Eric Friedman is the Founder and CEO of eSkill, a global leader in skills testing and behavioral assessment solutions for employers.
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A talent shortage that's been growing steadily for around 10 years is getting worse. By 2030, an estimated 85 million jobs may go unfilled worldwide due to labor shortages. Many organizations have adopted new technology and implemented digital transformation initiatives during the last decade to streamline operations and improve productivity. Their hiring needs have changed, so they've created new jobs, eliminated obsolete ones and restructured others.
But many applicants' skills haven't kept pace with these changes. This has caused a talent shortage and skills gap so acute that 71% of CEOs believe it's their biggest business challenge. These marketplace shifts show that companies need to upskill employees to remain competitive.
Why Companies Are Upskilling
Competition for top talent is fierce, and organizations’ first reaction is to invest heavily in hiring initiatives to attract skilled candidates. But external recruiting can be expensive and time-consuming, and so is turnover if new hires don't work out. Turnover costs organizations thousands of dollars annually; reports have shown employee replacement costs have the potential to be as high as 60% of an employee’s annual salary. Additionally, Association for Talent Development data shows that 75% of hiring is to replace terminated employees or those who leave voluntarily.
It's the need for top talent who will stick around that's driving many organizations to understand that their existing employees already have in-demand skills or could acquire them with the proper training. Thus, upskilling programs have become an effective way to help these diamonds in the rough develop the modern skill sets needed for their evolving roles. Here are some other benefits of these initiatives.
• Increased Productivity: Equipping personnel with new capabilities drives innovation and improves productivity. Upskilled employees can work more efficiently, contribute more value and solve problems more creatively.
• A Future-Proofed Workforce: Employees with versatile skill sets, including critical digital and cognitive skills, are better prepared to adapt as jobs change. Upskilling boosts talent mobility and ensures a company's workforce stays relevant.
• Improved Recruiting And Retention: Providing development opportunities makes companies more attractive to job seekers, boosts employee satisfaction and improves retention. This kind of investment in people demonstrates a commitment to talent and shows that career advancement is possible within the organization.
How Organizations Are Upskilling Staff
There are a lot of ways that organizations can implement upskilling programs to leverage their staff resources. For example, in 2021, Amazon committed $1.2 billion to provide access to education and skills training programs—including college tuition for frontline employees through 2025. As part of its Upskilling 2025 initiative, the company offers training programs that support employees as they gain the expertise they need to move into more highly skilled, better-paying technical and non-technical roles.
As a starting point for an upskilling initiative, here are some steps that companies can take.
• Assess Skills Gaps: Generally, critical skills gap areas include data literacy, AI and cybersecurity. That said, organizations should use surveys, interviews, skills tests and data analysis to identify priority areas for upskilling based on their objectives.
• Create Personalized Learning Paths: Develop customized training programs based on individual strengths, interests and capabilities. For example, if you know an employee needs proficiency in a particular software package, you can tailor the training approach to help them upskill successfully.
• Offer Online Training: Provide easy access to all kinds of training opportunities. This includes courses, workshops, simulations, on-the-job training, stretch assignments and other hands-on learning. Consider partnering with educational and training institutions to leverage their content, credentials and program designs.
• Cultivate A Continuous Learning Culture: To encourage employee engagement with upskilling, allow plenty of time for skills development to take hold. Link upskilling to career advancement and rewards, and use assessments and certifications to track productivity improvements and other metrics. Then, recognize employees who complete programs successfully.
Upskilling Programs Are Essential
Implementing an upskilling program is imperative for organizations to succeed in today’s dynamic hiring environment. The workforce of tomorrow will depend on the training investments of today, and if companies want to overcome the talent shortage, they must commit to developing a future-ready workforce. By maximizing current employees' potential through upskilling strategies like these, it's possible to drive innovation and productivity.
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