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Why Employee Upskilling is Important to Your Business

Inside a manufacturing space, an older man wearing a blue shirt and dark pants explains how to use a CNC machine to several young workers wearing identical blue shirts.

Technology is constantly changing, and while this is something that can create some excellent opportunities for businesses, it can create some skill gaps in the workforce. When a business needs highly skilled workers who are trained in new technologies, many will try to hire new employees to fill in the gaps. However, there is a much better way for a business to deal with these skill gaps: upskilling. Upskilling is when you train your employees to develop new skill sets.

Upskilling has become especially popular since the COVID-19 pandemic hit. Some businesses needed their employees to learn new skills to fill gaps left by older workers who left the workforce, including baby boomers who chose early retirement. Other businesses needed workers to learn new skills because the COVID-19 pandemic changed how they operate. 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 allowed them to stay open while serving an important need in the current environment and teaching their employees a new skill that can be helpful for the future of the company.

At Aerotek, we believe 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.

Upskilling Employees Reduces Turnover Expense

When you don’t invest in the future learning of your employees — or they do not feel like there are any opportunities available for advancement in your business — they will quit. According to LinkedIn, 94 percent 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 give them an opportunity to improve themselves,” says Rogers.


It can cost as much as 60 percent to replace an employee with overall costs ranging anywhere from 90 to 200 percent to replace 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

Upskilling Is Good for Morale

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 who is 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 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.

A study conducted by MIT Sloan School of Management learned that in an upskilling program that focused on employees' soft skills delivered a 250 percent return on investment within only eight months. This was largely because of the increase in productivity. Since six out of ten employers expect to see returns within a year, this is a great result.

Another benefit of upskilling is 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 an important part of innovation for a business, so an increase in that can help with your business' 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.

Upskilling Makes Changes Easier to Handle

Whether it is someone quitting, being promoted or if new machinery is 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 a great thing to offer for upskilling because they will help your employees be ready to handle transitions. These types of soft skills are often overlooked, but they are the ones with 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 experiences 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 their workforce, but 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.