Posted: Mon 14th Nov 2022
The skills gap is being felt acutely in organisations across the UK and beyond.
It’s the result of a complex interplay of contributing factors, exacerbated by rapid changes in the workplace that are now being termed The Fourth Industrial Revolution.
Add the recent Covid-19 pandemic, the current cost of living crisis, the ongoing war in Ukraine and the emerging implications of Brexit into the picture, and the scale of skills shortages is taking on a new urgency that we can no longer ignore.
By way of illustration, more than 80% of employers in the UK construction industry are reporting chronic skills shortages, with 2/3 worrying that there are insufficient skills to cater for the industry’s future needs and developments. And it’s not just major employers who are affected. Small and medium-sized enterprises everywhere are feeling the pinch too.
If your business is impacted and you’ve identified a skills gap in your existing workforce, there are various obvious approaches you can use to tackle the problem.
The chart below shows the strategies employers are using to reduce the skills gap, according to a recent McKinsey report. Over half of those surveyed take the route of building additional skills in their existing team. The report furthermore states that almost 70% of businesses see a direct ROI from investing in learning & development, while many see benefits beyond bottom-line growth.
Improving the skills of your current employees should be an essential part of your strategy to address a skills shortage – but should you be upskilling or reskilling your resources?
Both terms refer to learning new skills – they are two sides of the same L&D coin – but there are key differences we need to understand.
Reskilling focuses on teaching your current employees new skills. A team member may be better suited to a different role in the company but lacks a particular skill.
For employees who are looking for new roles and job opportunities within a growing company, this could be an attractive way to change their career trajectory while remaining loyal to their current employer.
From the point of view of the employer, change will be driven by the operational needs of the business. This could be something as simple as purchasing a company minibus and needing a licenced in-house driver, with learner courses widely available at approved training and test centres.
Or, reskill staff by switching to an e-commerce-based business model and redeploying in-store sales assistants as remote customer service assistants.
Whether you are broadening out into new markets or new offerings, reskilling can be a useful and highly effective way to repurpose employees within the business.
By comparison, upskilling focuses on developing your employee’s existing skill set, either by strengthening previous knowledge or by imparting additional skills.
Ensuring that team members have the right skills and abilities to perform in their roles equips them to feel more confident and grow in their current positions, and enables them to take on extra tasks and responsibilities.
The result is that employees who are able to deal effectively with the rapid speed of transformation that many businesses are experiencing add value to the business.
Digital upskilling is a case in point – see our upcoming webinar on the topic.
From the perspective of the employee, upskilling helps them to develop their potential within their chosen field, expand their marketable skillset and enhance their career progression.
Whether you decide to invest in your existing employees by way of upskilling or reskilling, the potential benefits to the business are clear:
Investing in skills training is an excellent opportunity to boost your company’s competitiveness in today’s market while preparing your business for the future.
Technology plays a key role here. Upskilling and reskilling your team as needed means developing their ability to use the latest tech solutions and software tools.
The result is that, as a business, you can leverage technology to stay not only relevant in the market but at the forefront of it.
Recent industry reports suggest that the cost saving of reskilling or upskilling versus hiring new talent could be as much as £50k per person.
By investing in your existing team and equipping them with the skills necessary to operate in today’s complex, fast-paced and increasingly hybrid work economy, you can sidestep the expensive hiring process.
Stay on top of your team’s learning needs with a continuous development culture to smooth learning curves and training costs going forward.
The other side of the coin is that by providing more opportunities for your team members to grow, their job satisfaction will be enhanced, which ultimately allows the business to retain its top talent.
Opportunities to develop and progress within the company are seen as the key driver of a great workplace culture which, in turn, has a direct link to employee retention. In fact, 93% of employees would stay loyal to their employer if it invested in their careers.
Engaged and motivated employees are good for your company’s performance. Put a different way, disengaged team members are 21% less productive than their peers and 87% more likely to leave their current employer, costing the UK economy in the region of £340 billion a year.
By focusing on upskilling and reskilling your existing employees, you send a clear sign that they are valued, supported and encouraged to shine.
Finally, reskilling and upskilling are obvious answers to address the skills gap in your business. According to recent research, nearly 80% of the largest employers (and nearly 2/3 of the smallest employers) reported a skills gap that adversely affected their business performance.
Bridging talent shortages by investing in L&D rather than hiring new is a more cost-effective and long-term solution that benefits both employer and employee, working together for a successful future.
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