Why reskilling is more important than ever

Reskilling seems to be the growing keyword of the day, especially since the pandemic began. This article will show you what exactly reskilling means, and why you should consider implementing it in your organization.

Moreover, you’ll also learn how to successfully create a reskilling program, and improve the process for your organization.


What is reskilling?

Reskilling is the process of learning new skills by employees to move onto a new role within their current company.

Reskilling might be a good alternative to firing current employees and hiring new ones with a different skill set.

It’s also a good way to move a person who fits better for another role, but for some reason ended up working in a totally different one.

There might be an account manager that excels in communicating with customers, although he seems to have an interest in the sales process. As it turns out, after a trial run, he’s a natural salesperson. Because he’s also open to the idea of changing to a sales role, reskilling him for a sales position is a better fit for the employee, as well as the company.

For another example, an employer might eliminate an on-site personal shopper role. To accommodate customer needs, they plan on moving this role to live chats that can guide customers to their ideal product.

Rather than firing their in-store personal shoppers, the company trains these employees to take their customer service skills online as live chat consultants.

In another instance, a financial company decides to scale back on personal investing jobs. However, there is still a lot of auditing and paperwork to be done in the office. Rather than firing employees that work on investment portfolios, they reskill those employees to work on auditing the backlog of documents.

These days, many jobs in manufacturing are taken over by machines. As a result, many employees may lose their jobs if the organization doesn’t choose to reskill them.

For example, a metal fabricator is going to lose their job because it’s being automated by machines. Rather than firing the metal fabricator, the company notices the employee has a talent for retaining information on company procedure and policy and decides to move him to a role in dispute management.

Why is reskilling important now?

Reskilling allows you to keep the same loyal employees in your organization, but there are more reasons than that alone that make it important.

RPA (robotics process automation), AI (artificial intelligence), and of course, the Covid-19 pandemic have changed the way we think about workers’ roles.

All of these things also make reskilling employees more important than ever before.

1. Reskilling and upskilling is a top priority for the next decade

The recent year has changed nearly everything about the way we work, including the roles we take at work, as seen by this statistic:

According to the World Economic Forum report published in October 2020, the rapid acceleration of automation and economic uncertainty caused by the pandemic will shift the division of labor between humans and machines, leading to 85 million jobs being displaced and 97 million new ones created by 2025.

Not only are machines seen as a safer alternative to in-person work, but they can also complete some tasks more efficiently, and at a much lower cost to employers. While some workers are able to transition to working at home, some workers are replaced entirely by machines.

However, as seen by the World Economic Forum, there are also going to be many new jobs created.

We anticipate that many of these jobs will come as a result of reskilling workers that were previously replaced by automated processes.

As we continue to innovate, we will need to fill new or vacated positions within the company.

These reskilled workers will take on new roles to improve business practices, reduce waste, heighten efficiency, and more.

Not only that, it will reduce company costs versus employing new hires.

2. Displacement due to automation and RPA

This study indicates that several millions (if not hundreds of millions) of workers will need to learn new skills for their job, or even switch occupations altogether.

It states: “Across the eight focus countries, more than 100 million workers, or 1 in 16, will need to find a different occupation by 2030 in our post-COVID-19 scenario…”

The economic impact of this new rising trend in automation will be staggering. Reskilling workers can help minimize this financial impact, and maintain the status quo among workers.

3. Work after COVID-19

The pandemic has seen a drastic rise in unemployment, as well as remote workers- there’s no doubt the workforce will continue to change.

However, employers also have to make choices regarding their workforce post-pandemic.

The pandemic accelerated existing trends in remote work, e-commerce, and automation, with up to 25 percent more workers than previously estimated potentially needing to switch occupations.

Reskilling allows employers to maintain their workforce, while also putting employers in more useful positions that likewise benefit the company.

After the pandemic, employees will still need work, and that work doesn’t necessarily need to be in a different industry or company.

Reskilling allows employees to change and build upon their current skill set to remain working and productive.

McKinsey & Company: How COVID-19 changed the future of work, with Susan Lund

After the pandemic, at least 50% of workers will need to gain new skills to advance their occupations, as compared to only 6% before the pandemic.

