their staff when the pandemic first hit in 2020, allowing them to work in the healthcare sector.
Benefits of Upskilling and Reskilling
Upskilling and reskilling can bring a lot of benefits for a company, which is why a lot of major companies spend a lot of money on training programs. The first and most obvious benefit would be to prepare a company for ongoing and future challenges. Over the past few years, different kinds of industries globally have faced numerous challenges, from automation, economic crisis, to the pandemic. Upskilling and reskilling can build a company’s resilience as the staff would be more equipped with relevant skills to deal with emerging problems.
The second benefit of upskilling and reskilling would be keeping valuable people in your company while sustaining team solidarity. Instead of hiring new recruits, equipping existing staff members with skills mean that these people get to stay. If the people stay, talented members of your team can continue making contributions, and you may find hidden potentials among other team members. In terms of team solidarity, existing teamwork dynamic can be also maintained, since bringing in new people would change the team’s way of communicating.
Last but not least, upskilling and reskilling can literally save you a lot of money. Wait, isn’t this contradicting the fact mentioned earlier, where major companies could spend millions of dollars only for training? No, it doesn’t. Compared to the cost of training, turnover rate could cost companies even more. In fact, according to builtin.com, losing an employee is estimated to cost a company 150-200% of the employee’s salary. Imagine what would happen if this happened in a much more major scale. Investing in training, in the end, can be much more cost-efficient.
In the end, upskilling and reskilling may appear unnecessary, but investing in learning programs can help your company survive and navigate through different types of crisis. Upskilling and reskilling help a company be more ready for any challenges, keep top talents while potentially discovering hidden ones at the same time, and save a lot of unnecessary cost. The value of learning may be often underestimated because it doesn’t bring direct benefits, but it’s evident that upskilling and reskilling programs can literally save a company.
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