In its most recent Future of Jobs report, the World Economic Forum (WEF) shed light on the importance of reskilling and upskilling. The job market is changing fast. On the one hand, over the next decade, a significant share of newly created jobs will be in entirely new occupations. On the other hand, many existing jobs will either become redundant or require new skills.
Companies need people with the right skills for both the new and the old jobs. But there’s a skill gap in today’s labor market. There just aren’t enough people with the right skills to fill all the available roles. That’s why companies need to look within themselves. They need to reskill and upskill their employees if they want to adjust appropriately.
But what’s the difference between reskilling and upskilling, why are they effective strategies to address the labor market’s skill gap, and how can you implement a reskilling and upskilling strategy? That’s what we will answer in this blog post.
The Definitions of Reskilling and Upskilling
Reskilling and upskilling are sometimes used interchangeably, but there’s an important difference between both terms. Reskilling means teaching your employees the skills for an entirely new occupation. Usually, you would teach those employees who have the aptitude for such a transition. For example, you can reskill an accountant into a web developer.
Upskilling means teaching your employees advanced skills for their current occupation. There’s no need to change the career position or path of upskilled employees. You simply teach them the skills so they become better at what they’re currently doing. For example, you can upskill a financial analyst with a course that teaches them SQL, so they can better extract data from databases.
The Benefits of Reskilling and Upskilling
Reskilling is about versatility, while upskilling is about specialization. You’ll need both in order to succeed over the next decade. The business leaders surveyed for the most recent Future of Jobs report said that around 40% of their workforce will require reskilling in the near future. Almost all business leaders expect employees to pick up new skills on the job.
It makes sense to teach skills to your workforce to fill new or existing roles, because they have a better understanding of what makes your company tick. They know who your customers are, can navigate company politics, understand lines of communication, etc. New hires don’t have such knowledge and will need time to get up to speed with it.
Additionally, the right reskilling and upskilling strategy makes your company more attractive in the eyes of both your current workforce and potential hires. There’s a career trajectory at your company. People won’t be stuck in their roles forever. They will learn and grow with you. That’s an attractive proposition for employees and new hires alike.
Reskilling and upskilling also make you a more agile company. You’ll be able to react faster to external developments, because you know how to teach your employees the right skills for the job. If you have to rely on new hires for any new development, you’ll eventually find yourself in a situation where you cannot find the people with the right skills.
How to Implement a Reskilling and Upskilling Strategy
Business leaders in a 2020 McKinsey survey said that skill building is the best way to close the skill gap currently prevalent in the labor market.
Between 71 to 90% of the leaders said that their current skill transformations have had a positive impact on:
- The ability to realize the company’s strategy;
- Their employees’ performance and satisfaction;
- Their reputation as an employer.
But implementing the right reskilling and upskilling strategy is hard. It requires a large-scale effort that requires you to assess your current skill gaps, develop a strategy, and imagine a way to scale that strategy so it works across your entire company.
This is what Skill-Up Technologies specializes in. We work with brands such as Microsoft, Oracle, IBM, and Lenovo to deliver digital-ready learning solutions that scale globally. It’s vitally important to be able to reskill and upskill your employees. Once you know how to do it, you’ll be a more flexible, valuable, and future-proof company.