From the individual employee to the organization as a whole, all trends are pointing to retraining, reskilling, and developing more versatile skill sets overall.

As the pandemic has increased our need for automation and safe work practices, it has also greatly increased our need to rethink the way we work and train employees.

What are the benefits of reskilling?

Next, we will discuss the benefits of reskilling employees in your workforce.

Benefits of reskilling for an organization

1. Reduce training and hiring costs

Hiring and training new employees costs companies money, and it can cost even more when you’re looking for talent in specialized roles.

When training new employees, you’re not only training them in their own specific role. You’re also training them in company processes, software, and protocol.

Your current employees are already well aware of all these things and don’t need to be retrained on them, which saves you money right from the start.

Training isn’t the only part of hiring new employees that costs money: recruiting, interviewing, background checks, and much more are costly endeavors.

After all that is said and done, there’s still no guarantee that your newly hired talent will be successful at their jobs, or that they won’t quit for a different job.

Not convinced? According to SHRM reports from 2015 and 2016, it can take about 52 days to hire a new employee, and each new hire costs a company about $4,000.

Because of the pandemic, the time and money invested in new hires can be even greater.

Another area in which reskilling saves organizations time is their overall salary costs. New hires cost money, and for more skilled positions, those new hires demand even higher salaries.

In fact, a new hire for a skilled role can cost up to 20% more than workers that companies reskill to do the same tasks.

2. Retain company knowledge and improve time to market

Your current employees already know how the company works, and what their roles entail.

This is valuable information that can take months or years to obtain, and when an employee leaves, you lose that company’s knowledge and experience.

Reskilling allows you to keep these knowledgeable employees, so they can pass it on to less experienced employees. A good resource in retaining company knowledge is the knowledge management article.

This also means that the company’s time to market is significantly improved. Time to market is essentially how long it takes a company to produce a product, from the initial conception to putting the product out for sale.

Because employees with solid company knowledge can work without needing as much assistance, tasks are completed more quickly.

As an end result, you get higher quality products, faster production, and better profits.

3. Keep your top employees

Reskilling means you don’t have to simply fire otherwise excellent employees.

Talented employees aren’t always easy to find, and it’s far better to keep them in your company than have their talents go to another organization.

Reskilling top employees keep them in your organization, and simply enhances their value to your organization by giving them more skills to contribute to your company.

4. Reskilling is a great tool for internal mobility

The other good news is that reskilling won’t just help you keep your top employees- it can also help you attract the next round of dedicated employees.

These new employees will want to work for an organization that values its current employees and shows that by helping them expand their skills and roles within the company.

People are much more likely to stay in a company that shows they’re interested in expanding current employees’ roles.

Graph: Employees at companies with internal mobility stay almost 2x longer. 2,9 years vs 5,4 years.

In fact, employees are twice as likely to stay at the same company if they have a chance to expand their roles.

5. Improve employees morale

Employees feel that their company values them when they’re given chances to grow their skills and elevate their positions in the company.

When workers feel that their workplace cares about skills training, they’re about 94% more likely to stay within the company.

It’s not just about elevating their positions, however, it also lets employees know they have a measure of job security. New skills allow employees the opportunity to work in new roles should their current position be eliminated.

This makes employees feel important and raises their esteem for their jobs and the company they work for.

Of course, this creates a feeling of dedication for employees, which makes them take pride in their jobs, and create higher quality work.

6. Improve company reputation

Not only does reskilling improve the view of the company for current employees, but it also improves the company’s reputation in the eyes of friends, family, prospective employees, and society as a whole.

A massive firing of employees can give a company a bad reputation, but reskilling employees shows that the company cares about the people working for it.

As a result, society, government, and even the media looks upon the company more kindly.

7. More versatile employees

As employees expand their skill set through reskilling, they become more versatile in their roles at the workplace- they gain useful insight into other areas in the company.

These employees can become some of your best problem solvers as they know more about the different aspects of your workflow.

This also gives employees a way to elevate their positions within the company.

For example, an employee replaced by auditing software may end up working in technical support. However, because they know how the auditing process works, they may be able to solve complex issues with customer accounts that software alone would not detect. As a result, the employee is promoted to supervising auditing reports.

