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Disrupting Hiring: Is Reskilling the Solution?

In a tight labor market coupled with a growing skills gap, how do you find the right talent to meet the ever-evolving needs of your business? According to the Wall Street Journal, the solution to your hiring problems may be right under your nose… and you won’t have to spend a dime on recruiting efforts. Enter reskilling- which teaches existing employees new skills to fill positions that require technical and creative expertise. From Amazon to JPMorgan, more organizations are focusing on retaining employees and adapting current roles to integrate more data and automation.  However, the concept of reskilling doesn’t come without its fair share of challenges. Here are the pros and cons to adopting this alternative to hiring:

Pro: It saves money on recruiting

The average cost-per-hire for companies is $4,129, according to SHRM. It’s no question that hiring new talent for your team can be tricky (and expensive), especially in a market where technical skills like cybersecurity and cloud computing are in high demand with short supply. So, why spend all that money and effort searching for new people when employers can simply retrain their current ones? Well, it may not be all that simple.

Con: It can cost you in other ways

Despite the dollars saved on recruiting efforts, reskilling can drum up costs in other areas. Migrating employees into new positions through reskilling them takes time, and employers seem reluctant to invest in training and development initiatives. While nearly half of employers say the skills gap is a major concern, only 3% will significantly increase their training budgets over the next few years, according to the WSJ.

Pro: It helps prevent layoffs

As machines increasingly replace tasks performed by people, layoffs tend to follow. Yet employers are simultaneously hiring for more technical positions. For instance, General Motors Co. said it would cut 8,000 employees last fall, while hiring a large volume of people to focus on its tech initiatives like autonomous and electric vehicles. And Verizon granted buyouts to 10,000 people in 2018, while adding data scientists and marketers to develop its 5G technology.

How can employers can avoid making these layoffs? You guessed it- reskilling workers and restructuring the way they train. For example, Amazon is offering a path for employees to work their way from the warehouse to data centers, doubling their pay along the way through a 16-week certification program. Upskilling initiatives like this can help employees take control of their own futures and prevent their skillsets from becoming obsolete.

Con: It takes time

Investing in new technology, new people and the same familiar ways of hiring can often be easier for employers to grasp. On the other hand, restructuring training initiatives and business models to encompass reskilling can be a daunting task. It takes effort to implement large changes in organizations, so the question becomes: is it worth it?

As technology continues to grow at an exponential rate in today’s tight labor market, agility and the ability to adapt matters. But it’s essential to consider what’s best for the unique needs of your organization when evaluating if reskilling is right for your business.

Going the new-talent route? We can help with your hiring needs! Click here to contact us.

For more information on reskilling, click here for the Wall Street Journal’s “Why Companies are Failing at Reskilling.”