The Future of: The Importance of Reskilling
The Future of Jobs Report 2020 stated that in the next 5 years, 50% of all employees will need reskilling.
If you’re a learning and development professional, reskilling must be on your radar. WikiJob defines reskilling as retraining an employee for a new position. It’s traditionally a method used in rare occasions when an employee’s post is becoming redundant. However, it’s becoming more commonly used by employers in general, as it’s expected by employees, especially in a constantly-changing job landscape with skyrocketing unemployment rates. Employees want to know that they’ll benefit from transferable skills in their role, so reskilling is a huge benefit for them, as we’ll discuss more below.
Last week, our “The Future of…” article focused on the importance of upskilling. This week, our article is all about how reskilling is increasing in importance. We also list which skills you should focus on reskilling.
Reskilling Reduces Costs
When an employee’s reskilled in a certain role, their employer doesn’t have to instead hire a new person to fulfill that role. This is much more cost-effective - City & Guilds Group state that external hires are paid about 20% more than reskilled workers. Therefore, employers are looking to reskill wherever it can be an alternative to onboarding new hires. L&D leaders’ strategies are increasingly having to focus on this, to fulfil employers’ objectives.
Reskilling does have its own costs. However, it’s safe to say that most learning and development professionals will be able to afford this. 33% of Learning and Development professionals, asked in LinkedIn’s Workplace Learning Report 2021, said they expected their budget to increase (compared to just 22% in 2020). Depending on how much your individual organisation’s budget increases in 2022, reskilling can be a valuable use of this, which you can easily take advantage of (please comment below if your learning and development budget is increasing in 2022, so we have a good idea if these budget increases apply to our audience).
Therefore, we certainly see reskilling improving in importance and usage.
Reskilling Improves Retention
We’ve discussed in multiple previous articles about how essential training is for retaining employees. And this is even more prudent at a time when employees are increasingly resigning to pursue other roles.
Nearly half of employees have said they’re reconsidering the kind of work they do, due to the pandemic making them reflect on their career or purpose in life. To keep employees working for your organisation, even if they do wish to pursue other types of roles within your organisation, reskilling will be a key focus in the years to come.
We know that reskilling is effective in retaining employees. For instance, 60% of CEOs say a strong upskilling program improves their company culture (2021’s Workplace Learning Report). It does this by positively impacting loyalty, productivity, and your company’s sense of community. Sumtotal Systems pointed out that this gives workers more confidence in the organisation, because reskilling gives it a clear action plan. In turn, this results in 81% of talent professionals agreeing that internal mobility in an organisation, helped by reskilling, improves retention and productivity.
Reskilling is clearly extremely important for the current and upcoming generations of employees. Not only this, but it will make or break their decision to stay in a company. For instance, 93% of millennial and Gen Z workers state that it’s at least somewhat important that employers provide resources for continuous learning.
What Kind of Reskilling is More Important?
We stated in last week’s article that upskilling can help employees develop their digital skills. Similarly, workers without any digital competency can benefit from being completely reskilled in this.
Furthermore, thanks to digitisation, we’re now seeing new job positions that didn’t exist 10 years ago. To give colleagues more assurance in their employability, and make your company more attractive, offering digital reskilling is a huge benefit that you should be organising.
However, learning from scratch is quite difficult. It may not help unexperienced workers stack up against the current generation who are literally growing up using such technology. Technology may be moving faster than complete reskilling can compensate for.
In contrast to technical skills regarding digital technology, softer skills might actually be more important. For instance, the MIT Sloan School of Management completed a study about a 12-month workforce training program, which focused on soft skills. They found that this program delivered a 250% return on investment (ROI) within 8 months of completion. This large ROI gain was credited to increased productivity, because of the essential soft skills that the training program encouraged. These skills, required by the modern workplace, included flexibility and resilience.
Therefore, reskilling in softer skills is potentially the best way for organisations to improve ROI and succeed through their people. This is supported by the World Economic Forum. They concluded in their Future of Jobs Report 2020 that the top skills employers see as rising in prominence in the lead up to 2025 include:
• Critical Thinking
• Problem Solving
• Active Learning
• Stress Tolerance
These skills may seem like common sense skills that anyone should have, but they’re actually quite difficult to be skilled in. Research by Korn Ferry found that by 2030, more than 85 million jobs could go unfiled due to not enough skilled people being able to take them. Therefore, reskilling in such skills has to be meticulously done – resilience, for instance, is something that requires improving someone’s innate thinking style, and cannot be done in lackluster CPD exercises that don’t understand its importance.
Reskilling, particularly in soft skills, is undeniably increasing in importance. It’s expected by the employees of today. This is because it reassures them that their position at their company is not in danger as they have internal mobility – an act that 51% of Learning and Development professionals state is a greater priority than it was before COVID.
So, in terms of reskilling, where should your organisation start shifting its focus to? Sumtotal Systems recommends first creating a framework to focus your people’s skills towards your organisation’s strategic priorities. Ensure your HR and L&D departments are aligned with business objectives, and encourage them to work together to measure their efforts’ impacts on your business metrics.