In the dynamically changing world of work, companies are increasingly faced with the need to adapt their employees' skills to new business realities. Reskilling – retraining employees to match their competencies to new organisational requirements – is a key tool supporting this process.

In this article, we will explain:

What is reskilling?

Reskilling is the process of retraining employees to enable them to take on new roles within the organisation. It does not just mean upskilling (this type of competency development is upskilling), but rather acquiring entirely new skills that allow them to perform duties different from their previous ones.

Although it seems like a new approach, it is actually part of employee development management that considers potential changes in the business environment.

Reskilling is becoming an increasingly popular solution for companies that want to retain valuable employees and adapt to changing market conditions.

Which competencies and skills can be subject to reskilling?

The scope of employee competencies developed through reskilling depends on the industry's specifics and the organisation's needs. Most often, it includes:

Technical skills – e.g. programming, data analysis, operating new IT systems.
Digital competencies – including CRM system management, marketing automation, or data analysis.
Soft skills – such as team management, interpersonal communication, or negotiation.
Modern management methods – including agile work methods (Agile, Scrum) and strategic thinking.

What benefits does reskilling bring to an organisation?

Retraining employees is an investment that brings a number of benefits to the organisation:

Reduced recruitment costs – instead of hiring new employees, the company can train existing ones.
Increased employee retention – skill development makes employees more likely to stay with the organisation.
Better adaptation to market changes – the organisation becomes more flexible and responds faster to changing needs.
Improved efficiency and productivity – employees who acquire new skills are more engaged and effective at work.
Employer branding – building the image of a company that invests in employee development.
Inspiring the synergistic combination of competencies, which can also bring benefits in the employee's current work.
The ability to fill skill gaps within the company with current employees.

According to a 2024 McKinsey & Company report, 84% of companies implementing upskilling and reskilling programmes noted an increase in employee productivity, and 70% of businesses reported fewer difficulties in filling new positions.

What benefits does reskilling bring to employees?

Reskilling brings benefits not only to the company but also to the employees themselves.

Benefits of creating training paths that allow employees to acquire new skills

Meeting the need for learning – the opportunity to learn something completely new, which is very important for many people,
Sense of security – an option to more easily respond to a changing business environment in the future and to be able to change department or profession, adapting to the requirements of the labour market.
Greater job stability – individuals with a broad range of competencies are more resilient to changes in the labour market.
New career paths – retraining opens the door to promotion or a change of role within the organisation.
Greater motivation and engagement – acquiring new skills increases job satisfaction.
Better remuneration – new competencies often lead to the possibility of earning a higher salary.

Diversification of employee skills – research by Katharine Anderson

According to analyses conducted by Katharine Anderson, an assistant professor at Carnegie Mellon University's economics department, the current labour market requires employees to diversify their skills. The highest salaries are earned by individuals who possess more than one key competency. In short, it's not enough to be, for example, an accountant or a Java developer to earn really well. However, if two or more skills are combined, the chances of better jobs and pay increase.

After analysing the freelance market, Anderson discovered that workers with diverse competencies fall into two categories:

Specialist employees – who possess a set of different competencies that enable them to work in several professions and who use them independently (e.g. an accountant who is also a Russian translator. During the day, they work in an accounting office, and in the evenings, they translate on a freelance basis)
Synergistic employees – who combine their existing sets of seemingly unrelated competencies, making them unique individuals in the labour market (e.g. the aforementioned accountant who, thanks to their language skills, serves entities from the Eastern market).

Employees who possess diverse competencies earn more than individuals who are simply specialised in only one area. The most is earned by those who can synergistically combine their competencies.

When should an employer decide to implement reskilling programmes?

Reskilling should be implemented in an organisation when:

Significant technological changes occur – new systems or tools are introduced for which current employees lack competencies.
There is a shortage of specialists in the labour market – recruiting new employees is costly and time-consuming.
Strategic changes are happening – the company changes its business profile or develops new business areas.
Employee turnover occurs – reskilling can help retain talent and minimise recruitment costs.

When should an employee consider reskilling?

Every employee should consider retraining when:

Their industry is undergoing technological changes – automation or digitalisation may render existing skills less useful.
They feel professional stagnation – a lack of promotion or development prospects can be a signal to change career direction.
They want to increase their value in the labour market – possessing new competencies increases attractiveness in the eyes of employers.

How to implement a reskilling programme in a company?

Implementing an effective reskilling programme step by step:

Organisational needs analysis – identify the competencies that will be crucial for your company in the future.
Assessment of current employee competencies – check for skill gaps, diagnose existing employee skills, and select individuals who can be retrained. Actively encourage employees to acquire new skills and remember that not everyone feels the need to learn.
Development of a training plan – choose appropriate learning methods (including training, e-learning, mentoring, lifelong learning, access to specialised knowledge). Check what employee development tools you have available.
Programme implementation – implement activities and monitor progress.
Effectiveness evaluation – measure the effects of reskilling through business and HR metrics.

Companies that enable their employees to reskill should remember that it's not enough to help employees acquire new skills; they must also be utilised afterwards. Otherwise, the employee will forget what they learned, and their new abilities will atrophy.

How to implement reskilling with tomHR – automating employee competency development

Creating training paths and managing employee development as part of reskilling does not have to be difficult.

From the educational resources perspective, you can use online courses, internal trainers, or even employees who would like to develop coaching competencies.

A training management software for HR departments will also help you, allowing you to create entire upskilling and reskilling strategies based on training paths dedicated to selected groups of employees. This way, you can develop soft skills, hard skills, and entire certification processes.

Thanks to the automation of many processes, managing the process of improving your employees' skills and competencies is very simple. Try our tool during a 30-day free trial.

Summary

Reskilling and upskilling in a company are strategies that allow organisations to effectively adapt to the changing labour market. Through retraining programmes, employee retention can be increased, productivity improved, and costly recruitments avoided.

Both organisations and employees should consciously make decisions about reskilling to adapt to future company needs and future requirements. Reskilling allows employees and the company to gain a competitive advantage in the labour market and in a changing business environment.

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