There’s a poignant moment in the Netflix series, 3 Body Problem, where an alien character marvels at how quickly technology has advanced on Earth: “
Human beings have existed for over 100,000 years. For most of that time, you weren’t so different from apes. It took you 90,000 years to get from hunter-gatherer to farmer. After that, how long did it take you to become industrialists? About 10,000 years. Atomic power? Two hundred years. Computers? The information age? Fifty years.
” The show may be science fiction, but the acceleration of technological innovations that it references is absolutely real. Technology is advancing faster than ever today—and so are the skills that employees need to keep up with these innovations. From cloud computing, to mobile development, to AI, companies today need technical talent with skill sets that didn’t exist even a decade ago. Take AI engineers, for example. Companies have significant AI skills gaps on their teams, but they can’t source enough new talent to fill these roles. To address this, a recent McKinsey report finds, companies are upskilling their existing engineers. An author of the report explains, “When it comes to sourcing AI talent, the most popular strategy among all respondents is reskilling existing employees. Nearly half of the companies we surveyed are doing so.” Upskilling and reskilling are key strategies companies can use to fill technical skills gaps on their teams, and they’re more important today than ever. This article will dive into what technical upskilling is, when to use it, best practices for upskilling, and how to measure the success of your program. Jump to a section:
What is tech upskilling?
Tech upskilling is the process of continuously building employees’ technical skills to address current and future skill gaps and business needs. In an era where technological advancements are rapidly transforming industries, companies must invest in upskilling to keep employees’ knowledge and skills up to date with the latest innovations. Tech upskilling both boosts an organization’s competitive edge and fosters a culture of learning and innovation.
Why is there a need for upskilling your technical talent today?
The need to upskill your technical talent today is driven by rapid technological advancements that are reshaping industries through digital transformation. As technologies such as AI and automation become integral to business operations, companies must adapt quickly to harness their full potential and maintain a competitive advantage. Recent statistics underscore this urgency: 42% of companies increased their upskilling efforts after the onset of the COVID-19 pandemic, where in-person workplaces became remote-only overnight and business needs changed suddenly. Upskilling equips employees with the tools and skills they need to best contribute to their teams; it also serves as an effective employee retention strategy. By investing in their professional growth, organizations boost engagement and motivation among their employees, reducing turnover and building a more skilled and satisfied workforce.
Should every company have a tech upskilling plan?
Companies of many sizes and industries who employ technical talent (software developers, engineers, data scientists, etc.) should consider implementing a tech upskilling plan as part of their strategic workforce planning. This commitment to enhancing skills in industry-specific technologies both future-proofs businesses against rapid changes in the market and increases workforce agility. A well-crafted upskilling initiative fosters innovation and growth by preparing employees to tackle existing and emerging challenges.
Upskilling vs. reskilling: What is the best option?
Upskilling and reskilling are two strategies for workforce development, but they serve slightly different purposes. Upskilling refers to the process of improving the existing skills of employees to enhance their performance and enable them to handle more complex tasks within their current roles. On the other hand, reskilling involves training employees to acquire entirely new skill sets, preparing them for different roles within the company as their current positions evolve or become obsolete. The key difference lies in the focus: upskilling is about enhancement and addition, while reskilling is about redirection and role changes. When deciding whether to invest in upskilling, reskilling, or both, companies should conduct an organizational needs assessment to understand the specific demands of their industry and the future trajectory of their business. This assessment should consider the career development paths available within the organization and how employee role evolution might impact these paths. A cost-benefit analysis can help determine the financial viability and potential return on investment for each training option.
How to choose between upskilling employees vs. hiring externally
When you’re choosing between upskilling employees and hiring externally, you should weigh several factors, including recruitment costs, time-to-productivity, and the fit with organizational culture. Upskilling your internal talent pool is often beneficial as it promotes knowledge retention and leverages the existing understanding employees have of the company’s processes and values. This approach can be more cost-effective than external hiring, which involves higher recruitment expenses and typically a longer ramp-up time to full productivity. However, there are situations where external hiring is necessary, especially when the required expertise is not available within the current workforce or when fresh perspectives are needed to innovate and drive growth.
Benefits of upskilling employees
If you decide to invest in upskilling employees, instead of or in addition to hiring externally, upskilling offers numerous benefits to your teams and your organization. Here are a few of them:
- “Companies that excel at internal mobility retain employees for an average of 5.4 years. That’s nearly twice as long as companies that struggle with it, where the average retention span is just 2.9 years.”
- Increase productivity: A recent McKinsey study found that 91% of companies and 81% of employees said that upskilling and reskilling training boosted productivity at work.
- Ensure alignment with industry standards: Continuous upskilling ensures that employees’ skills stay relevant and compliant with evolving industry benchmarks, keeping the company at the forefront of quality and regulatory standards.
- Attract new talent: A commitment to employee development is a significant draw for prospective hires who value professional growth and learning opportunities, making the company more attractive to top talent in the field.
- Reduce turnover rates: When companies invest in their employees, it fosters loyalty and job satisfaction, leading to increased employee retention and lower recruitment costs over time. One study found that 45% of employees said they are more likely to stay in their role if they receive more training.
- Enhance innovation capacity: Upskilling helps employees adapt to new technologies and methodologies, equipping them to drive innovation and maintain the company’s competitive edge in the marketplace.
Challenges with upskilling
While upskilling offers many benefits, it can also present challenges that organizations need to address to maximize the impact of their training programs. Challenges may include:
- Resource allocation: Upskilling requires significant investment in terms of time and money. Organizations must strategically allocate these resources to avoid straining their budgets and overburdening employees with work and training commitments.
- Training effectiveness: Not all training programs achieve their intended outcomes. Companies face the challenge of designing and implementing effective training that genuinely enhances skills and contributes to business goals (how to do this will be addressed in the sections below).
- Employee resistance: Some employees may be resistant to change, especially if they feel comfortable in their current roles or uncertain about new technologies. Overcoming this resistance involves clear communication, demonstrating the benefits, and possibly incentivizing participation.
- Scaling training programs: As a company grows, scaling up training programs to accommodate more employees or new roles can be challenging. This requires adaptable training models and possibly leveraging technology like online learning platforms to ensure consistent and efficient training delivery.
When should you consider hiring new staff?
When considering whether to hire new staff, you should weigh several factors. A skills shortage within your existing workforce that cannot be quickly remedied through upskilling is a primary reason to look externally. Business expansion needs may also compel your organization to bring on new talent with specific skills not present in the current team. You should also compare the cost of training existing employees versus hiring skilled new personnel, especially when time constraints demand immediate expertise that training cannot provide quickly enough. In these cases, hiring new staff can be the most efficient and effective strategy to meet immediate business needs.
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