Look around you. Today’s learning and development practices are not the same as that of years past.
More and more companies are looking for ways to leverage their people as a strategic differentiator, giving them an edge over the competition.
While recruiting and talent acquisition practices can help companies to some degree, the real secret to success lies with upskilling and reskilling employees to be able to meet the coming demands.
As learning professionals, you hold the key to ensuring the success of your business, so start to see yourselves as strategic partners of your company.
In a new study, Disruption Drives Reskilling and Upskilling, Lighthouse Research & Advisory found that 81% of learning professionals say that the current pace of change, automation, and disruption will drive a need for upskilling and reskilling employees.
*Note: the Disruption Drives Reskilling and Upskilling research study was developed by surveying nearly 1,000 learning professionals and learners to understand their challenges, beliefs, and other facets surrounding the need for a tighter focus on employee skills.
What’s the Difference Between Reskilling and Upskilling?
While the terms are sometimes used interchangeably, reskilling and upskilling actually have distinctly different meanings:
- Upskilling employees is the development of additional skills to help make someone more valuable in their current role. For example, a software developer learning an additional coding language.
- Reskilling employees is the development of significantly different skills to make someone suitable for a different role. For example, retraining a former cashier to work as a personal shopper instead.
These two components are critical for employers facing a skills gap, defined as the difference between the skills mix that workers currently have and the skills mix the employer needs to accomplish its goals.
Identify Your Company’s Skills Gaps
In a recent research study, Lighthouse Research & Advisory found that the number one driver of learning content demand for employers was to close skills gaps.
In the Disruption Drives Reskilling and Upskilling study, only 60% of employers in the study said they methodically track the skills of every employee, which obviously puts them at a disadvantage.
How can you know how big the skills gap is if you don’t know what skills you currently have?
Whether you currently do or don’t, perhaps this will give you some ideas on how to do it more comprehensively.
The study asked employers and learners about the most common ways the business identifies worker skills.
*Note that aggregate responses may be over 100 percent because participants could select more than one method of skills identification.
What’s interesting about this is that the rankings were the same in terms of priority, even if the overall numbers vary quite a bit.
For instance, learning professionals are heavily reliant on manager observations to identify worker skills, even though a wide variety of research says that humans are inherently biased.
Note that nearly one-fifth of workers are not sure how or even if their employer actually measures their skills. How can they be sure they’re receiving the right opportunities for development? Might this create friction because the worker doesn’t think the employer cares about their capabilities? Interesting questions worth exploring.
Rehiring vs. Closing Skills Gaps
Another key component of the research was around the cost of closing a skills gap.
Virtually every company today is struggling to hire specific key roles. How many of those companies could minimize or even solve their skills gap problems by leveraging training and development instead of trying to hire their way out of the problem?
Research from the Work Institute shows that the average cost of employee turnover is 33% of the position’s salary, which is approximately $20,000 for a job paying $60,000 a year.
However, according to this new data, 95% of learning professionals say that it takes less than $10,000 to reskill someone for another job.
Using these data points, we see the cost to hire someone else is at least twice as expensive as developing someone else internally.
If we combine this with data developed by Matthew Bidwell at the Wharton School, we see that external hires not only cost more money, but they also perform worse on average in their first two years on the job.
Between those two data points alone, it’s astonishing that any employer prioritizes hiring over training to the degree that they do.
It’s time to step up!
L&D professionals are in the ideal position to help employers solve this skills gap problem, and it’s time to step up as strategic partners of the business.
Get more insights and practical tips on reskilling and upskilling your workforce in our report!