Technology is constantly changing, and while this can create excellent opportunities for businesses, it can also create skills gaps in the workforce. When a business needs highly skilled workers who are trained in new technologies, some may try to hire new employees to fill in the gaps. However, there is a much better way for a business to deal with these skills gaps: upskilling and reskilling.

Upskilling and reskilling are both critical to supporting a future-forward workforce. But what’s the difference between the two? Upskilling is when you train your employees to further develop skills they already possess. Reskilling is training your workforce to perform duties that require new skills. Professional development has become especially popular since the COVID-19 pandemic hit, but as a L&D leader, you know that it’s vital to continue delivering training across the entire employee life cycle.

Some businesses needed their employees to learn new skills to fill gaps caused by those who left the workforce. Other businesses needed workers to learn new skills because the pandemic changed how they operated. For example, a bedding company in Minneapolis decided to focus its work on making new surgical masks for health care workers instead of making bedding. They reskilled 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.

Benefits to Continuous Development in Employee Lifecycle

Upskilling and reskilling employees is critical for your business’ success in the future of work. Employers should take a proactive approach to offering their workers lifelong learning opportunities so they can adopt new skills. Let’s take a look at some of the benefits to upskilling and reskilling your workforce on a continuous basis.

Reduce Turnover Expenses

When you don’t invest in the future learning of your employees — or they don’t feel like there are any opportunities available for advancement in your business — they will quit. According to LinkedIn Learning’s 2022 Workplace Learning Report, 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 and reskilling initiatives can prevent that.

Often with professional development, workers are progressing in their careers, which can lead to higher wages. Higher pay is important, but it’s not always solely about compensation. You can  create a more rewarding environment when you show your workers that you believe in them and are willing to give them an opportunity to improve themselves.

It can cost as much as 60% of a worker’s wages to replace an employee, with overall costs ranging anywhere from 90% to 200% to replace highly skilled talent. If you’re in a highly skilled industry, this is much more expensive than investing in professional development. 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.

Improve Morale

Employee morale is an important part of running a business. If your employees are unhappy, they are less likely to work as hard and be productive. By offering professional development for your employees, they can have the chance to advance and grow in their careers. This can help get them excited about their future within the company and give them something to work for that will improve their careers. People feel good about being recognized or invested in. When someone is approached with an upskilling or reskilling opportunity, it can make them feel like they are part of the company’s long-term plans.

Offering lifelong development opportunities can also increase employees’ confidence in their role, which feeds into their morale. For example, increased confidence can lead employees to be more comfortable sharing ideas on how to improve your business and services. Another benefit to increasing employee morale is giving your new employees a great first impression. When your new hires start they will see how happy your current employees are and can feel more optimistic about their opportunities in your business. Having a good company culture like this is healthy for any business in any industry.

And having happy employees can result in happy customers. When employee engagement is high and employees are happy in their work, they are more likely to perform better and be more productive. This means your customers can get better quality work and services 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 can make them more interested in returning. Customers are also often willing to pay more when they are working with a knowledgeable team. This can increase word-of-mouth advertising from your customers, generating more business for you.

Increase Productivity

Productivity is tied both to morale and reducing your company’s turnover rate. If you offer upskilling opportunities, 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 employees who are given upskilling training report having more satisfaction in their work and more growth opportunities.

A study conducted by MIT Sloan School of Management learned that an upskilling program that focused on employees’ soft skills delivered a 250% return on investment (ROI) within only eight months. This was largely because of the increase in productivity. And according to WeForum’s The Future of Jobs Report 2020, six out of 10 employers expect to see returns within a year.

Another benefit of professional development is it can lead to improved teamwork. Upskilling and reskilling can expand employee skill sets when you put together a team —  and a more versatile workforce can 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 can also help decrease any conflicts within your workforce as your employees learn more about how to work together efficiently.

Improved Workforce Adaptability

Whether it’s an employee quitting, being promoted or new machinery being added, workplaces are constantly changing. If you regularly invest in professional development opportunities, it can be easier for both you and your employees to handle sudden changes.

Ideally, a good outcome for an upskilling or reskilling program is for companies to fill skills gaps before they can negatively impact the business. Companies that routinely invest in their workers’ learning throughout the employee lifecycle won’t be as impacted if and when employees leave or new technology is introduced.

Not every company may be able to offer professional development opportunities throughout their employee lifecycle, but most companies should begin thinking about how upskilling and reskilling can have long-term benefits for the business and their employees.