Upskilling vs. reskilling: Both are buzzwords as businesses work hard to solve for current and future skill gaps within their organizations.
With McKinsey reporting that 87% of executives are experiencing skill gaps in the workforce or expecting to experience them within a few years, it’s no wonder these programs are top of mind.
HR leaders are also leveraging upskilling and reskilling programs to attract talent amid massive worker shortages: according to a recent Gallup report, 65% of workers believe employer-provided upskilling is very important when evaluating a potential new job, and 48% of workers would switch to a new job if offered skills training opportunities.
So while it's clear that employee education, skilling and career mobility are a top business priority, the strategic differences between upskilling and reskilling are not always clear.
We’re going to highlight the differences by:
- Defining the difference between upskilling vs. reskilling (with real-world examples)
- Explain the top strategic benefits of upskilling and reskilling for your talent strategy
- Point you in the right strategic direction for your organization
Upskilling vs reskilling: Defined
So what is the difference between upskilling and reskilling? Here’s a quick overview.
Upskilling is the process of learning new skills to become better at your current role.
Reskilling is the process of learning new skills to transition into a new role.
Both are indispensable talent development tools that help employers fill skills gaps, improve employee retention, and provide internal mobility.
A real-world example of upskilling
Upskilling might involve an inbound call center representative who is looking to move up in their current role. They choose to pursue a BS in Business Administration, and during their coursework, may receive a promotion to a consumer service call center role.
Upon completion, they decide they want to step into management, and take an additional certificate on Leading a Culture of Service Excellence. This employee may then move into a call center lead role, well equipped with years of knowledge about the service and newfound leadership skills.
A real-world example of reskilling
Reskilling might involve an hourly fulfillment center associate that is looking to grow with their company into a higher paying role.
This employee might see that their employer is actively hiring for data analysts and commercial truck drivers. They might then consider completing a bootcamp to become an entry-level data analyst. Upon completion, the employee will apply for and transfer to a new role, effectively changing career paths.
Whether employees choose the upskilling route to remain in their current career path or the reskilling route to transition to a new one, the ultimate goal (and most attractive benefit) of skills training is career mobility.
As experienced education, skilling, and career mobility partners to the Fortune 1000, Guild advises a complementarian view of both skilling programs in order to create a well-rounded talent strategy. Let’s take a closer look at the strategic use cases for both.
Top strategic benefits of upskilling
Upskilling is an extremely powerful tool for employers to retain employees and build unique skills within their organization that are extremely scarce in the job market at large.
1. To promote employees into open roles in their departments
Instead of looking externally to fill open roles in your organization, consider offering education opportunities to your current employees to prepare them for your growing talent gaps.
Through the process, your managers will be able to monitor your employees’ time management skills, persistence, and dedication to their program.
Some of the other key benefits of upskilling employees to more senior roles in their departments include:
- Reduced onboarding time: The internal institutional knowledge of your systems, culture, and processes
- Boosted employee engagement: Team morale and healthy competition spikes when team members watch their peers effectively getting promoted
- Increased program adoption: Word-of-mouth and success stories are powerful marketing tools to help drive program adoption and foster a culture of career mobility
Hear from Veronica L. herself about how her degree helped her move from team relations specialist to senior team relations specialist.
2. To hedge against the half-life of skills
The half-life of skills, which is a measurement of how long certain skills are still relevant in the workforce, continues to get shorter as the rate of technology increases. The average half-life for a given professional skill is now five years.
As an organization, would you want your cybersecurity professionals using technology that is 5-10 years old while the workforce (and, lamentably, hackers) have continued to advance?
Upskilling to train employees to use new and updated technologies allows your company to stay agile and up-to-date.
3. To create unique skill sets that are rare in the market
Finding specialized technical talent is hard.
For example, your company may be adding a swath of data scientists to your R&D and product development teams. However, if your product requires technical knowledge of mechanical or electrical engineering, you may have a trickier time finding talent to fill these roles.
Instead, employers can upskill data scientists from other areas of the business by having them undergo technical engineering training.
These “unicorn employees” as they are often called are extremely rare and valuable gems that can be cultivated through upskilling.
Top strategic benefits of reskilling
In order to shuffle talent into new future of work roles, reskilling is the name of the game. Let’s look at the top strategic benefits of reskilling.
1. To proactively combat the scarcity of digital and technical skills
The skyrocketing demand for digital roles — which was only exacerbated by the pandemic — has left many organizations scrambling to find skilled workers to fill new functions in data analytics, cybersecurity, web development, and data science.
In cybersecurity alone, there will be 3.5 million vacant job openings by 2025 — an astronomical number that concerns even the White House.
To combat these skilled worker shortages, innovative employers are reskilling frontline employees from functions that are becoming obsolete (i.e. warehouse workers, cashiers, and data entry to name a few) into high-impact roles that organizations need.
2. To reduce recruitment costs by building talent from within
Leading HR expert Josh Bersin frequently touches on the benefits of building vs. buying talent, particularly in technical fields.
That’s because it can cost approximately 6 times more to hire for certain external roles than to train employees internally.
The good news? 1 in 3 employees seek new employment opportunities internally before looking elsewhere.
Watch how Chipotle, Walmart, and Waste Management reskilled three frontline employees into corporate positions in HR, logistics, and pricing analytics.
3. To increase frontline talent attraction
If you’re like most American employers, your largest employee population is your frontline — which also happens to have the greatest level of turnover.
In August 2021, a record-breaking 4.3 million Americans quit their jobs in one month according to the BLS in what has become known as the “Great Resignation”.
So what is it that frontline employees are looking for?
It is clear that the turmoil of the last few years has redefined the social contract between employers and employees: the employees of today want more than equitable pay or work with a purpose – they also want pathways to career mobility.
Employers who effectively market debt-free reskilling programs with an emphasis on career mobility opportunities are able to elevate their employee value propositions and stay competitive. For example, Chipotle saw a 46% uptick in applicants when they marketed their debt-free education program to potential crew members.
Interested in learning how to build career mobility into your talent strategy? Check out our Guide to Getting Started With Career Mobility.
Bolster your talent strategy with both upskilling and reskilling
As the war for talent continues to escalate, it is clear that both upskilling and reskilling programs work together to create a holistic talent strategy, providing pathways to career advancement and elevating employer value propositions.
If you are an employer looking to improve your education offerings to both stay competitive and get strategic about workforce planning, then check out our 8 Best Practices to an Effective Education Program.