What HR Leaders Should Know About Upskilling & Reskilling

December 17, 2020 4 Minute Read

Trends in digitization, automation and artificial intelligence (AI) have raised questions about the future of work for years, but the coronavirus pandemic has brought new urgency to the need to reskill and upskill employees.

Reskilling refers to training employees on new skills to help them move into a different role, while upskilling refers to teaching them new skills to improve their ability to do their current jobs as industries evolve. Both are important to global businesses that must adapt to skills gaps created by the adoption of advanced technology in the workplace, and COVID-19 has only accelerated that necessity.

Globally, pandemic-induced layoffs have caused disruption to business efficiency and continuity. A Gartner survey of more than 750 HR leaders found that 68% of respondents reported building critical skills and competencies as their top priority in 2021. Even prior to the pandemic, 87% of executives and managers said their organizations were already experiencing skills gaps or expected them to occur within the next five years, according to a McKinsey Global Survey on future workforce needs.

By taking advantage of reskilling and upskilling, your company can fill some of those skills gaps created by reductions and empower your employees to be more productive in their current roles or take on new responsibilities as needed. If your company is planning to prioritize skills development in the next year, there’s some research you should perform before creating and implementing any reskilling or upskilling programs.

Compliance Risks of Reskilling & Upskilling

The compliance risks of reskilling and upskilling your employees may not be as obvious as something like breaking a tax law, but they do still exist. Make sure that your approach to employee training factors in these considerations to avoid any potential issues.

Employment Contracts

Most employment contracts, whether verbal or in writing, include the employee’s job description. If your employees’ work responsibilities change because of reskilling and upskilling, you should consider how you'll update or adjust their contracts. Most US employees are employed “at will,” meaning that employers are legally free to modify an employee’s job duties at any time and without the employee’s consent, unless they work under a collective bargaining agreement or contract that specifies otherwise.

At-will employment is unique to the US. In other countries, employers may not lawfully change the terms and conditions of employment without agreement from the employee. If employers want to alter an employee’s job description for the purposes of reskilling and upskilling, they should consult with the employee, explain why the changes are being made, and explore other solutions if there's any objection. Some contracts contain clauses permitting employers to make unilateral changes, but it would still be in many employers’ best interests to consult with employees beforehand.

Termination Laws

The at-will nature of employment in the US also means that employees may be terminated without cause and with relatively little issue. In other countries, it’s much harder to end employment and employers may have some additional obligations to employees before or upon termination.

For example, in Algeria, special rules apply to workforce reductions of more than nine employees for economic reasons. Employers must consult with trade unions and worker representatives to explore alternatives to dismissal, such as retraining or retirement, creating more of a legal impetus to consider reskilling and upskilling before resorting to termination.

In Australia, employers are required to pay severance to employees who are dismissed due to redundancy, including for reasons related to new technologies and business downturn. Where possible, reskilling and upskilling may be a more financially beneficial alternative to potentially high severance costs. If there’s a potential to shift around your workforce, that would reduce the possibility of creating skills gaps that would require additional time and resources to address.  

Training Leave & Costs

Reskilling and upskilling can be costly, so employers should understand their financial obligations beforehand. In some countries, employers may be legally required to give employees paid training leave, even for training employees seek out on their own. For example, workers in France are entitled to up to one year of individual training leave at partial pay, and other European countries have their own versions of this type of leave.

In the US, the Fair Labor Standards Act requires employers to pay for the time employees spend in training unless:

  • The training takes place outside of work hours.
  • Attendance or participation is voluntary.
  • The training is not job-related.
  • The employee doesn’t perform other work at the same time.

Employers may also be legally required to pay for the actual cost of the training. In California, for example, labor code states that employers must reimburse employees for the cost of any mandated courses or programs. This is distinguished from the training needed to obtain professional licenses, which employees generally pay for themselves.   

How the Right Business Intelligence Helps

Adjusting to the future of work will force businesses to consider creative solutions to new problems. When faced with uncharted territory—both geographical and in business—it’s important for employers to understand relevant labor law so they’re building new programs and policies on a solid foundation.

With accurate, professionally verified labor law and compliance information, employers can ensure compliance and nurture the success of new initiatives. That expert help is especially invaluable when there isn't a reliable blueprint for you to rely on. Contact us here to learn how Expandopedia’s compliance solutions can empower your business to set itself up for future success.

About Expandopedia:

Expandopedia is a global compliance and business intelligence platform designed for HR professionals and business strategists.

Headquartered in Chicago, Expandopedia is powered by a global network of HR & Legal professionals to provide the intelligence that businesses need to thrive and remain compliant when running a multinational business.

Expandopedia provides all the knowledge and insights to successfully onboard, retain and offboard employees as well as data-driven analysis to empower strategic decision making.

Written by Annalisa Rodriguez


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