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Effective upskilling helps companies improve their employees’ skills, stay competitive with evolving technology, increase productivity and reduce turnover. Yet research from shows that only 26% of employees in the United States strongly agree that their employers encourage them to develop new skills, and less than half of them feel they have the necessary skills to be exceptional in their current roles. Companies that do offer upskilling opportunities, however, provide a clear development pathway, close skills gaps and build a more motivated workforce. Read on to find out how they do this.

An upskilling program seeks to enhance employees’ abilities through targeted training and development. The purpose is to close skill gaps and equip them for future roles or career opportunities. This might be achieved through a training program, online course, mentorship or graduate program.

So, what does upskilling look like? Think of digital marketers who enhance their data analytics skills to better measure campaign success. Or software developers who learn a new programming language to create more advanced applications.

Upskilling isn’t just a way to prepare existing staff for emerging roles; it’s an investment in employees that can save a company significant turnover costs. Many employees view upskilling positively: They recognize it as a means to do their jobs more efficiently and possibly even change career paths or grow into new roles down the road.

Common types of upskilling programs include:

• Foundational and role-focused learning: This type of program helps build technical skills and prepare candidates for the workforce. Many of them offer credentials such as licenses, certifications, and career-based or academic credits.
• Hands-on and applied practice: This approach helps bridge the gap between learning and on-the-job application. It typically includes internships, apprenticeships, co-ops, stackable job credits and job rotations.
• Formal education: Employers may sponsor academic coursework and degrees to help equip their employees with advanced problem-solving, technical and leadership skills.
• Leadership development and career growth: This type of program helps employees develop leadership and advanced career skills in problem-solving, communication, empathy, collaboration, critical thinking and financial literacy.

Upskilling brings value to both employees and organizations. For businesses, it offers a cost-effective way to promote existing staff rather than recruit externally. According to some estimates, replacing an employee can cost a company .

Of course, upskilling is valuable in ways beyond the bottom line: Leveraging workers who already understand the company’s culture and operations helps ensure company cohesion.

Additionally, training and career development are important perks to many employees. An upskilling program allows employees to explore new career paths, enhance their credentials, become more competitive in the workforce and better contribute to a company’s success.

Skills gaps often exist between a company’s existing capabilities and the competencies it needs to fulfill its objectives. According to a , roughly 87% of executives claim they encounter workplace skills gaps, especially among recent college graduates.

To conduct a skills gap analysis, company leadership must first identify which skills their current employees need immediately (and moving forward) to align an upskilling program with the organization’s success. To make the process easier, here’s what companies should look for:

• Internal and external factors shaping an organization
• Economic, cultural and market influences on a company
• Key strategies, goals and performance metrics
• Business functions and roles that align with current and future success
• Capabilities employees need to meet a company’s performance targets

Once companies have a clear starting point for an upskilling program, they can set goals by integrating the SMART (specific, measurable, attainable, relevant and time-based) strategy. Here’s how it works.

• Define specific goals: Well-defined goals outline exactly what an organization needs to accomplish, including who is involved, the location, the timeline and the purpose.
• Make goals measurable: Tracking progress requires establishing metrics and milestones to evaluate success. Using a dashboard with visual elements like charts or graphs is an excellent way to monitor progress.
• Set realistic targets: A company’s goals must be achievable based on available resources and capabilities.
• Align goals with the company’s vision: Every goal should connect to an organization’s broader mission and purpose, whether short term or long term.
• Establish deadlines: Deadlines help motivate teams, encourage consistent progress and prevent delays. 

Developing tailored, skill-based pathways for employees may help a company adapt during an economic downturn and offer better job security and stability. An upskilling program allows companies to design intentional career paths rooted in existing employee abilities.

Effective upskilling isn’t always one size fits all. Companies should consider integrating delivery methods tailored to various on-the-job learning styles. These might include linguistic (reading, writing and speaking), visual (videos, graphs and images), kinesthetic (hands-on) and intrapersonal (reflective) learning.

To identify employees’ learning styles, organizations can have staff members complete an aptitude and communication assessment. Additionally, integrating AI into upskilling can streamline the process by tailoring training to an employee’s individual learning style and existing skill set.

For an upskilling program to be effective, all stakeholders should be on board. This might involve collaborating with operations, finance, business units and human resources to make upskilling an integral part of the workforce plan.

Additionally, upskilling implementation should be centered on data and measurements to track outcomes. Key metrics should be established and expectations should be set to ensure these metrics are being tracked.

No matter how savvy an upskilling program is, companies still run into obstacles that can slow down the process. Here are a few common upskilling challenges and how to overcome them.

Workers often face financial barriers when pursuing upskilling opportunities. According to , among those interested in upskilling, approximately half cite the cost of education as an obstacle. Additionally, access to financial support and the cost of lost wages are major concerns, especially if training is unpaid.

For workers ages 18 to 24 and those earning less than $50,000 annually, access to transportation is also a challenge. Plus, lower-income Americans may not have access to reliable, high-speed internet or devices to pursue training.

Organizations can offset the cost of an upskilling program by offering tuition assistance, scholarships, on-the-job training and apprenticeship programs. Plus, companies may be able to obtain funding through state and federal grant programs.

Time constraints are a particular challenge for more experienced workers, according to the same McKinsey study. Roughly half of respondents ages 35 to 64 with annual household incomes greater than $100,000 cite time as a barrier to upskilling.

To address time constraints, companies can offer part-time, self-paced or remote training programs that allow workers to fit upskilling into their schedules. Additionally, they can allow flexible work arrangements and provide transportation options such as shuttles.

Some employees might feel uncomfortable taking on new responsibilities, or they may believe that they won’t benefit from change. To address this, companies can invite employees to express their concerns to truly understand where the objection stems from.

Organizations can also involve senior leadership to help work through those concerns and incentivize upskilling among employees. Ultimately, offering employees both education about their options (and what they can lead to) as well as the opportunity to discuss their concerns can go a long way toward creating a collaborative approach to upskilling.

¹û¶³ÊÓƵ works with employers to design upskilling programs that evolve with your workforce. Our adaptable skills solutions help address gaps, impact retention, and prepare employees for what’s next. Explore our workforce solutions.