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Upskill, reskill or hire? A guide to smarter skill development

Future-proof your organization by revolutionizing your talent acquisition and training strategies 

The pandemic has forced many business leaders to realize that the skills they’ll need inside their organizations in the future will likely not be the ones they’ve needed in the past. The quick shift to working remotely exposed the gaps in the capabilities of many organizations and their people. But it’s also led to employees demanding more autonomy and wanting to engage in more strategic work. And with generative artificial intelligence (GenAI), 69% of CEOs believe that GenAI will require most of their workforce to develop new skills in the next three years. 

At the same time, more companies are automating day-to-day tasks, which then frees up their staff’s time to innovate and focus more on growing the company. 

Here at PwC, where we recently rolled out a three-year, $1B investment in GenAI, we’re already starting to see productivity surge in some areas by as much as 40%.” 

With all of that in mind, organizations are now looking for people who have a mix of analytical thinking, creative thinking, and self-efficacy skills, according to World Economic Forum - Future of Jobs Report. Going forward, those soft skills — critical thinking, clear communication, empathy and more — will become increasingly important.  

Creating a workforce with the right mix of skills has always been a challenge for companies, and for CEO’s, “keeping workers happy and engaged will be a mission-critical priority”. That problem will likely only increase as the definition of work, and the needs of employees, evolve in a post-pandemic environment.  

So, what can companies do? 

There are three main ways businesses can manage skills shortages: hire new talent, reskill current staff or upskill employees. Here’s the breakdown of each approach. 

1. Hiring new talent (and why it can be problematic) 

Companies often hire new talent to acquire the skills they need, rather than training their current staff. It may seem like a simple solution to a complex problem, but there are potential issues with this approach.  

  • Talent can be scarce. These days there simply aren't enough people in the market with the skills most organizations need. Even if you can find the experience you need for your business today, those skills may not evolve alongside your company. According to the World Economic Forum, employers predict that 44% of workers' skills will be disrupted in the next five years.  

  • Hiring takes time and money. It can cost companies thousands of dollars to hire a new employee, not to mention the weeks it could take to find the right person. Beyond that, there’s an additional productivity gap between onboarding and integrating those new employees into your organization. 

  • Institutional knowledge matters. An employee who’s worked for your organization for years has an in-depth understanding of both your culture and your customers. They’re also already comfortable with your corporate structure, and they’re adept at using the tools, systems and vocabulary that may be unique to your company.  

2. Reality of reskilling  

Training can deliver increased benefits to the organizations if done well. However, the landscape is shown to be tougher as although six in 10 workers will require training before 2027, only half of workers are seen to have access to adequate training opportunities today. 

Reskilling involves teaching employees new skills so they can do different jobs than the ones they have today. It often requires looking for people with “adjacent skills” that are close to the new capabilities your organization needs. Reskilling provides a learning experience that enables a lateral move from one job to another. 

Companies estimate that, in 2024, approximately 40% of workers will require up to six months of reskilling. And nearly all business leaders, 94%, expect employees to pick up new skills on the job. 

As GenAI begins to disrupt age-old business processes, reskilling will be imperative to retain a company’s investment in its talent base. 

3. Why upskilling is essential 

Upskilling goes further than reskilling by delivering continuous education that allows your people to advance their careers in more meaningful ways. It’s more focused on helping staff think strategically, critically and holistically, across the entire organization, while teaching them tools to help them automate day-to-day tasks. That then frees up their time to try new roles and think more about the big picture. With GenAI, employees have the opportunity to co-create entirely new ways of working and creating value for the organization. It’s a unique opportunity to truly make transformational change.  

For companies, it’s much easier to close skills gaps through upskilling than anything else. Because employees are learning how to deftly use digital tools and are getting a better understanding of the business, its changing processes, and the jobs that will be needed for the future, your people can take a much more active role in driving innovation and transformation within your business. You’re also teaching employees how to learn, which means your staff will be that much better prepared for an accelerated pace of change.  

Understand the skills you need 

Before you can start upskilling, you should understand what skills your workers already have compared with the skills they’ll need in the future.  

