Hiring new talent is expensive. Between recruiting fees, job ads, and onboarding expenses, the costs of a new team contributor can add up quickly.
Typically, the cost of a single new hire will average $7,400 (SHRM) — though it can reach $20,000 for some positions (Indeed). These expenses can include not only direct costs, but also indirect costs such as the time, effort, and resources from HR, talent acquisition (TA), and management.
Productivity lag is an often-overlooked aspect of hiring new employees. When a new team member joins, they typically require a period of adjustment before they can contribute fully to their role. This adjustment period, also known as a productivity lag, can significantly impact team performance and overall business efficiency.
Given the expensive, time-sucking effects of hiring a new employee, companies are instead exploring options for retaining existing talent. One such option, upskilling, means teaching current employees new skills, or advancing their existing skills, in ways that make them even more valuable in their current roles.
That’s why here at QuickStart, we are helping employers make this process a simple one. We help elevate employee performance behind continuous coaching and upskilling strategies, a workforce initiative that turns every IT employee into your best IT employee.
Cost-Effective Strategy: Upskilling
High-performing companies are always looking for ways to optimize their workforce while lowering overall costs. Upskilling can be a highly effective strategy in that regard, as enhancing current skillsets be a cost-effective alternative to hiring new talent.
Upskilling within technical roles, for example, typically costs $5,000 per employee — a much more reasonable cost than choosing to replace that employee with an entirely new contributor (Technical.ly). This process also helps prevent any disruptions for your overall workforce, particularly during the weeks, or months, between the exit of one contributor and the full onboarding of another.
Benefits of Upskilling
Investing in upskilling programs offers several core advantages that go beyond cost savings. By enhancing the skills of your current workforce, you can foster a more dynamic, efficient, and motivated team.
Here are a few specific advantages to upskilling your workforce:
- Company cost savings: By investing in the development of existing employees, organizations can avoid the high expenses associated with hiring and training new talent. These costs include recruiting fees, onboarding costs, and the indirect costs of going without an essential internal contributor.
- Improved employee retention: Replacing a single employee can cost as much as 33% of their salary (Forbes). This means that replacing an employee making $120,000 per year can cost an organization as much as $40,000. Upskilling can help increase employee satisfaction and loyalty, reducing required hiring frequency and, of course, hiring costs.
- Retained institutional knowledge: Existing employees have a better understanding of a company’s internal processes and mission. By upskilling your current workforce, you avoid disruptions in employees’ understanding of corporate culture. You also leverage the existing expertise of your workforce to make the same processes even more efficient.
Beyond these benefits, organizations that upskill their employees also enjoy a sustained brand reputation — particularly among talent circles that prioritize companies focused on their employees.
Balanced Approach: Upskilling and Strategic Skills-Based Hiring
While upskilling provides numerous benefits, it is not a one-size-fits-all solution. A balanced approach that combines upskilling existing employees with strategic skills-based hiring can offer the best of both worlds. This approach ensures that your organization remains agile, innovative, and well-equipped to meet evolving business challenges.
While upskilling is valuable, there are scenarios where hiring new talent is essential. Strategic skills-based hiring focuses on recruiting individuals with specific skills or new perspectives that are not readily available within the existing workforce.
Onboarding new talent can help your organization:
- Acquire specialized skills: Some roles require specialized expertise that current employees may not possess.
- Infuse new perspectives: New hires can introduce fresh ideas and approaches, fostering innovation and creativity within the team.
- Maintain a competitive edge: In fast-paced industries, staying ahead often requires acquiring top talent with cutting-edge skills.
- Scale Operations: When expanding operations or entering new markets, hiring new talent with relevant experience and skills can accelerate growth.
Skills-Based Hiring
Skills-based hiring is transforming the recruitment landscape by shifting the focus from traditional qualifications to the actual skills and competencies required for the job. This approach emphasizes hiring candidates based on their ability to perform specific tasks and their potential to grow within the role, rather than solely on their educational background or previous job titles.
A skills-based hiring approach to talent focuses on a few, critical outcomes:
- Assess real-world potential: Beyond current skills, this approach evaluates a candidate's potential for growth and their ability to learn and adapt. This is particularly important in fast-evolving industries where continuous learning is critical.
- Focus on competencies: Skills-based hiring prioritizes the specific skills and competencies needed for the role. This involves a detailed analysis of the job requirements and identifying the key skills essential for success.
- Onboard a diverse talent pool: By reducing the emphasis on traditional qualifications, skills-based hiring opens up opportunities for a more diverse range of candidates. This can include individuals from non-traditional educational backgrounds, career changers, and those with varied experiences.
Skills-based hiring is not just about finding the right talent; it's also a strategic approach to optimizing cost efficiency and enhancing organizational performance. This precision reduces the time and resources spent on screening and interviewing unqualified candidates.
Measuring ROI from Upskilling
Investing in upskilling programs is about enhancing employee skills and helping generate a positive return on investment (ROI) for your organization. To accurately measure your ROI from upskilling, it's important to regularly track key metrics and refine programs to align with internal goals.
A few of the important metrics to track are employee retention rate, project completion rate, output per employee, training costs, and training participation.
Upskill Your Employees with the Latest Tech Skills Today
Upskilling your workforce isn't just a financial investment for your organization; it's also an investment in the individuals who make your organization a success as it enhances operation efficiency and deepens the experience of each valued member of your team.
The effects of an effectively upskilled team are immediate and lasting: higher performance, fewer errors, and a more thorough understanding of the skills, and technologies, that define your industry.
When those skills and platforms include the latest in technology advancements, consider upskilling your team through QuickStart Launch. We help provide your workforce with the right combination of skills and hands-on experience they need for success.
Connect with us today to start upskilling your team today.