Why Employee Upskilling is Important to Your Business
Upskilling has become especially popular since the COVID-19 pandemic hit. Some businesses required their employees to acquire new skills to address the gaps left by older workers who had left the workforce, including baby boomers opting for early retirement. Other businesses required workers to acquire new skills as the COVID-19 pandemic altered their operations. For example, a bedding company in Minneapolis decided to focus its work on making new surgical masks for healthcare workers instead of making bedding. They upskilled their employees on how to make masks, retooled the machines, and reset the computers. It enabled them to remain operational while meeting a pressing need in the current environment and training their employees in a new skill that will benefit the company's future.
At Aerotek, we understand upskilling your employees is important for your business. Our Delivery Solutions Executive, Chris Rogers, helps companies design upskilling solutions specifically for their business. We spoke with him about why employers should take a proactive approach to offering their workers opportunities to add new skills.
How Workforce Upskilling Reduces Employee Turnover
When you fail to invest in your employees' future learning or they perceive no opportunities for advancement within your business, they will likely quit. According to LinkedIn, 94% of employees will stay with a company longer if it invests in helping them learn and develop new skills. People do not want to be in a "dead-end job," and upskilling can prevent that.
“Often with upskilling, workers are progressing their careers, which can lead to higher wages. Higher pay is important, but it’s not always solely about compensation. You create a more rewarding environment when you show your workers that you believe in them and are willing to allow them to improve themselves,” says Rogers.
Replacing an employee can cost as much as 60 percent, with overall costs ranging from 90 to 200 percent for highly skilled talent. If you’re in a highly skilled industry, this is much more expensive than investing in upskilling. This may seem high, but there are a few factors here that go beyond just hiring and training:
● Cost of recruiting, including advertising and interviewing
● Onboarding costs
● Loss of productivity while searching for a replacement
● Potential customer service errors made during employee training
● Costs to train the new employee
Why Upskilling Boosts Employee Morale and Engagement
Employee morale is an important part of running a business. If your employees are unhappy, they will not work as hard for you as someone happy to be there. By offering upskilling for your employees, they can advance and grow in their careers. This gets them excited about their future with your company and gives them something to work for that will improve their lives.
“People feel good about being recognized or invested in. When someone is approached with an upskilling opportunity, they feel like they are part of the company’s long-term plans,” says Rogers.
Upskilling your employees can also increase their confidence, which feeds into improving morale. You will have employees who are more comfortable sharing ideas for how to improve your business and products. Another benefit to having higher morale is that when you hire a new employee, they will see how happy your current employees are in their positions and be more optimistic about their opportunities in your business. Having a good company culture like this is healthy for any business in any industry.
Having happy employees will give you happy customers. Your employees are doing better work and are more productive, which means your customers get better quality work and products from you. Plus, if you have a physical location that receives customers, they can tell if someone is happy at the job and seeing a positive work environment will make them more interested in returning. Customers are also willing to pay more when they are working with a knowledgeable team. This will increase word-of-mouth advertising from your customers, generating more business for you.
Upskilling Improves Productivity
In terms of upskilling, productivity is tied both to morale and to reducing your turnover rate. If you offer upskilling, your team can apply more skills to their work — both new and old — and can increase productivity. Upskilling may make it easier for your employees to spot inefficiencies. Research has shown that eight out of ten employees who are given upskilling training are more productive.
Another benefit of upskilling is that it can lead to improved teamwork. Upskilling will expand the skill sets available when you put together a team, and a more versatile workforce will create more cohesive teams. Teamwork is a crucial aspect of innovation for businesses, and increasing it can contribute to their success and company culture. It will also help decrease any conflicts within your workforce as your employees learn more about how to work together efficiently.
The Role of Upskilling in Adapting to Change
Whether it is someone quitting, being promoted, or new machinery being added, workplaces are constantly changing. If you regularly invest in upskilling opportunities, it will be easier for both you and your employees to handle sudden changes. Soft skills like adaptability are valuable for upskilling, as they enable your employees to handle transitions effectively. These types of soft skills are often overlooked, yet they offer the best ROI.
“Ideally, companies want to be able to fill skills gaps before they appear and negatively impact the business, and that’s a good outcome for an upskilling program. Companies that routinely invest in their workers and give them more experience won’t be as impacted if/when employees leave or if new technology is introduced,” says Rogers.
Not every company is currently able to begin upskilling its workforce. Still, most companies can begin thinking about how similar programs can have long-term benefits for the business and their employees.
Interested in learning more about how your company can improve or start its own upskilling program? Contact us for more details.
Frequently Asked Questions About Workforce Upskilling
What is workforce upskilling?
Workforce upskilling is the process of providing employees with additional training and development opportunities to expand their skills. This helps workers adapt to new technologies, take on more responsibilities, and grow within their careers.
Why is upskilling important for businesses?
Upskilling helps companies close skills gaps, reduce turnover, and improve productivity. It’s a proactive way to prepare employees for future challenges while building a more engaged and adaptable workforce.
How does upskilling benefit employees?
Employees gain new skills that make them more valuable in their current roles and more competitive in the job market. Upskilling also boosts confidence, career satisfaction, and morale.
What’s the difference between upskilling and reskilling?
Upskilling teaches employees new skills to advance in their current role or career path. Reskilling prepares workers to move into a different role or function, often when a business shifts its operations or adopts new technology.
How can companies start an upskilling program?
Businesses can start by assessing current skill gaps, identifying future needs, and partnering with training providers. Many companies work with staffing and workforce solutions partners, like Aerotek, to design and implement tailored upskilling programs.