What is Reskilling and Why is it Important?

As technology such as artificial intelligence and in-demand skills continue to rapidly evolve, it’s more important than ever before for organizations to have the roles and skills they need to achieve business goals. However, according to research from LinkedIn, nearly half (49%) of learning and talent development professionals see a skills crisis and are concerned that employees do not have the right skills to execute business strategy. 

One way for organizations to ensure employees have the latest skills to support business growth is by taking a proactive, strategic approach to reskilling. Learn more about what reskilling is, why it’s important, and best practices for implementation at your organization. 

What is Reskilling?

Reskilling is the process of employees or job seekers learning new skills to prepare for a different job, function, or industry. Companies and individuals typically embrace reskilling to adapt to shifting business needs, emerging technology, or new in-demand skills.

The terms reskilling and upskilling are often used interchangeably. However, understanding the difference between the two is important. While reskilling involves learning new skills to prepare for a different role or career pathway, upskilling focuses on enhancing existing skills or learning new ones to improve in their current position or advance in the same industry. 

An effective reskilling strategy typically includes the following components:

• Skills Inventory: Having a comprehensive understanding which skills current employees possess and any existing or emerging skills gaps across the organization

• Skills Assessments: Evaluating individual employees to understand their current competencies and recognize areas for improvement or development current against emerging requirements to identify specific development needs

• Training Programs: Extending access to reskilling resources, such as online learning platforms, professional development events, and knowledge sharing sessions to build new skills

• On-the-Job Application: Offering opportunities for employees to apply new and developing skills through experiential learning, job shadowing, cross-team collaboration projects, and stretch assignments 

• Transition Support: Assistance applying new skills and navigating new role expectations, along with performance requirements

• Continual Development: Taking an ongoing approach to reskilling to align with business needs as in-demand skills continue to evolve

Why is Reskilling Important?

According to recent Lightcast research, 32% of the skills required for the average job were different in 2024 than they were in 2021. Skills needs are expected to continue to shift for organizations across industries. In fact, a report published by the World Economic Forum shows that employers expect 39% of the skills required in the job market to transform or become outdated by 2030. 

Additionally, research from DeVry University found that of 75% workers and 77% of employers think everyone needs upskilling or reskilling to keep up with the pace of technology, including AI. If the goal is long-term business relevance and success, prioritizing reskilling is no longer an option, but a necessity. 

Specific benefits of reskilling include: 

• Ability to quickly fill skills gaps

• Improved workforce and organizational agility

• Gaining a competitive advantage over organizations behind on reskilling

• Strengthened employee engagement and retention

• Reduced recruitment costs and onboarding costs by training existing employees rather than hiring external talent 

• Improved employer branding by promoting reskilling initiatives in recruitment and talent acquisition strategies 

• More proactive workforce planning 

Top Reskilling Challenges

Despite its strategic importance, implementing effective reskilling and related career development initiatives present several obstacles for organizations. The LinkedIn research cited above found that 31% of organizations surveyed have career development programs with limited adoption, while 33% have no initiatives or are just getting started.

Common challenges with reskilling include: 

• Effectively identifying and prioritizing future skill needs 

• Leadership and stakeholder buy-in

• Employee resistance to change or taking on new roles

• Resource or budget limitations for reskilling and talent development 

• Implementing successful reskilling programs

• Lack of career transition support

• Measuring the effectiveness of reskilling 

Best Practices for Effective Reskilling

Leading organizations have developed several effective approaches to workforce reskilling.

Align Reskilling with Business Strategy

Successful reskilling aligns with clear strategic business objectives, rather than approaching learning and development as siloed HR initiatives or team-focused programs. This approach requires: 

• Identifying specific strategic capabilities required for future success

• Mapping current workforce skills against these requirements

• Prioritizing development investments based on business impact

• Ensuring reskilling and talent development buy-in from senior leadership and stakeholders 

Embrace Labor Market and Skills Data

Taking a data-driven approach to developing and implementing reskilling programs at your organization can help ensure your reskilling strategy prioritizes the latest skills and directs employees toward in-demand, relevant roles.

Ways to embrace labor market and skills data include: 

• Regularly reviewing comprehensive labor market data to identify emerging skill trends and predict future requirements

• Tracking industry-specific technology adoption rates to anticipate in-demand skill shifts

• Refreshing internal skill inventories to identify critical gaps and development opportunities

• Analyzing job transition and internal mobility data to identify relevant career paths for employees

Identify Clear Career Pathways

For reskilling to be successful, employees need to understand which opportunities are available to them as they develop new skills. By using the latest labor market data as recommended above, you can identify clear career pathways for employees to transition to new roles internally. 

A career pathway is a roadmap that uses skills data to enable employers to find talent, develop their existing workforce, and connect employees with the right jobs. In addition to linear career paths, such as a sales representative being promoted into a sales manager role, career pathways also take a comprehensive view of the job market to determine adjacent or overlapping skills across industries and occupations. 

For example, a customer service representative may possess strong interpersonal skills, which would make for a natural transition into a role as an HR specialist. The organization would be able to support this change by providing reskilling resources that would teach applicant tracking systems, benefits administration, or other skills specific to human resources.

Support Personalized Learning Journeys

Because every employee learns differently, offering a one-size-fits-all approach likely won’t work. Instead, offer employees at your organization access to different types of learning resources so they can learn in the way that works best for them. 

Examples of reskilling resources you can offer employees include: 

• Access to online learning platforms and courses 

• Individual development plans

• Tailored performance reviews

• Skill assessments

• Stretch assignments 

• Experiential learning

• Mentorship opportunities

• Stipends for professional development events and courses

• Cross-team knowledge sharing sessions 

Case Study: How an Enterprise Food and Beverage Company Improved its Learning and Development Program with Skills Data

A European food and beverage company with more than 10,000 employees was looking to improve its training and development program across the organization. The goal of this effort was to ensure employee training focused on the most market-relevant and impactful skills. 

The company partnered with Lightcast to conduct a skills audit of their entire job architecture, which provided a dataset that accurately reflected the latest in-demand skills in the labor market. 

Lightcast’s approach for this food and beverage company included auditing their job roles architecture of more than 1,000 roles, aligning the roles with Lightcast’s comprehensive, up-to-date jobs and skills taxonomies, and exporting the completed skills mapping to the company’s human resources information system (HRIS). 

As a result of the company’s partnership with Lightcast, they now have a complete, regularly updated skills inventory for their workforce integrated into their HRIS. This enables them to continually track existing skills, identify skills gaps, and effectively upskill and reskill their workforce.

Reskill Your Workforce with Lightcast 

Reskilling will continue to be important for organizations across industries in the years to come. Organizations that don’t prioritize reskilling their employees risk falling behind the competition as skills needs, technological advancements, and business priorities continue to evolve. 

Lightcast can help you proactively and strategically reskill your workforce. Lightcast Skills Taxonomy is a user-friendly library of more than 32,000 skills developed by expert economists and labor market analysts. Comprehensive data from the Lightcast Open Skills Library can help you take an inventory of skills at your organization, identify tailored reskilling opportunities, create career pathways that align with relevant, in-demand roles, and implement more effective strategic workforce planning.  

Learn more about how Lightcast’s comprehensive labor market data and solutions can help you take a skills-based approach to build a more agile organization—get in touch with a member of our team directly.