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Libby Marks

What Is Upskilling & How Can It Future-Proof Your Business

Discover how upskilling can supercharge your business performance. And create a rock-solid upskilling strategy with our seven-step guide.

According to the 2022 LinkedIn Workplace Learning Report, upskilling employees is the number two priority for L&D leaders. 46% of respondents cite ‘upskilling and reskilling employees’ as a primary focus for their business. And it's easy to see why. 

Upskilling promises to make your business more resilient to change, more ready for opportunities, and more competitive in an evolving landscape. 

But it can be hard to know where to start - and even harder to get buy-in. 

Perhaps that’s why LinkedIn found only 15% of L&D pros have active upskilling and reskilling programs, and only 5% have made it to the stage where they’re measuring and assessing results. 

If you can see the benefits of upskilling but are struggling to get started, this guide is for you.

It’s got a seven-step guide to creating a rock-solid upskilling strategy for your project-based business, tips on writing an impossible-to-ignore business case, plus expert tips from resourcing guru, Christine Robinson.

What is upskilling?

Upskilling is when a business invests in training employees to enhance their skills and knowledge. It helps businesses - and their employees - stay abreast of the latest trends, technology, and best practices in their sector. This fuels higher business performance, innovation, and employee engagement. 

But it isn’t just about training staff. Upskilling is a strategic approach to staff development - one that increases the organization’s capacity and capabilities to meet its future plans. It’s about aligning the workforce to the company’s goals and objectives. 

By looking ahead - and developing the workforce they need for the future - organizations can reduce overall costs, create a stable and sustainable talent pipeline, and seize new opportunities with greater confidence.

What’s the difference between upskilling and reskilling?

Upskilling is about developing skills related to your existing knowledge - to deepen your expertise and help you advance in your current job. For businesses, it’s about increasing their capabilities and capacity for their current direction of travel.  

Reskilling is about developing new skills to take you in a different direction - so you are equipped to change roles and succeed on a new career path. For businesses, it’s about preparing their workforce for a shift in direction. Particularly important when the World Economic Forum predicts 85 million jobs will be made obsolete by tech by 2025.

If you want to know more about reskilling your business, your next Runn read should be How to Develop a Reskilling Culture.

Why is upskilling important? The benefits of upskilling

Upskilling is beneficial to businesses on a number of levels. Upskilling programs 

📈 Stimulate growth through higher productivity, engagement, and agility

💡 Foster innovation through familiarisation with new technology and best practices

⚖️ Increase stability by reducing staff churn and increasing employee retention rates 

In our interview with Runn's CEO Tim Copeland, he explained the importance of upskilling. 

One of the big trends is how resource management supports skills and capability management - and that’s key in an increasingly volatile business landscape. 

A metric that organizations have historically focused on is resource utilization - how much time is spent doing billable work or productive work. And while that's still an incredibly useful metric, it's not necessarily the leading indicator of success. 

Utilization is very much a metric of this week. You know you're very productive right now. But it isn’t forward-looking. It doesn’t help your business prepare to be successful in the future. Something companies need to think about is how well-suited is their current workforce to the needs of their clients in the future - particularly if those needs are changing. 

Here are five ways upskilling your staff can help your business thrive and grow.

Bridge the growing skills gap

Recruiting the right people was always a challenge. But it’s considerably harder these days. 

The growing digital talent gap means it's more difficult to find suitably qualified candidates. And the growth in remote work means top talent is no longer limited to local businesses, the world is at their feet. 

This candidate-driven job market is bad news for businesses looking to fill roles. 

When you can’t find external people with the skills needed for the digital economy, it makes sense to look internally and upskill your existing employees. 

Going to the open market to find high-tier candidates will cost you more than developing staff in-house. 

Plus, a new employee takes time (and therefore money) to onboard and understand the intricacies of your business. Whereas an internal candidate comes with that knowledge pre-loaded - they’re good to go. 

Increase agility and capacity

In professional service firms - and other project-based businesses - resource managers create dynamic teams from a pool of available people (resources). When there aren’t enough of a particular type of resource available, it’s detrimental to your business. 

Projects can be delayed while they wait for a specific resource - say a software engineer - to become available. Or you might choose not to take on a new project due to limited resource availability.  

Upskilling similar resources to a higher level can solve these problems. For example, if you face bottlenecks because you only have one senior developer on your team, you could invest in upskilling some of your midweight developers to take on more responsibility. 