Here’s a five-step plan for identifying skills gaps and mismatches to help you assess current and future business needs: 

Step 1: Forecast 

Before you can figure out the skills you’ll need in the future, you need to do some forecasting. Gather data — from your business, industry, customers and other sources — to determine the many forces that could impact your organization in the years ahead. While every industry’s needs will be different, GenAI is one area that will likely impact everyone.  

Step 2: Assess your workforce capabilities  

Know what kinds of skills your team has today. This can be challenging, since many employees aren’t fond of taking skills assessments without a clear understanding of what they’ll gain. You may need a technological solution that can measure your company’s current skill sets and help you identify the gaps. 

Step 3: Understand your organization’s culture  

People are at the heart of every company, which means you have to get them on board with any upskilling initiative. To do that, you should understand the cultural behaviors within your business and then use them to help drive the changes you want. In turn, your transformation can happen with less effort, time and expense.

Our 26th Annual Global CEO Survey found that 69% of leaders planned to invest in technologies such as AI this year. Yet our 2023 Global Workforce Hopes and Fears Survey of nearly 54,000 workers in 46 countries and territories highlights that many employees are either uncertain or unaware of these technologies’ potential impact on them. For example, few workers (less than 30% of the workforce) believe that AI will create new job or skills development opportunities for them.

This gap, as well as numerous studies that have shown that workers are more likely to adopt what they co-create, highlights the need to put people at the core of a generative AI strategy.  

Step 4: Identify skill gaps, mismatches and your current pool of skills   

One of the challenges with understanding skills gaps and emerging competencies is that the methods companies use to assess their workforce are often manual, fragmented or piecemeal. Instead, use a data-driven solution that can analyze your skill gaps in a consistent way across your business. This can help you deliver a more realistic snapshot of your workforce skills profile. Bonus? You may find you have workers with skills relevant to an open role. 

Step 5: Verify the case for change 

Now you need to develop a plan and make sure it gets results. This requires the ability to combine company labor data with workforce profiles and online professional network information. Running all of this data through models will allow you to identify potential gaps relative to industry trends. You can then run scenario analyses, develop workforce plans and estimate returns on the investments you make. 

Generate results  

PwC has long believed in upskilling, which, for us, involves citizen-led innovation. We continue to upskill our entire global network and develop and share technologies to better support our clients. Our employees are increasing their digital acumen as work changes and applying their new knowledge and skills right away. With leadership guidance in place, employees are free to take the lead on innovating, building and testing solutions. They want to share what they’ve created, and that enthusiasm gets other people excited, too. 

PwC staff have so far used their newfound skills to build over 6,400 automations, visualizations and bots. Our employees have downloaded these digital assets more than 5 million times and have automated more than 6.5 million hours of work. While these kinds of results speak for themselves, 82% of CEOs haven’t invested in upskilling programs yet. 

Revolutionize your approach to talent development 

When you consider whether you will need to upskill, reskill or hire, the answer may also be “all of the above.” Upskilling could lead to the net creation of 5.3 million new jobs by 2030, according to the Upskilling for Shared Prosperity report from the WEF. Over that time, human labor is expected to be increasingly complemented by new technology, rather than replaced by it. The number of jobs that require creativity, innovation and empathy will likely rise, as will the need for information technology skills. 

Upskilling could lead to the net creation of 5.3 million new jobs by 2030. 

- Upskilling for Shared Prosperity report 

No organization can make itself entirely future-proof, but by improving your talent acquisition processes and creating a culture of ongoing learning, you can prepare your employees — and your business — for the workplace of tomorrow. To do this, you need a platform that can help you quickly identify skill gaps and find upskilling and reskilling opportunities. The right solution can help you fill those gaps faster and more cost-effectively than hiring ever could. 

Invest in Tomorrow 

Accelerate your employees’ learning and help drive scalable impact for your business with ProEdge, a PwC product — an intuitive, AI-powered learning platform that leverages hands-on experience and aggregated content to prepare your learners for real business challenges. 

Learn more: 

* Note: An adapted version of this article was published with Protocol here. 

Take the first step on a new path toward transforming both your organization and the learning experience of your employees.

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