Keeping up with the pace of technological advancement is a challenge for companies of all shapes and sizes. While technology creates powerful business opportunities, it also creates skills gaps, particularly in the manufacturing, healthcare and construction industries, where the demand for skilled workers is especially high.
How can employers combat this skills gap while retaining their current workforce? A company’s ability to upskill, or its capacity for training and developing its employees to expand their skillsets, creates a significant competitive advantage in our increasingly technology-driven world. In fact, according to McKinsey, “to emerge stronger from the COVID-19 crisis, companies should start reskilling their workforces now.”
Benefits of Upskilling Employees
We all know employee turnover is expensive. According to Gallup, the cost of replacing an individual employee can range from one-half to two times the employee's annual salary—and that's a conservative estimate. This means a 100-person organization that provides an average salary of $50,000 could have turnover and replacement costs of approximately $660,000 to $2.6 million per year.
Upskilling, or reskilling, is a smaller investment than hiring and training a new worker. As you reskill your employees, you create a more well-rounded, cross-trained workforce, and increase your team’s effectiveness.
But it doesn’t just boost your bottom line. It also:
1. Improves retention. No one wants to work at a company that doesn’t invest enough in its employees’ career development. Upskilling ensures employees' skillsets won’t become obsolete, and shows your people you care about their careers and their futures.
2. Boosts morale. Employees who have training and development opportunities are happier in their roles and have a brighter outlook on their future with the company. Reskilling your workforce helps them see the path to career advancement in front of them, and gets them excited about what could be next. Knowing they’re working toward something that will better their lives creates a deeper sense of purpose.
3. Increases customer satisfaction. Happy employees lead to happy customers. When workers are happier with their company and believe in what they are working toward, they do better work. Plus, upskilling keeps your workforce up to date on industry trends, allowing them to offer the best recommendations and insights to clients and prospects. Clients are willing to pay more to work with a more knowledgeable, proactive team. And when clients are happy with the work you do, they become stronger brand advocates for you.
4. Attracts new talent. According to SHRM's skills gap research, 83% of HR professionals are having recruiting difficulty and of those HR professionals, 75% say there is a shortage of skills in candidates for job openings. Of course, when business is successful, chances are you will need new talent to add to your experienced, upskilled workforce. When employees feel a sense of purpose with their company and clients are happy with their work, they become stronger brand advocates. That means they’re more likely to recommend your organization to their network of friends, past colleagues and family members. Suddenly you have a wide pool of diverse talent to choose from when it comes time to expand your team.
How to Upskill Your Workforce
Before creating an upskilling strategy, conduct a discovery phase to see what skills you will need from your employee base down the road.
Your goal is to be proactive and stay ahead of your industry’s future demands to get an edge on your competitors.
Make training and development opportunities readily available and affordable for everyone. Of course there might be employees—the ones with high productivity and great morale—you’ll want to focus on more. That’s fine. But make sure everyone has access to those opportunities. You might be surprised who takes advantage and benefits the most from your offerings.
Accommodate different learning styles. Some employees might do best in a traditional classroom setting with a teacher. And a completely different segment may might prefer walking through courses online. Others might prefer microlearning—watching 15-minute videos that cover topics in small increments. Providing something for all learning styles ensures the maximum amount of employees will want to participate.
Empower employees to choose their path. Put them in charge of their personal development plan, and help them make their own decisions around their career progression. When employees feel they have the freedom to choose what areas they develop, they take more ownership over their personal and professional development.
Reward employees for their upskilling efforts. Give them an incentive for completing training and development to reinforce its importance. Plus, positive recognition leads to a happier, more productive workforce.
Engage Employees in Upskilling
The important thing to remember is that all people are motivated in different ways, by different things. Organizations that are focusing on their employee experience are seeing impressive results in terms of retention, revenue and profitability. So what does it look like, and how you can do it, too? Download our ebook to find out how to create and sustain a successful employee experience.