What is Reskilling? And Why Businesses Must Adapt

Reskilling, while not a new concept, is becoming more important than ever as people’s skills show their age. 

The increasing pace of technological advancement is changing industries left and right, and it’s only speeding up. Technology, like AI, is shifting work as we know it. 

In some cases, existing roles are going away completely or being greatly reduced. In other ways, the job has changed and now requires workers to change alongside it. 

While job displacement is scary to think of, reskilling presents an opportunity to individuals but also businesses and even entire industries.

For one, organizations globally need skilled workers but often can’t source enough. A collective skill gap remains. For displaced workers, or even those who are interested in a career change or to brush up on new skills, reskilling is a way to close this gap and adapt.

Reskilling is the process of learning new skills to enable a move to an entirely different role. Unlike with upskilling, which adds onto pre-existing skills, reskilling enables movement to a different area of focus or even a different field of work entirely. For example, an elementary teacher who learns coding to enter the tech industry. 

According to the University of Queensland, it’s estimated that people entering the workforce today will have 16 to 17 jobs across five to seven careers. With each career change, it may necessitate employees build new skills entirely. It’s also for this same reason that transferable skills become increasingly important as the workforce and market changes. Skills like adaptability, resilience, emotional intelligence and communication are universally beneficial. 

Though reskilling seems daunting, it is an essential move for organizations that are trying to align their business with the changing needs of the marketplace. For employees, it’s a way to broaden your skill set and remain relevant in your current career. Or, it could mean making a switch entirely.

The World Economic Forum says that 23% of global jobs will change over the next five years due to industry transformation, with over 1 billion people affected worldwide. This shift has already started, with SHRM saying that the market’s skill gaps will necessitate nearly half of workers to be retrained this decade. 

Much of this change has been ushered in by the increasing utilization of generative AI models like ChatGPT, which has replaced some of today’s jobs. What reskilling allows is for top performers to be retained by organizations and moved into new roles. 

This creates a win-win for companies and employees alike. It requires less onboarding and assures a good culture fit, while showing employees they are valued and needed. 

The benefits of reskilling current employees versus hiring new ones are numerous and far-reaching, going beyond simply addressing changing organizational needs. They include: 

• Reducing layoffs 
• Reducing turnover
• Attracting talent
• Empowering employees

Reducing Layoffs 

Layoffs aren’t just bad for employees. Hiring is an expensive, time-consuming process. Additionally, layoffs can reduce employee trust in their organizations, affecting the performance of those employees who remain. 

Reducing Turnover

Voluntary employee separations are also reduced by reskilling efforts. SHRM data suggests that only one-third of employees were satisfied with their workplace’s commitment to professional development. By actively investing in their employee’s futures, companies demonstrate that they are a place for advancement rather than stagnation. 

Recruiting New Employees

By showing you encourage ongoing professional development, prospective employees feel they are applying not for a single job but for a career that they can advance in. A lack of professional development is often cited as a top reason for employees to leave their current post as well. 

Employee Empowerment

Stagnation can lower morale and cause employees to look elsewhere. To stave off these effects, more employers are encouraging their workforce to make lateral job changes internally or pick up gigs — sometimes temporarily — to build new skills and try out different career paths. This helps them explore new opportunities without losing their talent. 

Reskilling your workforce requires a concerted effort, but it’s an achievable task for organizations when broken down into these steps:

1. Pinpoint What Skills Are Most Needed 

To identify the skills you need today and in the future, you must also understand the organization's mission. What are the strategic priorities and the vision? Knowing that can help inform a job architecture and skills framework. In doing this work, it’s important to distinguish which skills are mission-critical and those that can be immediately utilized. 

2. Identify The Employees You Would Like To Reskill

There are many factors to consider when choosing those to reskill, like relevant background knowledge, which jobs will wind down first, and which employees show an interest in reskilling. 

Recently, Lexmark’s business changed dramatically, forcing its employees to follow suit. The talent development team provided custom learning material and encouraged reskilling to retain employees and support the transition. Lexmark employees jumped at the opportunity, resulting in a 45% increase in training, which led to the company’s success. 

3. Encourage Your Employees To Adapt

Change is hard. Some employees may feel hesitant to change what they know or may struggle to pick up new skills. Communicate the value of taking training and building new skills. Work with individuals to create employee development plans that outline specific actions and resources to help guide their journey. Collect feedback and allow employees to help guide the process. 

Read Next: Individual Development Plans, Tips and Best Practices - Skillsoft

4. Offer Courses, Training And Coaching

It can often be difficult to know where to start when learning a new skill, so having a step-by-step guide can make employees feel like they are on the right path. By offering training, companies can guide their employees to learn exactly what is needed for their new role, demonstrating that they are invested in seeing their workforce thrive. 

5. Track And Analyze Results

The impact of reskilling is evident by looking at learning metrics, like these:

• Engagement
• Course completion time 
• Course scores
• Turnover rates

These metrics were very helpful for Puget Sound Energy, which recently had great success employing a virtual coaching program to help sharpen the skills of its leaders. 

While participants in the program got real-time, personalized feedback on their skills, the company was able to monitor the engagement, satisfaction, and performance of those attending. These metrics allowed them to get a detailed idea of how they were helping their workforce and how much employees were getting from the program. 

Every organization should identify ways to reskill and upskill its workforce to retain talent, while also keeping their skill base current. Reskilling is an essential strategy for keeping up with a changing world and ensuring employees remain engaged at work. 

Though reskilling can seem daunting, the best time to start is now. For the first steps, check out our blog on transferable skills that may help with your reskilling efforts. Then, read our blog on upskilling to understand the differences between the two strategies and their importance.

Read Next: What is Upskilling? - Skillsoft