What Is Upskilling, and Why Is It Good for Companies?

Employees attending a training seminar.

Change and innovation are a normal part of any business’s operations. Whether this comes in the form of adopting a revolutionary piece of technology or making a slight but essential alteration to a longstanding process, it can impact how an employee does their job, and also how their career grows. Those who are able to quickly adapt their skills to accommodate changes can position themselves for short- and long-term professional growth.

What Does Upskilling Mean?

Upskilling is the process by which workers build on their existing skills through development opportunities and training programs. But what upskilling means to an employee can differ slightly from what it means to an employer.

For employees, upskilling means developing greater proficiency in one or more specific areas related to their job, increasing their value to their employers and their opportunities for advancement. For example, a computer programmer who gains proficiency in a new and emerging programming language could play a more prominent role in their company’s information technology department.

For employers, upskilling provides a way to internally close skill or talent gaps within the company — a process that can save time and money. It can also build staff retention and loyalty and increase employees’ job satisfaction. Happy employees are productive employees, and their new skills can be immediately used for the employer’s benefit. Helping employees achieve success by earning certifications increases productivity as well as delivers a strong return on investment.

Upskilling typically occurs when an employer assists, wholly or partially, an employee in earning post-secondary credentials. These can be skill-based certificates, industry-awarded certifications, degrees or any credentials relevant to their job. While the previous pattern has been to train and assist employees from middle -management onward, upskilling is designed for employees in entry-level positions to help them advance to higher-level, more lucrative roles.

Upskilling is sometimes grouped with the similar process of reskilling. However, it’s important for employees and employers to understand the difference between what upskilling is vs. what reskilling is. While upskilling builds upon an existing skill set, reskilling focuses on learning new skills that may be needed to do a different job.

Why Are Upskilling and Reskilling Important?

Upskilling and reskilling are particularly important as companies work to close their talent gap, which was exacerbated by the COVID-19 pandemic. The pandemic led to a number of changes in how businesses operate, including increased remote and digitized work and a shift in the most in-demand skills, which now include adaptability, empathy and leadership, according to McKinsey & Company.

By investing in upskilling programs for employees, employers can close their company’s gaps in these and other skills without hiring new talent. Current employees have already built up relationships and loyalty, intangible factors that are critical to productivity.

The pandemic also led to a number of employees being laid off or furloughed. Reskilling helps these employees pivot toward different career paths, finding new fields that ideally can be more rewarding.

Another key component of upskilling is improved technical competence. Employees trained in emerging technologies as they develop can help their companies embrace innovation.

Upskilling and reskilling often lead to employees earning certifications and other postsecondary credentials that can be particularly important for employees’ careers. Higher education can help employees earn higher salaries, and can open the door to new opportunities.

Upskilling Examples

Companies have provided many examples of upskilling through a variety of initiatives for employees. Target, for instance, offers its employees the opportunity to enroll in employer-funded programs to earn a college degree or certification. Other companies use upskilling to address issues of equity. Accenture, for example, offers upskilling plans geared specifically toward women in order to build better gender parity. Another form of upskilling involves programs aimed at adapting to technological innovations. PricewaterhouseCoopers (PwC) created the New World, New Skills Initiative to help employees strengthen their technology skills to bridge digital divides.

Help Build Stronger Organizations

Upskilling and reskilling are increasingly critical components of many companies’ long-term success. By improving their existing skills or learning new ones, employees can help drive their own careers — and benefit the companies they work for.

At the same time, taking the first step toward upskilling can be intimidating. For those interested in helping others take control of their careers,  USC's online Master of Science in Applied Psychology (MAPP) degree program can give students a competitive advantage in talent management and organizational development. The program blends the principles of organizational and consumer psychology to teach students how human behavior informs business. Find out how USC can help you guide individuals and companies to success.


Recommended Readings

Change and Organizational Adaptability: Three Challenges

The Importance of Job Satisfaction in Today’s Workforce

Using Psychology Tools to Hire the Best Employees



Accenture, Making Work, Work for Women

Forbes, “Why Employee Upskilling and Reskilling Is So Important Right Now”

Indeed, “Upskilling and Going Back to School: When, How and Why You Should”

Indeed, “Upskilling and Reskilling: Importance and Differences”

LinkedIn, “The Importance of Upskilling in Challenging Times”

McKinsey & Company, “Building Workforce Skills at Scale to Thrive During — and After — the COVID-19 Crisis”

McKinsey & Company, “Piecing Together the Talent Puzzle: When to Redeploy, Upskill, or Reskill”

PricewaterhouseCooper, New World. New Skills.

Target, “Offering Debt-Free Degrees to More Than 340,000 Target Team Members? Now That’s a Smart Move”