Upskilling: Why Should Companies Invest? Benefits Explained

Volodymyr Bilyk
05 May 2021

The upskilling and personal development plan are common employee benefits. Oftentimes it is one of the selling points of the position, especially in cases of lower-level positions. 

However, a personal development plan (aka PDP) for the sake of having one doesn’t mean much if it is not part of the more critical process that is upskilling.

In this article, we will explain what upskilling means and how it benefits the recruitment process.

What is upskilling?

Upskilling Employee Benefit

The definition of upskilling goes like this:

  • Upskilling is a process of developing or advancing the employee’s competencies. Usually, it is done by gaining certifications, passing courses, etc. 
  • It is the action part outlined by personal development plans and\or career development plans.

In a nutshell, upskilling is about conceptualizing an employee’s road towards “getting better at their job” from a perspective. In a way, it is about giving the development a direction.

  • For example, to better manage the team, the up-and-coming specialist needs to master the process automation techniques. 
  • These skills are not part of the mandatory skill-set right now, but they will be critical in the near future. 

What is the difference between upskilling and reskilling?

Upskilling is not the only professional development concept in human resources. There is also reskilling. 

Here’s the difference between the two:

  • Upskilling is about furthering or deepening the specialist’s skills in his field of work, i.e., providing an opportunity to get better at their job.
  • Reskilling is about preparing the employee to change his field of work – learn new skills for a new occupation.

Upskilling types explained

Traditionally, the professional development initiative is broken down into different stages based on the employee skill level. As such, professional development is often driven by overarching plots like “growing from middle-level specialist to senior-level.” 

Because of that, there are two major fields for professional development – one for soft skills and one for hard skills.

  • On the one hand, upskilling can be of a more general-purpose soft skills-focused initiative. For example, providing emotional intelligence training for employees. 
  • On the other hand, the focus might be on a specific aspect of professional activity, aka hard skills—for example, training recruiters to minimize the impact of hiring bias.

But why should companies even care about it?

Why does Upskilling Matter?

Why does upskilling matters?

The professional development effort is beneficial for business in several different ways. Let’s go through them one by one.

Upskilling as part of the employer value proposition

First and foremost, upskilling is one of the unsung features of the employee value proposition

  • At the recruitment stage, it as an employee benefit signifies that the company is taking the specialist’s expertise and giving an opportunity to develop. 
  • Sometimes, this feature is only implied in the value proposition, but it is better to spell it out upon presenting EVP.

Employee Retention through Upskilling

As an employee retention tool, upskilling can play a critical supporting role. 

It means a lot for employees when the company puts into making the employee experience more fulfilling. As such, upskilling is an essential indicator of an employer investing in the employee’s professional development. 

  • Some domains have less upward mobility than others—for example, software development. Sometimes the specialist is not interested in promotion into team leads or further into management and focuses on his craft.
  • In this case, this approach to professional development is a viable solution in increasing the value of employees.

Upskilling for Internal Recruitment

The other benefit of upskilling is that it helps to facilitate the internal recruitment process and keep the recruitment costs under control.  

The role of upskilling in internal recruitment is something of a failsafe. 

  • One of the biggest challenges of internal recruitment is the illusion of familiarity. Simply because you’ve seen the specialist in action in a lower position doesn’t mean this specialist will be up to snuff on a higher position. That’s where many companies stumble.
  • However, with a professional development program in the mix – you can prepare the specialist for the position. While employee success depends on more factors than just competence – at least you will have one aspect covered.   

The Big Challenge of Upskilling Benefit

Upskilling challenges

We’ve discussed the benefits of upskilling in detail, but there is also one thing that turns presenting professional development as part of EVP into a big challenge. 

Here’s why – the company is a business first and foremost, not the training facility. 

  • While it is a good thing that the company invests in employees developing their skills – it is not why the specialists are working for the company. 
  • Some companies ignore that fact and push forward the benefit of professional development. It attracts a lot of candidates who want to “learn on the job.” 

But there is a catch. When EVP is revolving around professional development – it can easily backfire on the company. 

  • The thing is – upskilling can be an exploit. Some candidates apply to get more “flight hours” in their field. They see companies that push the professional development narrative as an easy opportunity to benefit themselves. 
  • After getting their share of “professional development,” – they move on to the greener pastures. That’s an example of a low quality of hire instance that leads to productivity losses.
  • As a result, the company needs to restart the hiring process to fill the void. That can get expensive and time-consuming pretty fast.

The same thing can happen if the company leans too hard on upskilling for employee retention.

  • The specialist would double down on that, gain more expertise and then jump ship to another company with a better compensation package.

How to avoid similar scenarios? 

  • It is crucial to keep in mind that upskilling is a critical part of EVP and employee retention, but it is not the main part.

In both cases, it is essential to outline professional development as an opportunity in-between other, more important, things. 

  • However, the main focus is on tangible parts of the compensation package (salary, insurance, bonuses, etc.).

In conclusion

Upskilling is one of the most diverse human resources tools out there. 

  • It can be a viable argument in employee retention;
  • Similarly, it can be a tool for maximizing internal opportunities;
  • Finally, it is a good thing to have in your employer’s value proposition.

This article is a part of the series on the employee benefits and employer value proposition. 

If you need help with fine-tuning your employer value proposition or need to implement the professional development program – our HR consultants can help you.

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