As companies innovate and adopt green solutions, reskilling employees becomes a top priority

• Digital transformation and efforts to replace polluting technologies require workers to learn new skills or be left behind.
• 79% of CEOs regularly worry about their workforce's existing skills. Reskilling costs are often baked into business cases for specific projects.

As digitization sweeps across all industries and green commitments mean phasing out of polluting technologies, companies face a two-pronged challenge: Finding workers with the necessary digital skills is increasingly difficult, and existing workers face the risk of being left behind.

As a result, companies are turning to upskilling and reskilling their workforces to remain competitive, and develop cultures that protect the futures of both the company and its current employees.

Consider Bosch, the multinational engineering and technology company. Bosch has pledged to spend €1bn over the next five years to reskill employees in growing technology areas, like artificial intelligence, "industry 4.0," and the electrification of automobiles.

This is a continuation of the company's "Mission to Move" program, which was started in 2018. Some 500 employees have gone through the program, where training can last from several weeks to a year. Thousands more are expected to take part over the next year.

"The idea is to take associates who grew up in, say, the internal combustion engine and transfer them to electrification," says Mario Luecke, director of human resources, Powertrain Solutions for Bosch in North America.

Such moves are a nod to market forces, given the demand for sustainable transportation in both the US and Europe. But this also reflects the realization that companies need to continually invest in their workers' digital skills to compete in a dynamic world where rapid change is the new normal.

Business strategy and the cost of reskilling

"Upskilling is an incredibly important part of any business strategy," said Bhushan Sethi, joint global leader, people & organization for PwC. "Upskilling shouldn't be an afterthought. It should be embedded in how you think about how you innovate products, grow customer revenue, and improve financial performance."

In a recent study, PwC found that 79% of CEOs regularly worry about their workforce's existing skills and their ability to meet dynamic workplace needs. A skilled workforce is key to a resilient and inclusive workforce that can foster innovation.

There is also a huge social compact around upskilling and reskilling. "I spoke to the head of HR at a large consumer products company and she said it was her duty to improve the future employability of her people," Sethi said. "She said companies should celebrate when people leave because it was a social responsibility to build new skills that enable employees to find the most rewarding work."

Over the past 18 months, Sethi said there has been a Renaissance in how leaders and managers engage employees in everything from mental health to their satisfaction with their work. As employees begin to return to offices, companies are rethinking processes and how technology can eliminate mundane tasks.

Reskilling is an inevitable part of the equation as companies seek to promote inclusive and sustainable economic growth, provide productive employment, and fulfilling work. Digital transformation has been a boon to reskilling, as well.

Indeed, PwC has made significant reskilling investments itself because of digitization. Two years ago, PwC implemented a "no regrets" training program where all 55,000 employees in the United States were trained in basic digital skills. The cost was not attributed to any particular project. The consultancy believes that more skilled employees are able to be more productive and provide higher-level services for clients.

In many cases, companies are building reskilling costs into the business case for specific projects. "We've seen high degrees of variability in how reskilling has actually been included as a line item," Sethi says. "There are also tax credits available for some forms of training."

Bosch, which sees reskilling and upskilling as an ongoing strategic business expense, uses a number of measures to assess the success of these efforts. This includes employee feedback about their satisfaction with the training itself. Performance reviews determine how successfully employees apply the training to their jobs.

The company also evaluates how the reskilling and upskilling efforts help meet the goal of its talent sustainability strategy. "In simple terms, this means the contribution that reskilling and upskilling makes to ensure the company has the right level of talent in place," Luecke says.

At Bosch, each region handles training differently. Germany uses external providers and universities, structuring the program in a similar manner to the country's educational system. The US, in contrast, emphasizes shorter modules and more flexibility in learning.

"One thing we learned is the timing is very important," Luecke said. "The training cannot be too theoretical, and it can't be applied too early in employees' careers. People need a chance to apply the new skills they develop right away."