Why Upskilling and Reskilling Are Needed More Than Ever

June 3, 2020
Author: Mara Zemicael

With recent unemployment rates at historically high levels, interest in upskilling and reskilling is on the rise. Laid-off workers want to shift into in-demand occupations and industries that will continue to grow, while employers are concerned about retaining valuable employees and preventing talent shortages.

Even with the drastic changes to the workplace caused by COVID-19, retraining workforces has been an ongoing trend, resulting from most industries’ increased use of automation and AI. The current environment has made this trend more relevant, as more office employees find their digital expertise and skills in collaboration, communication and time management crucial to the work-from-home office.

Retraining has become common as businesses respond to trends in the labor market and technology.

Organizations considering new business models may be looking at what essential skills are lacking in their current workforce or whether certain roles are still necessary. Facing decreased revenue and layoffs, many organizations may be evaluating the skills value of their employees. This is where upskilling and reskilling come in.

To Upskill or Reskill

Sometimes used interchangeably, upskilling and reskilling are different, though both are important in today’s labor market. Upskilling consists of workers improving and/or adding to their abilities for either their current role or a similar one. An example is a graphic designer who enhances his skills by learning UX, front-end coding or video editing. Though these skills are not required, having one or all makes a graphic designer more marketable and valuable to an organization. Reskilling is the opposite. Instead of learning new skills to remain in an existing role or occupation, workers transition to a different role.

Both upskilling and reskilling result from shifts to business needs or technology.

Employers who see skill gaps in specific departments, negatively affecting revenue or productivity, may choose to train employees in the skills they lack. The benefit of upskilling would be a workforce that could more efficiently meet business needs. Another positive would be providing employees professional development opportunities. Since one-third of employees state not learning new skills as a top reason for quitting per a survey by The Harris Poll, upskilling is usually a win-win situation for both employers and employees.

Related: Are You Paying Employees Enough?

Reskilling occurs as automation, AI or a lack of demand make a skill or service no longer necessary, requiring workers to be shifted to roles without enough talent supply to meet the demand. Even when employers create reskilling programs, they may decide to partner with local colleges or government-led workforce development initiatives. For example, a retailer who has shifted to using more automation and software to track inventory and customer interactions may not need as many employees to do associated manual tasks. Instead of letting them go, the retailer may choose to transition these employees to other positions created because of this technology shift.

Well-known, large organizations have begun reskilling programs to address labor shortages or skill gaps, especially in the areas of data science and technology. Amazon’s reskilling program, Upskilling 2025, trains employees to move into in-demand technical roles. AT&T has a similar program. As more low-skilled roles become replaced by automation and AI, the greater need organizations will have for a workforce with technical skills.


How to Start an Upskilling or Reskilling Program

The first step to beginning any training program is to identify skill gaps. This will require company leadership to collaborate with department leaders. With this insight, company leadership can work with Human Resources and hiring managers to determine where the greatest upskilling and hiring needs are. A talent shortage may present a reskilling opportunity, while upskilling may increase retention as long-time employees continue to grow with the organization.

In addition to having clear communication, the next step is for business leaders to apply data analytics to this decision-making process. A software tool, like LaborIQ® by ThinkWhy®, can provide analysis on the predicted growth for industries and markets that can be useful when creating a company growth plan, as well as salary answers when creating job descriptions or benchmarking an upskilled team. Businesses usually decide to upskill or reskill when a skill gap hinders business strategy and future success.

Once the missing skills are identified, company leaders must align upskilling and reskilling programs with the overall company goals. This would include budgeting for this training, deciding which employees to upskill or reskill and when, and determining how these newly skilled employees add value to the organization. Being able to show how these programs yield a return on investment makes it easier for both leadership and employees to buy in to these changes.

ThinkWhy continuously monitors and forecasts industries and MSAs to measure the impact on the labor market. Stay current with us. We are here to support organizations and provide insights during the economic downturn as well as the recovery phase.