Should we upskill the people we have instead of hiring?

When does upskilling current employees make more sense than hiring?

Upskilling current employees makes more sense than hiring when the skills you need can be learned in a reasonable amount of time and some of your employees want to learn them. Current employees already understand how your organization works, its processes, and its customers, which a new hire has to learn from scratch. When they can see that the organization is willing to invest in them, it can also give them a path to grow, which matters to many employees. Our people have nowhere to go here. How do we build a career path? covers that side of the question.

Upskilling also depends on capacity. Someone has to cover the employee's work while they learn, and a supervisor or experienced coworker usually has to teach, answer questions, and check the work. If the team is already stretched, adding training without reducing other responsibilities can leave people overwhelmed.

Some upskilling happens best through a college, a training provider, or a credential program rather than inside the organization. We want to upskill our people through a college or training partner. How does that work? covers how those partnerships work.

When is hiring the better choice?

Hiring is the better choice when you need a skill immediately, when the role requires a license, credential, or specialized expertise that would take years to build, or when no one on your current team wants to move into the role. It can also be the better choice when the team can't cover someone's work through a long period of training. Sometimes the organization would benefit from experience gained somewhere else.

Choosing to hire doesn't mean you've given up on developing your own people. Some organizations hire for an immediate need while preparing current employees to take on similar roles in the future. The important thing is to make the decision based on what the role requires and what your employees want, so that people who are interested in growing don't conclude that the organization will always look outside first.

What does upskilling actually cost compared with hiring?

What upskilling costs compared with hiring depends on the role, but both options have costs that are easy to overlook. Upskilling includes the cost of training itself, the employee's time away from their regular work, the cost of covering that work, the time supervisors and coworkers spend teaching, and a period of lower productivity while the employee learns. If the new skills make the employee more valuable, it's also reasonable to expect a change in pay.

Hiring includes recruiting, interviewing, onboarding, and the weeks or months before a new employee is fully productive, plus the risk that the hire doesn't work out. Published estimates of what it costs to replace an employee vary widely. One review by the Center for American Progress found a typical cost of about 21 percent of an employee's annual salary for most jobs, and more for senior or highly specialized roles. Your own records will tell you more than a published figure. What is turnover actually costing us? covers how to estimate those costs for your organization.

Put the two side by side for the specific role, count the same kinds of costs for each, and note which figures are estimates.

How will we know whether upskilling worked?

You'll know whether upskilling worked by deciding beforehand what should be different and checking afterward whether it is. That might mean the employee is using the new skills on the job, the role is filled from within, the work is getting done at the expected quality, or the employees you trained are still with you a year later. Whether employees liked the training is worth knowing, but it doesn't tell you whether it improved what you were trying to improve.

Write down what you expect before the training begins, give it enough time to make a difference, and then look again. If it didn't help, or helped some employees and not others, that's useful information for the next decision. How do I know if our training is worth what we spend on it? covers how to judge a training program, and How do we know whether the change we made actually helped? covers checking a change more generally.