Benefits of reskilling for employees

1. Keep stable employment (and benefits)

Of course, the biggest benefit is maintaining a stable job with a company that cares and being able to manage the expenses of daily life.

Company benefits are the second reason employees choose to stay with an organization. However, because you need to stay with the same company for a set amount of time before you’re eligible for a 401k, insurance, or other benefits, it makes sense to stay at the same organization.

Reskilling allows employees to maintain the same benefits of their jobs, without interruption because they’ve changed employers.

2. Upward mobility (role diversity)

Knowing there’s a chance for a promotion within the company is a huge motivator for employees.

Rather than being forced to accept the same tasks and pay rate indefinitely, upward mobility within a company allows you to rise in the ranks.

With any promotion, there are certainly more responsibilities expected within that role. With that comes learning new skills- which is at the core of reskilling and upskilling.

It’s important to realize that not all skill learning is to get a promotion, although that may be a benefit in the future.

Reskilling does offer employees a better chance of staying with the company when there’s economic uncertainty. A promotion isn’t the main goal of reskilling- retaining a job within the company is. However, the more skills an employee obtains, the more eligible they are for versatile or elevated roles.

Reskilling can be seen as a jump start for employees looking to expand their skills, and gain higher positions later on.

3. Personal growth

Personal growth brings a sense of satisfaction- it’s the reason people try to conquer new skills, do DIY projects, and have hobbies.

That sense of accomplishment also extends to the workplace. Whether reskilling involves learning a vastly different role, or one with only a few differences, you’ll get a good feeling knowing that you’re improving yourself.

As employees gain new skills, they increase their value within the company. This grows their job security, although it can also create opportunities to find jobs in another company should they choose to.

4. Making lifelong learning a process

Lifelong learning is a crucial habit in everyone’s lives, whether they’re at the workplace or not.

It doesn’t have to be a complicated process- you can learn small things every day without even realizing it.

However, being a lifelong learner enhances your life in general, and it makes you more attractive to employers.

Lifelong learning is also a trait that many employers may consider when looking to promote someone within the company because it shows initiative.

How to organize a reskilling program

1. Create a list of potential positions where people can be relocated

The beginning of any successful project starts with a plan, and that’s why you need to make this list. Rather than focusing only on positions that will be eliminated, also focus on the roles that your growing company will need to fill.

Remember, you also need to consider that certain roles require specific training. You may also need to group roles for reskilling to make it more effective.

To do this, look at your company’s future. Will you expand into new markets or develop new products? Are you going to offer enhanced company support to customers? Find the areas where you will need staff to expand your company.

Then, decide which areas of growth are most important to your company.

If you’re primarily focused on developing a new product, you’ll need more people working on development and marketing. Also, rank tasks that are less important to your company’s growth.

Remember, not all of these role transitions will be immediate. You might need a department to finish their big project before transitioning the employees to a new role.

Remember that not all reskilling involves just transitioning employees from one department to another. In fact, reskilling is a great opportunity to promote employees to higher positions, while reskilling other suitable employees for the promoted person’s role.

For example:

John’s data analysis role is taken over by new software. However, many of his managers see his talent for communicating with customers and his fellow employees. He is also seen as very persuasive, and so the company trains him to take over a sales role.

Another example:

Jen and Amy are both in the file clerk role. However, Jen has been with the company longer and knows some duties outside of her own. The file clerk role will soon be minimized to include only one employee since much of the work is being replaced by a computer program. Because of Jen’s experience and knowledge, she’s promoted to office manager. Amy is reskilled to take the role of a sole file clerk, which means learning the knowledge Jen has picked up over the years.

2. Define people who can be included in the program

This is one of the more difficult parts of creating a reskilling program because you have to evaluate every employee, as well as their current roles, and the future of those positions.

You might not be able to reskill every worker, so you need to define what makes a worker suitable for new roles and grade them on their eligibility for each role.

Ask yourself these questions:

  • What are the definitions and criteria of the employees eligible to switch roles?
  • What departments are to be considered for reskilling?
  • How will you grade employees’ suitability for reskilling?
  • How do the benefits of reskilling weigh against the risks?

