Upskilling and Reskilling: Preparing The Workforce for 2024

By Heather Moyer, March 21st, 2024

Surveys show nearly half of workers are worried automation will make them obsolete, though they also saw the potential benefits. Those fears aren’t entirely unwarranted. The labor market is in the middle of a massive shift, not only in the way people work but also in what their daily work entails. After ramping up on automation and other technologies to support hybrid and remote work, employees are now investigating how generative AI in the workplace looks.

In its 2023 “Generative AI and the Future of Work in America” report, McKinsey estimates “that 11.8 million workers currently in occupations with shrinking demand may need to move into different lines of work by 2030.”

But despite the need for new skills, maybe even entirely new roles, companies continue to find their budgets are tight, making it necessary to look inside their current workforces for those new skills. In the current economic climate, “employers must make the most of the skills their current employees possess by providing opportunities for upskilling and reskilling.”

What Is Upskilling?

When an employee takes on upskilling, they are seeking to expand their existing skill set to enhance their current performance while also potentially offering advancement opportunities.

Generative AI’s capabilities combined with its wide accessibility are what make it so impactful. It presents a key opportunity, according to the Deloitte AI Institute

“If humans can use Generative AI to complete tasks faster, easier, or better than they could before because the technology has certain skills, then we can start to assign tasks differently. This is a key to success—technology is not directly replacing jobs; rather it’s changing.”

To keep up, companies will have to be focused on future-proofing their businesses by being agile, adapting quickly and effectively to inevitable changes. They will have to provide their employees with opportunities to learn those new skills and even shift their jobs, empowering them to keep on the cutting edge of their fields. In turn, that means the ability for workers to try new types of work, increase their earning potential, and stay competitive in the labor market.

Companies can offer internal opportunities through development and mentoring programs or reimbursement and capacity to seek external opportunities like certifications and courses. These demonstrate a commitment to employee growth and career advancement, which also enhance engagement and retention.

What Is Reskilling and How Is It Different From Upskilling?

On a broad scale, both upskilling and upskilling help to address what the World Economic Forum calls a “growing skills-gap crisis,” where 44% of workers’ skills are expected to be disrupted in the next 5 years. Furthermore, “6 in 10 workers will require training before 2027.”

While upskilling helps address this gap, sometimes entirely new skills are required to meet changing demands. This is where reskilling comes in. 

Rather than replacing an employee with someone new who has a different skill set, giving that current employee the chance to learn those skills is reskilling. Though this is often a lateral move where they step into a new role without the experience, it enables them to pursue an entirely new career path—maybe a more viable one in the future—while gaining new in-demand experience and knowledge.

Between 2019 and 2022, 8.6 million workers did just this by shifting occupations, with another 12 million expected by 2030. This could be seen as jobs becoming obsolete, but it also means many new jobs will become available.

How AI Is Influencing Upskilling and Reskilling

AI’s impact on “the great skills shift” is a combination of eliminating and boosting work: “prepare for a Generative AI future—readying their workforce for automation, strategizing for augmentation, appreciating human-centric skills, and even pioneering new roles.”

In an MIT study examining ChatGPT’s effect on productivity, workers recognized not only the ability to save time but also to improve quality of their output. Productivity improved by 37% and helped lower-skilled workers to increase the quality of their work.

New technologies like Generative AI are paving the way for expansion in key industries based on increased demand and investment, and the skills required for those jobs are largely new. “ “A third of the essential skills in 2025 will consist of technology competencies not yet regarded as crucial to today’s job requirements.”

Demand for workers to support the increasing infrastructure and IT needs to support technologies like 5G and smart cities is projected to grow rapidly, and talent will need to adapt and grow to keep up. In fact, the IT staffing market is expected to reach $583.11 billion by 2028 globally. The demand for electricity is expected to grow 30% by 2030, and investment in smart grid devices or systems is expected to reach $6.4 million this year.

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