Upskilling in 2023: Here's How HR is Trying to Level-Up the Workforce

A popular alternative to hiring new talent, upskilling involves training existing employees in new talent sets. This technique can help HR leaders and managers close talent gaps – be it for soft skills (communication, leadership), digital skills (familiarity with software), hard skills (use of specific and difficult tools e.g. programming), emotional intelligence or any other skills their teams are deficient in.

However, upskilling isn’t without its challenges, and amid the Great Resignation, businesses need to ensure they’re striking the right balance of engagement, learning and recognition if they want to retain their most talented employees.

To find out more about how businesses are faring in their upskilling initiatives, we surveyed over 200 HR professionals, from Managers all the way to the C-Suite, across the UK and the US. These respondents worked for businesses with at least 250 employees all the way up the largest enterprises with over 25,000.

Why is upskilling so important?

The skills gap is no passing trend. According to our research, 68% of HR leaders have observed a high rate of staff turnover as a direct result of skills deficiencies in their organization. What’s more, well over half also identified lower-quality work (63%), a loss of productivity (60%) and lower levels of morale (54%).

If left unchecked, skills gaps can not only have a serious impact on employee satisfaction, engagement and retention, but they can also impact the business as a whole, with an inability to expand operations (33%) and a loss of revenue (21%) two significant consequences our respondents have encountered.

Employees can upskill themselves, but they need guidance

When asked to rate their employees’ ability to upskill themselves proactively, almost a quarter claimed it was ‘very good’. The vast majority think there’s room for improvement – 59% rated it as just ‘good’.

While only a combined 18% of respondents rated the competence of their employees here as bad, very bad or claimed they weren’t sure, the results suggest HR leaders and managers need to take a more proactive role in guiding upskilling initiatives and giving employees direction.

8 reasons why upskilling is so difficult

We asked our respondents to identify the single biggest challenge in upskilling their employees, and instead of flocking to one option, the results were varied:

1.     Talent shortage

Over a quarter (26%) of our HR leaders cite talent shortages as the biggest challenge in upskilling employees, reaffirming our hypothesis that workers ultimately need outside engagement to drive their upskilling programs rather than being trusted to manage it all on their own.

2.     Budget constraints

Budget constraints (22%) is the first of several challenges that present an overarching obstacle with upskilling – getting buy-in and signoff from the wider organization. Despite the fact that retaining employees is commonly viewed as better and cheaper in the long-run than recruiting, there’s clearly resistance to investing significantly in upskilling employees.

3.     Getting staff to engage in training programs

Another key issue for HR leaders to overcome is getting staff engaged with training in the first place. 22% cite employee engagement as the number one challenge in their upskilling initiatives.