You can then take on more junior developers to backfill their roles - increasing your capacity without having to hire an expensive senior team member. 

Upskilling creates a sustainable pipeline of talent that can fuel your business success. It increases your capacity and agility when opportunity knocks. And can improve your resource utilization rate, by getting under-used employees off the bench and into action.

Retain employees (and reduce turnover costs) 

Upskilling your employees keeps them happier and more engaged - which means they’re more likely to stick around and repay your investment in them. That’s why upskilling is one of the employee retention strategies for future-focused businesses.  

According to Gallup, ‘opportunities to learn and grow’ and ‘some at work who encourages my development’ are two key contributors to employee engagement. 

And the internal doors that are opened by upskilling are also significant. LinkedIn’s 2022 Workplace Learning report finds companies that excel at internal mobility retain employees for an average of 5.4 years, compared to an average of 2.9 years for businesses that struggle with it.

Given that replacing an employee is estimated to cost the equivalent of 6-9 months of their salary, upskilling makes financial sense. 

[Facts worth sharing with any senior leaders, who may assume upskilled employees will use their elevated skills to find a new job elsewhere…]

Futureproof your workforce

Upskilling is a strategic exercise designed to align your workforce to your future ambitions. Let’s be crystal clear here. This isn’t the scattergun approach to staff training. It isn’t about throwing courses at people and hoping they learn something useful. 

It’s about knowing the expertise you’ll need to achieve your 2, 3 and 5-year plans - then upskilling existing employees to develop the team you’ll need in the next few years, as the market demands. 

(Of course, it isn’t just upskilling that will get you there. Invariably, there’ll be roles that become redundant in your business and employees that need reskilling for new roles within the business. Plus there may be specialist positions you need to fill externally.)

You can identify all of these needs through strategic capacity planning. More on this below.

Increase innovation and competitiveness

A final benefit of upskilling is that it equips your employees with cutting-edge knowledge that increases your competitive advantage.

Virtually every sector is impacted by the pace of technological change. Processes and expertise can become obsolete frighteningly fast. A key part of upskilling is plugging your employees into the latest trends in your sector, so they can bring that knowledge to bear in your business. 

What does upskilling mean in the future of work?

The future of work will look very different to today, thanks to digital transformation - and globalization - revolutionizing how and where we can work. Not to mention the millions of jobs being significantly altered by technology. 

In this context, upskilling is imperative - not just for businesses but the economy as a whole. Businesses that proactively upskill their employees for the future of work will reap the benefits - staying relevant and competitive even as their industry evolves around them. 

Harnessing automation and AI

The robots march ever-onward, reshaping everything from individual roles to whole industries. Upskilling helps workers and businesses keep pace with technological change and get to grips with new tools. 

For workers, this ensures ongoing relevance in a changing environment and a sense of security. For organizations, it means integrating and harnessing new technology to advance their business - without the disruption of replacing their workforce or making redundancies. 

Diversifying to futureproof 

Given that some jobs of the future don’t even exist yet, upskilling helps diversify employees’ skill sets, providing a stronger foundation for an as-yet-unknown future. 

Developing multidisciplinary skills will equip workers to pivot more easily to new roles in the future, which means less disruption for your business.

Cultivating transferable skills

Upskilling isn’t just about technical skills - it can include ‘soft skills’ like critical thinking, problem-solving, leadership skills, and creativity. Supporting employees to develop these skills helps foster innovation and bolster competitiveness in an evolving market. 

Plus, these skills are evergreen and transferable, meaning you’ll continue to benefit as a business, even if job descriptions are significantly different in the future.

Altruistic upskilling

There is also an argument for altruistic upskilling. Upskilling workers knowing that they will - one day - move on. If all businesses invest in upskilling their people, that means a more highly skilled workforce generally and a pipeline of more qualified candidates for every future role. 

This means you don’t just benefit from upskilling your employees, but from the employees other organizations have upskilled too. Plus, a buoyant economy with high employment is ideal for business growth generally. 

An example of upskilling

In our recent webinar, our CEO Tim provided an interesting example of how an upskilling strategy could help the business: 

A few months back, I engaged in a conversation with the CFO of a considerably large company. During our discussion, he recounted an experience where the company had shifted its focus from staff utilization. This change came after two decades of operating as a well-established organization. For about 20 years, utilization was their North Star, getting the most out of their staff's time. It was all about making sure everyone's busy and that supposedly drove their success.