Decide the rubric or grading system you will use to determine who is suited for reskilling, and which roles are worth commuting.

It can be a simple system. For example, you can use a scale between 1 and 3. 1 means workers perform exceptionally, 2 means they perform at an average level, and 3 means they perform below expectation. Or, you can create a more complex evaluation system, based on a skill matrix, and then include a more versatile grading system.

3. Define areas for improvements

Employees that can take on new roles might still need some help learning or improving skills before you reskill them.

For example, an employee might be very good at sales but needs to improve how they fill out paperwork and important documents. You can coach employees to make improvements that will make them more suitable for reskilling and taking on a new role.

Using your list of possible employees for reskilling, define which area each one will need to improve to be successful in a new role.

This guide on areas for employee development can direct you where to look at and what areas you can improve. Look at the skills that your employees already have, and see what they will need to learn to be successful in a new role.

For example, a customer support specialist will be reskilled to take on customer retention roles. The CSR software works much the same for both roles, in essence, however, customer retention requires a little more in-depth knowledge of the system. Therefore customer support specialists will need more training on the advanced aspects of the software to take on their new roles.

4. Choose methods

Choosing methods for reskilling is very similar to choosing methods to train employees.

In general, methods can include workshops, where groups of employees can learn new skills together, or mentoring, where another experienced employee tutors another employee that needs to learn the skills for their new role.

If you already have a training program for new employees, you can even use the same methods to reskill employees.

Learn what employee development methods are better to use for different roles and areas in our guide.

5. Create a detailed plan for key roles and positions

An employee development plan will help you streamline the process of getting reskilled employees into their new roles.

Some general roles don’t need extensive planning, although you should briefly outline them.

Take more time when you create a plan for key roles and positions that hold more responsibility. You can choose the level of detail that best suits your organization.

6. Define needed time and resources

Reskilling, like any other type of training, takes time and resources.

While you don’t need to plan this step out to the minutiae, you do need a general idea of how long reskilling should take for each role.

  • Will you need one on one mentors for certain roles?
  • Can reskilling training be done with e-learning courses?
  • Do you have an LXP (learning experience program) or LMS (learning management system) to facilitate the process?

Decide which method of training will be most beneficial, and how much time, money, and other resources it will require.

7. Negotiate with potential candidates

Keep in mind that not every employee will jump at the chance to leave their current role, even if they realize that role will soon be eliminated.

This is a sensitive topic, as people are always uneasy about uncertainty, and the possibility of losing their jobs.

When people are already experiencing economic struggles, they may be more likely to agree to reskilling. However, it’s still important to approach this conversation diplomatically, and let the employees know why it’s important for the company, and how reskilling can benefit them.

8. Launch the program, adjust as needed

Once you have your plan in place, it’s time to get started and launch the program.

As you begin your reskilling program, keep an eye on training and progress. Don’t be afraid to make changes if certain aspects of your reskilling program aren’t working.

You may need to make adjustments for individuals, entire departments, or even parts of your plan like your timeline or how you budget resources.

Making small changes can ultimately lead to drastic improvements.

FAQs about Reskilling

What does reskilling mean?

Reskilling means learning new skills that enable employees to take on new roles within the company, especially when their current roles are going to be eliminated.

What is the difference between reskilling and upskilling?

Reskilling is when workers are retrained to take on a new role in their workplace. Upskilling is similar to reskilling, although upskilling simply involves teaching employees new skills, without the stipulation of taking on a different job role.

How to determine that employees need reskilling?

One of the main indicators that employees need reskilling is that their current roles will be eliminated. When the company wants to retain valuable employees, but cannot maintain the same roles, it’s time to reskill those employees for other roles.

It is also a good option for employees who are really talented in a specific area, or just more effective in something different than their current role. In these cases, reskilling will help them find the perfect role for them and help them to release their full potential.

How long does reskilling take?

The majority of reskilling takes around six months or less. However, the time reskilling takes also depends on the requirements of the new roles employees will assume. Only about 9% of reskilling takes longer than six months but less than a year. It’s estimated that around 10% of reskilling may take a year or longer, although that is likely for more skilled and more elevated roles within the company.