The skills necessary to perform well and stay competitive seem to be evolving faster than many companies are prepared for. In the past, the common wisdom for expanding into new roles and skills was to hire external candidates who came “ready-made” with that specific knowledge or skill set. Today, however, more and more companies are seeing the advantages of a different tactic: upskilling current employees.
The Economic Upside of Upskilling
According to PwC, 52% of CEOs are definitely planning to reduce operating costs in the coming year, and another 33% are considering doing the same. In the same survey, however, a full 60% of the same CEOs say they do not plan to reduce their workforce, which is typically one of the most “obvious” cuts to make when reducing costs.
Instead, the focus has largely shifted to the combined efforts of retention and upskilling. As the workplace continues to shift and the need for new skills is immediate, many companies are changing their approach. Rather than try to hire new talent with the specific qualifications and skills needed for updated roles, many teams are finding that it is more effective to focus on retaining current workers—who already have an understanding of and familiarity with the company as a whole—and upskilling or reskilling them to better suit the changing needs.
The advantages aren’t merely cultural or time-centric; they’re budgetary, too. It can cost up to six times more to fill a role with an external hire than it does to build and upskill from within the company, and external hires can have a turnover rate up to two or three times higher than internal promotions. This is also true when it comes to replacing current employees when they exit: according to Gallup, the cost of replacing an individual employee can range from one-half to two times the employee’s annual salary. In other words: retention and career development are a lot more cost-effective than excessive turnover in current roles and recruiting externally for new roles.
Hiring and Utilizing Flexible Talent
Today, more than ever, talent is interested in upskilling and career development, and many companies are shifting accordingly. 34% of organizations reported to Lattice that their top priority for 2023 is learning and development, making it the third most-common priority of the year (behind only employee engagement and manager training—both of which, not incidentally, connect to career development as well). As individuals are more frequently taking a big-picture view of the employee experience, beyond “basics” like compensation and health care benefits, career development is taking on more importance when it comes to attracting and retaining top talent.
It takes time and resources to fully support an upskilling initiative at your organization. Career development can take many forms, with common options including:
- Opportunities for cross-training
- Educational and training opportunities, both offered by the organization and offered through external sources
- A formal or informal mentorship program
- Targeted upskilling courses for specific needs
- Certification programs
Many employees are eager to expand their knowledge base and gain new skills, but it’s easy for them to feel overwhelmed if they’re merely offered a huge “catalog” of options and left to their own devices. Successful, effective upskilling is about targeting particular skills and goals, then planning their function, and putting them into practice/ work processes. Upskilling is about gaining a deeper knowledge of a specific skill set, as opposed to the more traditional “educational” and hands-off approach of having individuals gain more superficial knowledge across a broader range.
How Blue Rock Can Help
If your organization has embarked on a journey of designing a culture of flexibility, upskilling, and talent development, Blue Rock can help. We have partnered with multiple clients to hire senior talent leaders, build out exceptional HR teams and provide guidance in defining organizational needs and ideal candidate profiles.
Contact our team to learn more.
By Joshua Jones
About the Author
As Managing Director, Executive Search, Joshua leads sourcing and executive search teams to identify, assess, and place highly talented leaders for his clients. Josh and his teams have successfully placed Human Resources leaders for global, publicly traded clients and private organizations across multiple industry verticals. Joshua’s clients view him as a trusted search partner with an in-depth understanding of the Human Resources function.