However, they’ve come to realize that the skill set possessed by their workforce wasn't necessarily the most sought-after in the market. Consequently, they chose to temporarily step back from focusing on utilization and redirect their efforts towards comprehensive staff training and development, with a particular focus on their sales team. The company even sought projects aligned with the evolving skill set they were cultivating.

This strategic shift wasn't without its challenges. It involved a six-month period of significant adjustments, entailing substantial costs for the transformative process. The result, upon reevaluation, was a scenario in which their staff's utilization was lower than before, yet the work they were undertaking held greater value for their clients.

This transition yielded an intriguing synergy: the company's profitability increased while the workforce experienced reduced stress levels. 

Operating under the premise that allocating 100% of staff time solely to work tasks left little room for creativity, and even practical considerations like sick leave, they recalibrated their approach. By targeting, for instance, 80% of planned work, they allowed space for spontaneity and creativity to flourish. Instead of aiming for that elusive 100% utilization, they dialed it down to 80%.

Ultimately, this balance facilitated a more productive and innovative work environment. Entrusting employees to manage their time effectively eliminated the need for micromanagement on an hourly basis.

So in the future of work, people are going to care more about making better use of the small number of staff that they've got. Making sure they’re highly effective and have the right skills and training. And to do that they need a long-term forecast into their pipeline, capacity, and capabilities.

How do you develop an upskilling strategy?

It might seem daunting to develop an upskilling strategy. After all, how do you know what skills you’ve got or might need in the future? 

Follow our step-by-step guide and you’ll get there - developing a strategy that aligns your organizational ambitions, industry needs, and employee aspirations.  

Create a skills inventory

Firstly, you need to audit what skills you already have in-house. Hopefully, you might already have a skills inventory in place - one that has a record of the skills each individual staff member has. Having a skills management system in place is super beneficial, as you’ll have this information at your fingertips already. 

But if you don’t, don’t worry. Today’s a great day to start one! A simple spreadsheet will do. Ask every staff member to list their existing skill set, along with their proficiency level.

[And when you’re ready to upgrade from using spreadsheets, give Runn a try. We’ve got a free 14-day trial]  

Understand employee ambitions 

An often overlooked step is to understand your employees’ goals. People crave opportunities for professional growth. Aligning development opportunities with people’s ambitions is a surefire way to increase engagement and retention. And, as our CEO Tim, noted in our recent webinar - What We’ve Learned from Conversations with 1,000 Resource Managers - motivated people need less management. 

As part of your skills audit, ask employees to flag whether each skill is one they enjoy using and would like to develop more, or something they don’t enjoy or wish to pursue further. This will help you identify training and development opportunities that work for your business and your employees.

You should also seek to understand employee goals through 1:1s and general performance management, so you can co-design their development within the business.

Jennifer McDermott, bringing experience from the pharmaceutical industry, puts a strong focus on building relationships:

One thing is that I ensure I get to know all the people within my organization very well, no matter their job title [...] I like to know from the shop floor employees what is their 5-year plan. This discussion helps them to really think about career possibilities that they may not have thought about or considered. It is my passion to help unlock each team member’s potential and how I can contribute to them getting to their goal.

Christine, in turn, believes that knowing employees well is an industry agnostic best practice every resource manager should follow: 

The most integral and basic best practice is having a keen and acute understanding of what the pulse of the organization is, what is driving people right now, what they are looking for, in terms of diversity of experience or the evolution of where they are in their career. Resource management is so much less difficult when you've established that groundwork of genuinely connecting with people.

Conduct a skills gap analysis 

Next, you need to understand what skills you’ll need in the future. The best place to start is your organization’s corporate strategy document. What are your company’s business goals? What skills will they need to get there? 

Also, look at industry trends. Is there change on the horizon? How might that impact how your business operates? You should already have a good idea about this from your organization’s strategic capacity planning process.

Finally - for project-based businesses - what does your future pipeline look like? What projects do you already have confirmed. And which are you hoping to pitch for or pursue?

Once you’ve determined the skills you’ll need for future success, analyze the gaps between your current collective skill set and the one you’ll need. Perhaps unsurprisingly, this is known as a skills gap analysis

The role of the resource manager in upskilling

In our recent webinar - Resourcing for Success - Christine Robinson, former Managing Director of Resource Management for Baker Tilly US, shared best practices for ambitious businesses. 

