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Why You Need to Prioritize Upskilling Your Workforce

Entrepreneur logo Entrepreneur 5/3/2021 Jeff Mazur
a person standing in front of a window © Ezra Bailey | Getty Images

According to a 2020 report from the World Economic Forum, at least 54% of all employees will need to enhance their skills to meet changing work requirements by 2022.

With a strong imperative and short timeline to reskill and upskill employees, the implications for entrepreneurs and small business leaders in the early stages of their companies’ life cycles are significant. How can they balance the need to dedicate resources to external growth while also turning inward to cultivate new skills in roughly half of their team members?

Naturally, the workforce has been rapidly transforming for decades. The shift to online and virtual dependency spurred by the pandemic caused it to speed up even more. And as the needs of companies change, the skills required of workers are evolving along with them. This includes both hard and soft skills — workers need more digital skills as well as a mindset of continuous learning, adaptability and flexibility.

Automation is playing a significant role in the increased need for workers with digital skills. As more job tasks are automated and companies rely more and more on artificial intelligence, the role workers play also evolves. In order to remain valuable to the future of work, people must be able to harness the power of technology and AI. And as companies undergo digital transformation and evaluate what job tasks can be replaced by automation, they will look for employees who have the soft skills and attitudes compatible with the change.

Related: Why Continuous Learning Is Critical for Entrepreneurs and Their Teams

Power to the people

Launching a reskilling initiative is not easy for any organization. My company, LaunchCode, has worked extensively with Fortune 500 companies on reskilling programs, and many still struggle with internal buy-in and logistics. For a smaller company or a startup, there’s less red tape and corporate buy-in to gain. But on the other hand, creating effective reskilling or upskilling programs is time-consuming and can present challenges when it comes to reallocating resources and manpower. Plus, a smaller business with fewer employees (or employees who wear multiple hats) may not be able to pull employees away from their normal day-to-day tasks to participate in new training sessions.

If companies can overcome the challenges of reskilling within their team, there are endless benefits. First, providing reskilling opportunities to employees increases retention because workers feel invested in the company and have the chance to learn new skills (and eventually move into higher-tech roles). Another huge advantage of reskilling is getting ahead of automation and possible employee displacement due to that automation.

In a survey of business leaders across industries, McKinsey & Co. found that “62% percent of executives believe they will need to retrain or replace more than a quarter of their workforce between now and 2023 due to advancing automation and digitization.” Because the pandemic has sped up a lot of companies’ automation processes, this evolution is moving even quicker.

Related: Why You Need to ‘Upskill’ to Keep on Top of Trends

Ahead of the curve

To effectively strike this balance, entrepreneurs and small business owners can utilize the following strategies for developing the internal skills they need in order to aggressively — and successfully — pursue growth opportunities.

1. Identify the skills your business will rely on in the future

Think about the capabilities your business will no longer depend on and what job tasks may be automated or eliminated by other technologies. This is an inexact science, but looking ahead and predicting what skills your business will depend on in the future will allow you to determine a rough outline of a skilling and reskilling plan.

As an example, JPMorgan Chase believes artificial intelligence and automation will greatly impact its workforce in the coming years and has pledged $350 million to train its employees. This investment aims to get current employees up to speed and prevent skill gaps that hamper production and profitability.

2. Create a culture of constant upskilling and continuous learning

To keep up with industry trends and be thinking ahead, your employees should have ample access to opportunities to keep their skills fresh or to learn new ones. A rising tide lifts all boats, after all.

Guardian Life Insurance is one company that exemplifies this apect. The organization implemented workshops and training boot camps to upskill its workforce and build a competitive edge. This is especially important as actuaries have access to exponentially more data to decipher than in years past due to smart-device health monitors, automobile sensors and other trackable technologies.

3. Don’t reinvent the wheel when you can look to experts for help

Creating and executing a reskilling plan can be a huge challenge for a small business. Luckily, lots of organizations have already created and perfected training programs that you can implement and easily integrate with your existing structure.

Ultimately, the future is coming, regardless of whether companies are prepared for it. To weather the uncertainty, the best umbrella is a proactive approach to training and upskilling that gives employees the tools they’ll need to survive, and grants the company the flexibility it needs to thrive.

Related: These are the Skills and Mindsets of the Leader of the Future

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