One vexing implication of the accelerating pace of change and innovation is that the skills and knowledge of a workforce decay more rapidly than ever. It’s easy to understand why. Innovations like generative AI are synonymous with efficiencies that provide significant cost savings across a business. AI also refactors processes, creating new roles like prompt engineering. While companies have long been used to replacing and training a large percentage of the workforce every year lost to attrition, to maintain productivity the workforce that stays will also need an ambitious program of upskilling.
Fortunately, the solution is fairly straightforward: Make training, or more specifically upskilling, a core part of the general strategy regarding the entire workforce with an increased investment to match. Such a commitment will make it easier to attract new talent, retain high-skill staff through greater employee satisfaction, and keep workforces perpetually qualified for what’s to come. It’s time for upskilling to become a permanent part of an organisation’s culture, as declining to do so is a risky decision.
Why is reskilling not yet a high priority?
If upskilling was easy, it would already be more of a priority for organisations from the very beginning. The fact that it’s hard is the reason companies have instead relied on strong hiring practices and an attractive company culture. But in today’s labour market, high-skill workers tend to seek new opportunities sooner and the existing loyal employees aren’t properly incentivized to acquire new skills. Therefore, the companies best suited to achieve future business success will put upskilling and training at the core of what the organisation is known for. For that to happen, the company culture needs to be about upskilling, which is something today’s workers largely anticipate anyway. For instance, BCG data shows that 65% of workers are aware of coming disruptions in their fields and are even willing to reskill to remain competitively employed. This does not, however, mean that every one of those 65% of workers can reskill, even as 80% of them agree that using modern tools and methodologies is very important, according to BCG research. From an organisational perspective, there’s much that can be done to rectify this.
Upskilling must become permanent
The average skill half-life is now under five years, and in certain tech sectors, it drops to as low as two and a half years. While not all knowledge workers will face a job loss, many may find that AI and new technologies reshape their roles to the extent that they essentially work in entirely new fields. This highlights a significant advantage of embedding upskilling in company culture: imagine the strength of a company known for ensuring every hire is highly qualified and capable of adapting to organisational needs.
Don’t know how to take advantage of generative AI tools? Worried your career may become less relevant when a new forecasted tech innovation arrives? Interested in pursuing other roles at the same organisation that you don’t have the time to become better qualified for without formal instruction during off hours? Cool, cool, cool – none of these issues should be very concerning, but only if your employer understands the long-term value of training.
There’s also evidence that employees would welcome such a cultural shift, too. In a 2021 BCG survey, 65% of the 209,000 participating workers said they prefer to learn on the job. As a result, the best approach for reskilling is to do as much training as possible using shadowing assignments, internal apprenticeships, and trial periods. It will take time and effort to develop instruction-required retraining, and partnering with tech services firms with specialisation in this area will be crucial. But there are other avenues for an organisation to get started immediately. Informally, this can be done by organising and encouraging more mentoring scenarios. This may prove invaluable in the long run. After all, upskilling is not simply a matter of teaching people how to use a new device, which may become obsolete by next year. The upskilling experience involves learning how to think, act and thrive in a sustainable digital world over time.
Tech firms can take a wide range of steps to expand their ability to upskill workers before a crisis hits. They can democratise upskilling to enable employees to:
- To find and match their mentors with specific skills they are seeking to gain.
- To openly leverage internal talent exchange platforms for job rotations / wider global experience that can help build new skills.
- To start their career early (for some as early as high school) to have the time to get ahead of the curve and develop skills in line with what the industry demands and get ahead of the curve.
Upskilling as an investment in the future
One very quick way to size up whether your organisation is behind on the increasing need for upskilling is by assessing if it views training as a major expense that can’t be avoided – almost like the way most people would treat paying a water/sewage bill, holding their nose while typing in the credit card information. This sort of perspective is incompatible with the needs of today’s organisations, which would be better served by considering training costs as an investment. Reorienting a company based on a culture of upskilling will require a large investment to get off the ground, and it's important to set expectations realistically. Here are some ideas about the right scope of that investment:
A recent BCG study suggests that training and retraining represent as much as 1.5% of organisations’ total budgets, which may not be sufficient.
The World Economic Forum estimates that upskilling the 1.37 million U.S. workers whose jobs are threatened will cost $34 billion alone — or $24,800 per person! When you factor in those who require upskilling across the rest of the world, the sums become staggering.
That said, it's also an unavoidable cost that remains one of the best strategies for ensuring a company's future success. It fosters a culture of continuous learning and adaptability, crucial in the rapidly evolving business and technological landscapes. As previously mentioned, employees who are regularly trained and upskilled feel more valued and engaged, leading to increased job satisfaction and retention. This investment in employee development also ensures that the workforce remains competent and competitive, driving innovation and efficiency from within.
A culture that encourages and supports continuous personal and professional growth demonstrates a commitment to employee success, which can significantly enhance the company's reputation in the job market. Moreover, by continuously developing their employees' skills, companies can better navigate changing market dynamics, maintain a competitive edge, and achieve long-term growth and stability.