She highlighted the important role that resource managers play in upskilling in professional services firms.

If you are interested in growing your organization and the services it provides by really doubling down on a particular skill set, the resource manager can be instrumental in making this happen. 

They can go look within the business to see who already has that skill set, or who has a skill set that is similar to the requirements. 

They can look at the work in the pipeline, see what the next wave of work is going to look like, and from there strategize around how demand for these skills will be met. Who within the team needs to be upskilled, or reskilled, at what pace.

To do this, the resource manager can look at information such as the future project pipeline, the company’s current skill profile, resource utilization rates (especially over-utilization), and frequency of resource clashes and bottlenecks.

Prioritize upskilling opportunities 

Your skills gap analysis will reveal lots of development opportunities. The question is, with limited resources, which do you pursue? You need to prioritize the gaps you’ve identified. Which are most business-critical? Which could have the biggest impact on business performance? 

Unless you have a very specific challenge in your industry, prioritize skills that improve your use of technology and product/service delivery, as these are likely to be most impactful.  

Develop an upskilling plan 

Equipped with your list of upskilling priorities, you can create a plan to help upskill your workforce. This might include 

  • Deliver in-house training sessions 
  • Develop online courses and learning resources for staff
  • Hiring external trainers to deliver workshops
  • Sending employees on courses and conferences
  • Funding apprenticeships or college degrees
  • Creating internal mentorship programs
  • Rewarding employees for (relevant) independent learning
  • Cultivating a culture of continuous learning and professional development

Don’t forget to allocate a budget!

Make time for upskilling

As well as providing money to upskill employees, you’ll also need to budget for the time it takes. They’ll need unallocated time to complete training programs without compromising project outcomes. 

Assuming that you’re already following best practices and allocating employees to roughly 85% capacity, you’ll need to drop that down. 

Be aware that this may temporarily impact team capacity and make appropriate adjustments - such as adjusting project timescales, assigning additional resource, or scheduling training at quieter times. 

Time tracking can be really helpful here, as Christine Robinson points out. 

Time tracking is not just about what people are doing hour to hour. It's the snowball effect that this has. When you accumulate all that information, it really gives you the sense of whether the firm is on track to meet organizational objectives, which affects just about every process in the organization. Whether people have the bandwidth to pursue the upskilling opportunities that are near and dear to their hearts, like attending conferences and joining seminars, often depends on what this big picture looks like.

Measure progress 

With your future business success in the balance, you need to make sure your upskilling strategy is working. Establish KPIs at the start and monitor progress towards them. 

  • Compare employees’ self-assessed proficiency in different skills from the start of the programme to now
  • Assess the number of staff that have developed your desired skills
  • Look for potential impact on other metrics like customer satisfaction

How can you prioritize upskilling in your business? 

We know it can be hard to get buy-in for anything that isn’t immediately beneficial. Upskilling demands immediate attention and investment, with minimal immediate impact. 

You’ll need to create a compelling business case for your upskilling efforts, by demonstrating how they will contribute to the organization's success and sustainability. In some cases, it’s survival, full stop. 

When making the business case for investment

  • Cite statistics about the number of jobs likely to be impacted by technological change in the coming years - especially any related to your specific industry
  • Show strategic alignment - refer back to the corporate strategy and use your skills gap analysis to catalyze senior management into action
  • Highlight the wide-ranging benefits - from agility and innovation to increased productivity and employee engagement
  • Prove the ROI - where possible, quantify the benefits - such as lower employee turnover costs - to show that the benefits outweigh the investment
  • Benchmark against comparators - look for information on how competitors are upskilling their employees   
  • Provide case studies - showcase other businesses that have invested in upskilling and derived quantifiable benefits as a result 

Hopefully, we’ve sold you on the benefits of upskilling your employees and provided a framework to make it easier.

Invest in upskilling and you should see higher employee satisfaction, engagement, and productivity - as well as boosting your employer brand with external candidates. 

You’ll also benefit from greater adaptibility and resilience, higher innovation, and greater competitiveness through use of the latest tech.

Speaking of the latest tech…while you’re here… Did you know Runn can help with your upskilling agenda?

Runn is a resource management platform that includes invaluable tools for strategic capacity planning, skills management, project planning, resource scheduling, and more. 

It puts your skills inventory, as well as reports, dashboards, and data analytics on resource utilization, capacity, and more.

And the best news…? You can try it for free, for 14 days, with just your email address. 

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