London has established itself as a global tech powerhouse. How will the city make the most of this movement to ensure prosperity for businesses and talent?
According to an in-depth 2019 report by the World Economic Forum, Boston Consulting Group and Burning Glass Technologies, it’s cheaper to reskill current employees than to hire new ones.
“Companies need to start to prepare for the future of work now, and up- and reskilling will be the biggest challenge in this endeavor. The good news is that there is a positive business case for up- and reskilling for many disrupted workers,” said Boston Consulting Group CEO, Rich Lesser.
Let’s take a closer look at the differences between reskilling and upskilling, and how you can use them to future-proof your business.
What is Reskilling and Upskilling?
In simplest terms, reskilling refers to changing the skill sets of existing employees by training them for completely new roles. Upskilling, on the other hand, involves helping existing employees stay in their current roles by developing new abilities and minimizing skills gaps.
Paying staff to learn at work isn’t new — most employees participate in learning or training sessions at some point in their careers. What’s new is that reskilling and upskilling could be the difference between a business that thrives and a business that doesn’t survive.
This isn’t hyperbole. According to the 2019 BrainStation Digital Skills Survey, 74 percent of Executives said their organization was actively involved in digital transformation activities, and 89 percent claim there are elements of their products and services that did not exist five years earlier. What’s more, 63 percent said that their digital investments are growing.
These types of massive changes are creating what the World Economic Forum called “a significant global challenge of mismatch between supply and demand of talent with the skills required.”
The Business Case for Reskilling
As the Digital Skills Survey made clear, it is now well understood – at least at the executive level – that technology is changing the way we work. And as automation and artificial intelligence continue to develop, these changes are only set to increase, with the elimination of certain jobs and the creation of new roles that demand knowledge of new and emerging technology.
The problem, however, is that there may not be enough skilled workers to meet that demand. According to the World Economic Forum report, professionals like Data Scientists, Machine Learning Specialists, and Blockchain Experts are already scarce and sought after by almost every industry. This crunch is only made worse when you consider that more than one million workers are projected to be displaced by technology in the next decade, according to the US Bureau of Labor Statistics.
The World Economic Forum suggests that “for 25 percent of at-risk employees, it would be in the financial interest of a company to take on their reskilling,” adding that the benefits of reskilling becomes even more evident when partnerships are considered.
“If industry-led collaboration (pooling resources or combining of similar reskilling efforts) could reduce reskilling costs and times by 30 percent, nearly half of the disrupted workforce could be reskilled by employers with a positive cost-benefit balance.”
The report goes on to suggest a couple of things companies can do to prepare for the future of work through reskilling:
Start at the Top (to Get Everyone Onboard)
The first step towards reskilling is knowing what skills will be needed in the future. Companies can tackle this issue through strategic workforce planning, and closing knowledge gaps among managers.
As an example, consider the case of L’Oréal, who made digital marketing upskilling one of the key components of its digital transformation strategy. The company created a leadership development program for executives, which was designed to give them the tools and knowledge for the digital age. More importantly, it ensured that everyone in the company was aware of what was needed for the future, and prepared to get there.
“A clear, easy-to-memorize digital group strategy is now vocally championed by leadership across the company,” Chief Digital Officer Lubomira Rochet told Harvard Business Review.
They were not alone in their industry. Estée Lauder took a similar approach to their digital transformation, analyzing their existing assets, channels, and competitors to develop something unique and valuable to customers. They also recognized existing skills gaps, and sent management teams to BrainStation for digital skills training. The result is a much-lauded digital-first marketing approach that involves social media influencers; virtual reality makeup tests; and beauty consultants on Facebook.
Upskilling management gives leaders the insight they need into emerging fields like data science, UX design, development, machine learning, and blockchain. This ultimately is a boon to companies as a whole, taking a lot of guesswork out of long-term strategy and recruitment.
“Industries that have management with an understanding of how to use (technical) skillset(s) in a meaningful way will gain a competitive advantage,” the World Economic Forum wrote.
Make Reskilling a Part of Your Culture
Reskilling not only makes sense financially, but also contributes to a culture of learning, which can pay dividends on the employee retention front. Data from Culture Amp shows that people who believe their job contributes to their development are 21 percent more likely to stay with their current employers.
Much of this is down to the anxiety felt by employees in the face of digital transformation initiatives. According to a study by Microsoft: 49 percent of employees fear change when digital transformation initiatives are introduced; 39 percent feel anxious when new technology is introduced; and 59 percent are concerned about their job security when a company starts to automate. Reskilling can be a great tool to mitigate this last point, as it demonstrates to employees that you value their contribution and experience enough to develop their skills for the future.
For example, consider the case of global travel and tourism industry IT supplier Amadeus. The company determined that the use of chatbots would improve the company’s customer service support function by automating a chunk of the process. Taking this step, however, could have led to significant job losses among the company’s support staff. Instead of laying off staff, though, Amadeus identified displaced employees as candidates for reskilling, and then moved affected employees into new roles, which boosted overall productivity and likely increased employee loyalty.
If you are considering a similar plan of action, the Microsoft study offered a number of suggestions for both companies and managers, including:
- Emphasizing collaborative potential of new digital technologies
- Giving people a chance to experience new technologies
- Clarifying how new technologies will fit in the organization
- Establishing a culture of continuous improvement and innovation
The World Economic Forum report also recommends rotating digital experts in and out of different project teams, and asking them to provide on-the-job training to their colleagues.
“During this process, (digital experts) may also identify high-potential employees suitable for a combination of targeted reskilling, shadowing and mentoring in order to develop more of this talent internally,” the report wrote.
Interested in how reskilling could work for your business? Click here to learn more about BrainStation for Business.