What Is Upskilling?

Businesses may have grand plans to conquer their markets, but executing their strategies requires an agile workforce that can add and apply the necessary skills. Competitive companies know it’s vital to upskill employees to maintain optimal performance as job requirements evolve.

Upskilling can take many forms, including formal in-house training, certifications, university classes, conferences, and mentorship programs. It can also include special projects or short-term assignments to expose employees to new skills and fresh ideas. The big idea behind upskilling is to keep the employees you have and help them grow and develop to meet a company’s ever-changing talent needs.

What Is Upskilling?

Upskilling is when employees learn something new to be better at their jobs, and it happens in many ways throughout a person’s career. Naturally, workers learn on the job from receiving feedback, watching more experienced colleagues, and observing the nuances of how a company and industry operates. However, the most effective companies make upskilling a more official policy and process.

Top companies create clear strategies to continuously identify the skills the business needs to meet its goals—and the skills employees need to thrive. At successful companies, upskilling isn’t a one-time project. Instead, they create programs and policies to assess skills and deliver training and development on an ongoing basis. Such training could be formal in-house training on new software for a finance or human resources team or on using new equipment in a manufacturing or healthcare setting. It could be university courses that build to a degree or third-party programs that provide certifications for targeted, industry-specific skills. Upskilling could include mentorship programs to help emerging leaders gain the management skills needed for new challenges.

According to Mercer’s 2024 Global Talent Trends report, which surveyed 845 C-suite executives, upskilling and reskilling employees is the biggest source of productivity gains for organizations. These findings show that such efforts are vital to long-term business success.

The need for upskilling often stems from new technology. Technological advancements such as automation can make old skills obsolete, or they may require new skills to be effectively used. Artificial intelligence is the latest technology driving this upskilling cycle, as AI can replace some tasks while also requiring people to apply it in new ways in their existing roles.

As organizations drive their employee learning initiatives, their efforts generally fall into two broad categories: upskilling and reskilling.

Upskilling vs Reskilling

• Upskilling involves learning a skill to improve performance in your current role. Think of a software developer learning a new language or new programming techniques.
• Reskilling is when you develop the required skills to move into a different position. Consider a warehouse employee whose pick-and-pack job gets taken over by robots, leading them to get a commercial driver’s license to move into a delivery role.

Many companies help their workforce do both. These businesses realize it's in their best interest to support their workforce’s upskilling and reskilling efforts to remain competitive as business needs, technologies, processes, and industries change.

Key Differences

The key difference between upskilling and reskilling is the intention driving the learning. Upskilling is when an employee gains skills to remain effective or increase their effectiveness in their current role. Reskilling is when someone develops new skills to move into another position.

However, there are more similarities than differences between upskilling and reskilling. They’re both driven by the need to respond to changing conditions or requirements in the job market and the company’s talent needs. When done right, upskilling and reskilling can both improve a company’s bottom line performance and boost employees' pay and career prospects.

Upskilling FAQs

What are the challenges of upskilling?
Challenges of upskilling include identifying beneficial skills that each employee needs to learn, supplying relevant training materials, and setting aside dedicated time for learning.

What is an example of reskilling?
An example of reskilling is a retail sales associate participating in a company’s leadership training program to learn the skills needed to move into a management role.