Shape the future of work: the benefits of upskilling employees

The spotlight on skills just keeps getting brighter. 90% of organizations are actively experimenting with skills-based strategies and Gartner recently highlighted skills management as one of the most crucial HR technologies of the year.

Given that skills-based organizations are 49% more likely to maximize efficiency and 52% more likely to innovate, it’s easy to understand why so many leaders are prioritizing workforce capabilities. Most executives are also aware that employees will need to continue developing their expertise to keep pace with the accelerated speed of digital innovation and shifts in consumer demand.

As employees strive to hone new skills, the right upskilling approach will streamline learning processes and ensure everyone has the competencies needed to tackle tomorrow’s challenges. However, since all upskilling initiatives aren’t created equally, it’s up to HR leaders to devise an impactful skill-building strategy that unlocks all of the benefits these programs have to offer.

Why is upskilling important for employees?

Skill-building has always been important but recent events are raising the stakes. Now that we’ve entered the Fourth Industrial Revolution—a period in which advances in AI and automation are transforming the way we work—every employee will need to hone new expertise to stay relevant and employable.

The World Economic Forum predicts that half of all employees will need to build new skills by 2025 and that AI will create as many as 69 million new jobs. Upskilling, in particular, will be crucial for employees who are interested in staying within their domain or department so they can learn how to incorporate new digital innovations into their daily workflows.

Upskilling is also a proven strategy for boosting employee engagement and retention. When workers feel excited about the development opportunities their employer offers, they’re more likely to choose to continue to grow with their organization. LinkedIn data supports this sentiment, revealing that employees who have moved internally have a 64% chance of remaining with their organization after three years, versus just a 45% chance for workers who haven’t had the opportunity to take on a new role within their company.

6 benefits of upskilling your employees

When executives devise a skill-building program that prioritizes employee-led career development and experiential learning, they can expect to enjoy the following advantages:

#1. Reduce recruitment costs

If employees are encouraged to participate in upskilling designed to help them build the capabilities needed to advance in their organization, businesses will no longer need to rely solely on external hiring to overcome skills shortages. Instead of acquiring new talent every time a vacancy or knowledge gap emerges, upskilling helps ensure employees have the expertise needed to take on more responsibilities—in turn minimizing the costs associated with external hiring and recruitment.

#2. Increase productivity

Skill gaps often lead to lags in productivity. Employees will need to ask for help or clarify with a coworker and managers may find themselves playing more of an editing or troubleshooting role than they’re accustomed to. Rather than letting these skill shortages hinder output levels, upskilling encourages employees to develop in-demand expertise within their domain, which they can then harness to pitch in on projects across their organization.

#3. Encourage continuous innovation

The more skills employees have within their domains, the more contextual knowledge they will be able to harness when brainstorming solutions or new directions for their team to explore. Workers who regularly update their skills and expand their areas of expertise can then use this knowledge to improve internal processes and streamline workflows.

#4. Support diversity and inclusion

When upskilling is equally accessible to everyone, many of the barriers that have traditionally held employees from underrepresented groups back are removed from the equation. Rather than letting backgrounds or word-of-mouth dictate who gets considered for career advancement opportunities, upskilling empowers all employees to build the capabilities needed to qualify for these projects and roles.

#5. Upgrade succession planning

Upskilling plays a key role in succession planning. If employees only have limited skill sets and lack access to development experiences, it restricts the breadth of leadership opportunities that they can pursue in the future. In contrast, organizations that prioritize upskilling can ensure their workforce has various technical and soft skills that will enable more employees to step into leadership roles.

#6. Future-proof your business

Most leaders know that agility is the answer to preparing for future challenges. Businesses that prioritize upskilling equip their workforces with a wealth of capabilities that managers can then tap to get critical projects across the finish line. Once employees start deepening and expanding their expertise across many areas of the business, reallocating talent becomes a seamless process.

What are the challenges of employee upskilling?

As leaders prepare to launch or upgrade their upskilling plans, there are a few challenges they must keep on their radars, including the importance of developing foundational knowledge about where skills lie. While human capital management systems (HCMs) provide a sliver of this information, they rarely reflect the expertise employees build over time and the skills they have that fall outside of their domains. Skills intelligence tools like Gloat’s Skills Foundation give leaders a 360-degree view of their people’s capabilities so they can tap into all of the knowledge their workforce has to offer.

In addition to understanding what skills their workforce currently has, many executives may be unsure about the competencies they should prioritize in the future. Rather than guessing what knowledge will become more important in the coming years, leading organizations use skills intelligence tools to ensure their learning and development processes are future-fit. Offerings like Skills Foundation even include job and skill benchmarking so leaders can see what competencies are on the rise and uncover key insights about how the competition is positioning their jobs.

3 tips to improve employee upskilling strategies

To take upskilling strategies to the next level, executives should consider the following best practices:

#1. Let experiential learning lead the way

While compelling learning and development content is a strong starting point, upskilling initiatives must also include opportunities for your employees to practice the lessons they’re learning. Integrating related projects, gigs, and shadowing opportunities will give your people the experience they need to become true experts, rather than novices, in what they’re learning about. Companies that want to get upskilling right are increasingly harnessing talent marketplaces, which work to match talent to relevant experiential learning opportunities based on their career goals and interests.

#2. Put employees at the helm of their career development

The best upskilling programs don’t tell employees how to grow their careers—they let people take the lead. Although upskilling is about developing new capabilities within the same function or domain, there are still many different directions that skill-building can take.

To maximize employee engagement and performance, skills programs must be rooted in workers’ goals. That’s why career pathing tools within a talent marketplace are so important—they showcase all the options employees have in front of them so they can identify the opportunities that best align with their ambitions and the needs of their organization.

#3. Streamline access to development resources

Since the average organization has more than 70 different employee applications, figuring out which tools to harness is rarely a straightforward process. As a result, some employees may struggle to tap into skill-building resources because there’s too much uncertainty and too many bottlenecks.

Rather than letting your upskilling initiatives suffer from low engagement rates, why not create a single destination for employee growth and development? Leading organizations harness an opportunity hub to provide employees with access to coaching, mentoring, volunteering, well-being, and learning experiences, all delivered through their talent marketplace.

If you’re interested in seeing what a successful upskilling initiative looks like in action, check out HSBC’s case study to uncover how the leading global bank empowered its workforce to grow its capabilities.