Why Organizations Should Prioritize Upskilling and Reskilling to Stay Competitive

Today’s business leaders are constantly juggling priorities to keep up with changing market demands and technological leaps — but there’s one big opportunity to be found right within their workforce that they might be missing out on. 

Investing in employees through upskilling and reskilling is not only more cost-effective and sustainable than constantly hiring new talent, but it also nurtures a culture of continuous learning and employee growth. Enter HR — your trusty sidekick in fostering an environment that encourages and supports ongoing employee development and learning opportunities. Let's explore why upskilling and reskilling should be central to your organization’s strategic planning. 

The benefits of investing in employees 

Upskilling and reskilling employees can be a game changer for any organization. When leadership prioritizes the growth of their workforce, they unlock benefits that can help them stay ahead of the competition. Focusing on upskilling and reskilling not only helps future-proof organizations but also creates a more dynamic, motivated, and loyal workforce. According to a recent UKG study, 68% of frontline workers are interested in learning new skills, and nearly three quarters (73%) say they don’t mind learning new skills on their own time.  

There are several benefits to investing in employees’ career growth and development: 

1. Increased employee retention and satisfaction 

Employees who feel valued and see a future with their organization are significantly less likely to leave. According to LinkedIn’s 2023 Workplace Learning Report, organizations that invest in employee development see 32% higher employee retention rates and a 28% increase in employee satisfaction.  

2. Better for business 

Gallup research has found that organizations with highly engaged employees outperform others by 147% in earnings per share. By investing in upskilling and reskilling, leadership can build a workforce capable of meeting future challenges, driving innovation, and ensuring long-term business success. 

3. Cost efficiency 

It’s no secret that finding and training new hires costs organizations both time and money. In fact, the cost of replacing an employee can end up being equal to 150% of their annual salary. Why not channel those funds into reskilling your current team instead? 

4. Enhanced productivity 

Investing in employee upskilling and reskilling has been proven to enhance employee productivity and deliver significant returns. A study from SHRM showed that organizations with a strong learning culture experience 52% higher productivity. 

5. Adaptability to change 

In the world of business, change is the only constant. Organizations with robust upskilling and reskilling programs can adapt more quickly to industry changes and technological advancements — after all, staying nimble is the key to staying competitive. 

Addressing the skills gap from within 

By focusing on internal talent development, organizations can address critical workforce challenges while simultaneously building trust and engagement with their employees. Prioritizing opportunities for growth and advancement not only helps to fill critical roles with skilled and capable individuals but also demonstrates a commitment to employees’ continuous development — a key factor in fostering employee loyalty and retention. 

Growing skills gap vs. talent shortages: A growing skills gap and talent shortages are pressing concerns for many industries, creating challenges in finding the right people to fill essential roles. By investing in career development programs, organizations can reduce their reliance on external hires while equipping their current workforce with the skills needed to meet evolving business demands. This approach not only fills roles faster and more efficiently but also ensures business continuity and enhances organizational resilience. 

Internal mobility: Internal mobility allows organizations to tap into their existing talent pool, leveraging the skills and potential of employees who already understand the intricacies of the work. This strategy accelerates the process of filling key roles, delivering significant benefits, including increased employee morale and strengthened loyalty. When employees see opportunities to grow within their organization, they feel valued and are more likely to invest their energy and expertise in driving success. 

Fostering a culture of growth: Creating a workplace culture that prioritizes growth and development is essential for any organization’s long-term success. When employees feel empowered to advance their careers and enhance their skills within their organization, they’re more likely to be engaged and motivated to contribute to its success. These opportunities foster a greater connection to the organization, cultivating a stronger sense of belonging and purpose across the entire workforce — and in turn, drive innovation and help the organization adapt to changes. 

Boosting employer brand and attracting top talent 

Want your organization to be the place to work? Investing in employee learning and development is critical for attracting and retaining top talent. By prioritizing upskilling and reskilling opportunities, organizations show their commitment to employee growth — boosting job satisfaction, loyalty, and their reputation as an employer of choice. After all, who wouldn’t want to work for an organization that invests in the future of its employees? 

Internal learning programs empower employees to advance their careers while reinforcing the organization’s image as a great place to work. It’s a win-win: enhanced morale for your team and a stronger employer brand for your organization. Plus, investing in employee development doesn’t just benefit the current workforce — it makes organizations a magnet for top talent who are eager to join a culture that values their growth. 

HR's role in creating a learning culture 

HR has a unique opportunity to shape a workplace culture where learning and development thrive. By taking the lead in fostering an environment that promotes growth, HR can ensure that upskilling and reskilling are integrated seamlessly into the organization, driving both employee and organizational success. 

There are several ways that HR can create a workplace where learning is part of the daily routine: 

1. Set the stage with HR leadership 

HR leaders play a pivotal role in establishing upskilling and reskilling programs. Their expertise in this area ensures that learning initiatives are aligned with organizational goals and embedded into everyday workflows. 

2. Integrate learning into daily work 

By weaving in learning as a part of daily operations, HR can help make career development a natural part of employees’ routines. This approach ensures that skills-building doesn’t feel like an added burden but instead becomes a regular part of the workday.  

3. Leverage tools and resources 

Tools like learning management systems, mentorship programs, and coaching sessions provide employees with a robust foundation for development. These resources can act as a personalized growth toolkit, equipping employees to succeed and thrive in the ways that work for them. 

4. Encourage cross-departmental training 

Promoting opportunities for employees to train across departments or physical work locations broadens their skill sets and fosters greater collaboration. This approach not only enhances individual capabilities but has the added bonus of driving innovation and teamwork. 

Common challenges in upskilling and reskilling 

Implementing reskilling and upskilling programs can come with hurdles, including finding the time and resources to make them successful. Organizations must prioritize these initiatives and dedicate the necessary support to ensure they thrive. 

You may encounter some resistance from employees. There are individuals who could view training as an added burden or feel they’re already too busy with the regular demands of their workloads to make time for it. Overcoming this mindset requires clear communication about the personal and professional benefits these opportunities provide. When employees understand how upskilling and reskilling can propel their careers forward, even a little encouragement can make a big difference. 

Equally important is defining what success looks like. Establishing clear, measurable goals allows organizations to track the impact of these programs on both employees and business outcomes. By regularly evaluating their effectiveness, leadership can refine their approach and ensure these initiatives deliver lasting value.  

Where to go from here 

Upskilling and reskilling employees isn’t just a trend — it’s a strategic necessity for businesses to stay competitive. HR has an opportunity to be the key driver of this type of workforce agility and talent retention through development programs. 

To be successful, HR leaders need to take a proactive approach to assessing existing training initiatives and exploring new opportunities for internal growth. This means regularly evaluating the effectiveness of existing programs, seeking honest feedback from employees, and staying informed about the latest trends and technologies in learning and development. By doing so, HR can identify gaps, make necessary adjustments, and introduce innovative solutions that’ll benefit both the employees and the organization. 

Encouraging a culture of continuous learning starts from the top down. HR leaders should collaborate with department heads to help them integrate learning into their teams’ daily work routines, show them how to use technology to their advantage, create mentorship programs, and promote cross-departmental training to foster a more versatile and dynamic workforce. 

Remember that investing in your employees' growth not only enhances their skills but also boosts morale, increases retention, and strengthens your brand. Your employees (and your bottom line) will thank you.