There’s a disconnect when it comes to employee skill development and education. Employees want more opportunities to upskill professionally, both of their own accord and to keep up with changing industry demands, but they often lack the resources to do so.
At the same time, employers have an increasing need for more skilled workforces, especially in industries with new, emerging, or in-demand skills. They’re struggling to acquire new employees that fit these needs and are often facing significant retention challenges across their workforce.
These mounting challenges affect employees and organizations across all industries and have resulted in a disconnect surrounding who’s expected to bear responsibility for developing career paths, as well as supporting and financing an employee’s continued education and training. Who owns this - employers or employees?
Employees want & need upskilling opportunities
As found in the latest EdAssist Education Index, one of the top reasons employees leave their jobs is an inability to learn and grow from their employer. They want learning, training, and upskilling opportunities, but many don’t feel that those opportunities are available to them today.
Many employees are entering the workforce “early,” skipping over traditional education paths. In fact, 48% of employees want to first enter the workforce and then pursue employee-sponsored education – “earn as they learn”.
A study from SHRM found that over half of surveyed workers said they needed to learn new skills within a year to continue their careers, but nearly one-third (29%) said they didn’t feel optimistic about opportunities for training or skill development. The study also found that 49% of survey participants said they wanted to develop their skills, but didn’t know where to start, and that 66% of employers feel the same way.
As the demand for new skills increases, this problem is only likely to continue. Another SHRM study found that 40% of employee respondents worried their skills would be outdated because of automation, and that 41% of employees worried about potential job loss. These concerns were most prevalent among Gen Z and Millennials, and were greater amongst Black Americans, Latin Americans, and Asian Americans.
The challenges employees face for upskilling
There are some clear challenges that many employees face with upskilling, including:
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Unsure where to start. While employees want to pursue education and skill development that could advance their careers, many employees aren’t sure what skills to invest in or which education paths would be most beneficial.
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Lack of resources. When employees are expected to handle upskilling on their own, many won’t have the opportunity due to the time commitments and resources required. Professionals working full-time jobs may not have the availability or option to take time off for tests, training, or studying.
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Financial strain. Financial hardship is often the most significant barrier preventing employees from upskilling on their own dime. Research shows that 59% of participants said student loan debt was the reason they didn’t want to pursue additional education, and that over half of Americans believe tuition is the biggest obstacle to receiving a college education.
Despite wanting to upskill, and in some cases even feeling the need to upskill to avoid falling behind, many struggle to do so on their own given these challenges.
Employers need workers with advanced & changing skills
Employers across all industries are faced with an increasing need for more skilled workforces, needing employees with new or advanced skills.
Some industries, like healthcare, are already impacted by significant labor shortages. The Bureau of Labor Statistics Employment Projections 2022-2032 anticipates that the registered nurse (RN) workforce is expected to expand by over 6% over the next decade, resulting in a needed increase of 177,440 nurses. This is a great concern, as there’s already a nursing shortage.
Other industries are needing more workers with new advanced skills that can incorporate robotics, automation, and AI. The World Economic Forum’s 2023 Future of Job Reports estimated that 44% of workers’ skills will be disrupted due to evolving labor needs by 2028.
As many organizations face a need for new or advanced skill sets from their team, increases in employee churn rates only compound the issue. Organizations have struggled with decreasing employee retention rates, with an 11% decline in employee tenure reported over the last four years.
Businesses are struggling to retain their best talent and close critical skills gaps, which is costing them. The average cost of hiring a new employee may be as much as 3-4 times the position’s salary, and with high performers potentially being up to 400 times more productive than other team members, it’s crucial to keep top employees.
As a result, organizations are turning to employee education and development programs to do so. Investing in your own team members— who already have extensive organizational knowledge and a desire for career advancement— can be the key to retaining your top employees while facilitating the development of essential, needed skills.
Employers that implement upskilling programs can direct engaged employees towards in-demand job roles or skills with career pathways tools. This targeted approach creates employee development opportunities that benefit both employees and employers.
The responsibility and challenges of employer-facilitated upskilling
While some employees pursue upskilling on their own, many C-suite executives are realizing that everyone benefits when employers create employee education and upskilling programs. It increases accessibility and participation and is aligned with vital skills needed by the organization today and in the near future.
Employees are more likely to participate in upskilling and training when their employer provides full support, including:
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Resources that help employees know which skills to focus on, including choosing specific degrees or training programs.
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Financial support, potentially in the form of tuition assistance
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General support, especially from management if they need time off for training or to take an exam.
Studies have shown, however, that many organizations struggle to successfully implement or encourage upskilling programs and employee participation. One study identified the top reasons organizations didn’t invest in employee reskilling or upskilling as the following:
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Finding time to create a program (42% of respondents)
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Lack of employee interest (39%)
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Identifying skills gaps (38%)
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Budgeting for training and associated costs (35%)
Why companies are turning to employer-sponsored upskilling
Employers that invest in the professional development of their employees can facilitate career mobility, which is a win-win move that solves significant challenges for both employers and employees.
Employers who create systemized programs to facilitate upskilling in equitable, targeted, and trackable ways will benefit. It’s essential to know what kinds of support your company can offer, to whom, and in what capacity, assuming that all employees may be interested.
Organizations can support their employees’ professional development by creating career pathways, which are specific and trackable maps that help employees follow specific career advancement trajectories. These pathways can help employees grow into hard-to-fill positions or develop specific, in-demand skill sets with continued training and education.
The benefits of employer-sponsored upskilling
Employer-sponsored upskilling offers numerous benefits: employees gain valuable new skills that enhance their contributions to the company, and retention rates soar, with 94% of workers staying longer at companies that invest in their education.
Career advancement opportunities also increase, with participants twice as likely to be promoted. This makes it easier to attract top talent seeking growth and development.
Additionally, upskilling programs support diversity, with a 63% uplift in retention for Black and Hispanic participants, according to our EdAssist findings.
What should employee-sponsored upskilling programs involve?
Employee-sponsored upskilling programs should include the following to drive the best outcomes:
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Academic coaching to help employees choose skills to develop or education paths to follow
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Tuition assistance to cover learning/upskilling costs
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Reimbursement for educational or skills-based conferences
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Access to professional training or certificates, including hosting in-office trainings
The program policy should detail guidelines for types of upskilling that may be covered, funds available for each employee, and any required qualifications. For example, employers may require that you work at their organization for at least a year before getting tuition assistance. Others may have an annual cap for the total upskilling costs they’ll spend annually per eligible employee.
Because these programs can be time-intensive to develop and maintain, organizations are turning to education assistance providers. These providers will help create employee development programs that drive targeted outcomes, create awareness campaigns with employees, and provide career coaching to help your employees navigate upskilling opportunities more effectively.
Final Thoughts
Investing in your employees’ education is not just a wise decision—it’s a strategic move that will yield substantial returns, ensuring your organization thrives with a skilled, motivated, and loyal workforce for years to come.
You will attract and retain top talent by offering upskilling and advancement opportunities, giving employees the much-desired career advancement and stability they’re looking for. Subsequently, you will hold onto top performers, maintain productivity, and close critical skills gaps before they even emerge.
Interested in discovering how employee education assistance programs can benefit your company? Book a consultation with EdAssist today
