Why upskilling and reskilling are essential for success

Here’s the bad news: It’s nearly impossible to pinpoint the exact ROI of upskilling and reskilling your employees.

The good news is that by fostering a culture of learning and investing in employee learning and development tools, upskilling can contribute to better business outcomes for any organization. And while it's nearly impossible to attribute every dollar as a direct return on this investment, modern learning management systems can track outcomes that map back to an organization's business goals.

A recent study found that organizations that already launched successful reskilling programs before COVID-19 were better able to address skills gaps caused by technological disruptions or implement new business models or strategies.

In other words, they had future-proofed themselves. And in many cases, improved their overall bottom line. The future is moving fast, but there's still plenty of time to change it if you take the right steps.

Want to understand how to upskill and reskill your workforce? Explore the Cornerstone 2022 Global Skills report.

Upskilling and reskilling are the top priority for nearly 60% of leadership and development (L&D) pros

This certainly points to a strong uptick in focus on learning and development endeavors. The top three areas of focus for L&D programs in 2021 for organizations globally were (in order of popularity among L&D leaders):

1. Upskilling and reskilling — 59%

2. Leadership and management — 53%

3. Virtual onboarding — 33%

And, according to the same report from LinkedIn, 73% of L&D professionals expect to spend less on Instructor-Led Training (ILT), and 79% expect to spend more on online learning.

60% of CEOs say a strong upskilling program positively impacts their company culture

These same CEOs, whose organizations offered more advanced upskilling, had more confidence in their revenue. An upskilling program may contribute to confidence-building within organizations because it provides a clear, real-life action plan. Upskilling increases loyalty, productivity, and retention, and builds community.

A workforce training program focused on soft skills delivered a 250% return on investment

A study by MIT Sloan School of Management found that a 12-month workforce training program focused on soft skills delivered a 250% return on investment (ROI) within eight months of completion. The gain was mainly due to increased productivity due to a focus on the essential soft skills the modern workplace requires, like knowledge, flexibility, and resilience. Adaptation and resilience likely are two of the most valuable skills workers can possess. In addition, interpersonal skills such as critical thinking, communication, and collaboration are crucial.

50% of all employees will need reskilling in the next 5 years

In an increasingly tight labor market, the opportunity for workers to reskill and upskill has narrowed. According to The World Economic Forum, for those workers set to remain in their roles, the share of core skills that will change in the next five years is 40%, and 50% of all employees will need reskilling. Skills gaps will remain high as in-demand skills across jobs change in the next five years. The top skills and skill groups employers see as rising in prominence in the lead-up to 2025 include:

The World Economic Forum’s The Future of Jobs report includes several eye-opening statistics that underscore how important upskilling and reskilling have become to businesses' viability.

93% of Millennial and Gen Z workers expect employers to provide learning opportunities

By 2020, 50% of the U.S. workforce was made up of Millennials. By 2030, it’s predicted to be 75%. For Millennials, on-the-job training is a decisive factor in deciding whether to accept a position or leave an organization.

Turnover can cost an organization more than half of the salary for entry-level jobs and up to 200% for senior executive-level positions. Upskilling leads to less turnover because upskilling employees costs a fraction of recruiting and helps increase retention rates.

Next steps to ROI from upskilling and reskilling

The evidence for instituting robust upskilling and reskilling programs is in, and it’s clear: it drives a healthy ROI for those organizations that commit to it.

But where should your organization focus its efforts at first?

An excellent place to start is by creating a simple framework to hone skills developed toward your organization's strategic priorities since those can impact the core business. HR and L&D departments need to ensure they are aligned with business objectives and measure the impact of their efforts using business-aligned metrics.

As we know, the need to upskill and reskill employees has increased as the future continues to remain uncertain. But most don't know how to do it quickly, effectively, and at scale. Those that do have learned it’s key to automate their upskilling and reskilling so that overall ROI is optimized.