Reskilling Existing Talent vs. Lateral Hiring: What’s the Ideal Path?
In an ever-evolving business landscape, the question of reskilling the existing workforce versus lateral hiring has become a focal point for organizations striving to flourish in the market.
Each approach presents its own set of advantages and considerations, but which one truly stands out as the better option? Let’s delve into this debate to uncover the most effective strategy.
From the Employee Lens: Embracing Growth and Mobility
From the perspective of employees, reskilling offers a compelling avenue for personal and professional growth. It equips them with new skills that not only facilitate upward mobility within the company but also open doors to diverse career paths in the industry.
The statistics speak for themselves – a staggering 94% of employees express a desire to work for organizations that prioritize their growth by expanding their skill sets and roles within the company.
This aspiration for growth is further substantiated by the fact that employees tend to remain 2.5 times longer in companies that actively promote internal mobility.
Reskilling, as observed through the employee lens, is an investment in their future. It’s one of the most critical things on an employee’s wishlist.
It empowers them to adapt to changing job requirements and technological advancements, ensuring their continued relevance and value in the workforce.
Reskilling also instills a sense of loyalty and commitment towards the organization, as employees recognize the effort invested in their development.
From The Employer Lens: Economics and Strategic Advantage
When viewed from the employer’s perspective, the debate between reskilling and lateral hiring takes on an economic dimension. The cost comparison between the two approaches can be particularly illuminating.
For instance, while the cost of reskilling a Data Analyst into a Data Scientist stands at $136,135, the cost of hiring an external Data Scientist amounts to $145,530 in the United States.
This cost difference might seem modest at first glance, but when aggregated across multiple hires, it becomes a significant financial consideration.
The true value of reskilling becomes evident when assessing the broader impact on the organization’s workforce. The ability to transition an employee from an entry-level role to a more complex one, such as from a Data Analyst to a Data Scientist, within just three months is a remarkable feat.
This transition not only encompasses technical skills but also integrates crucial soft skills and database proficiency. As a result, organizations gain a workforce that is not only versatile but also deeply aligned with the company’s culture and values.
Hire or Reskill: It Depends!
Deciding between reskilling and lateral hiring hinges on the context of the situation. Lateral hiring is a suitable strategy when immediate fulfillment of a business requirement is paramount or when specific domain expertise is needed.
On the other hand, reskilling shines in scenarios where long-term employee retention and increased productivity are top priorities. Organizations operating within budget constraints find reskilling to be a cost-effective means of upskilling their workforce.
When the stakes are high and risks need to be minimized, reskilling provides a safer path for organizations to acquire the required skills while retaining institutional knowledge and familiarity.
Recommendations and HR Preference
In light of the cost analysis, reskilling emerges as a wise option, saving organizations around $9,395 per program compared to lateral hiring.
This financial edge, coupled with the benefits of employee loyalty and alignment, underscores the strategic value of reskilling in a dynamic business landscape.
For HR professionals, tailoring reskilling efforts to address identified skill gaps stands out as a preferred strategy. Over 42% of HR professionals favor customized reskilling to address specific skill gaps in the workforce.
Offering compensation for completing requisite courses or certifications serves as a powerful incentive for employees to actively engage in their development.
Moreover, experiential learning through rotations, short-term projects, and internal gigs enriches employees’ skill portfolios and broadens their perspectives. 39% of HR professionals are inclined towards promoting experiential learning through rotations, short-term projects, and internal gigs.
The Final Decision
In conclusion, the choice between reskilling and lateral hiring isn’t a binary one; it’s a strategic decision that hinges on a thorough understanding of the organization’s objectives, resources, and the evolving needs of the workforce.
While 1/3rd of HR prefers lateral hiring to serve immediate demands, reskilling is an investment in employees’ growth, retention, and alignment with the organization’s vision.
In this ongoing debate, reskilling emerges not only as a better option but as a transformative strategy for organizations aiming to secure a competitive advantage in today’s business landscape.