Globally, a whopping 75% of employers are facing a talent shortage. If you’re among them, you might be wondering whether you should build or buy your talent. There are pros and cons to each route. However, choosing to upskill and reskill your employees can play a critical role in building a resilient workforce and boosting your bottom line.

Upskilling and reskilling saves your business money 

In September 2024 254,000 jobs were created in the United States. Economists further predict that roughly 100,000 jobs will continue to be added every month. by hiring brand new talent, but according to research from the Society for Human Resource Management Society for Human Resource Management (SHRM):

• The average cost of a new hire is about $4,700 (including hours spent conducting interviews, background screening, drug tests, employment assessments and more)
• Employers estimate the total cost of a new hire is nearly 3-4x the position's salary

In other words, if you’re looking to hire a procurement manager — a position that competitively makes on average $104,000 annually — the total cost of recruitment could run you $312,000.

New hires increase training budgets 

Once you find the right person, you still need to get them up to speed with your organizational goals, the daily responsibilities of the role and all the business technology used to perform tasks.

In 2022-2023, Training magazine found that organizations spent on average $101.8 billion on training new and current employees. And that billion-dollar figure does not include costs associated with recruitment. So, if you’re already investing in training programs for your business, why not focus on employee retention?

Keep your competitive edge

There are many benefits, outside of financial, for retaining your workforce. Retaining employees reduces departmental disruptions that could cause unnecessary stress. Imagine you manage a lean logistics team and suddenly, you find yourself without a logistics manager. The person who held that position was with your business for five years, helped develop new processes, was the main source of workflow knowledge and was a great culture fit.

You’re not going to find a new hire overnight. Now, the work of that one logistics manager needs to be divided up among the remaining team members — adding to their workloads. And unfortunately, all those years of company knowledge and history went out the door with them, maybe to your competition.

How upskilling and reskilling reduce recruitment costs

When we break it down into dollars and cents, on average, companies of all sizes spend about $954 per learner. That’s $3,746 dollars cheaper than the average cost of a new hire. Not only do upskilling and reskilling save your organization money, but they also make your workforce more resilient.

Your employees want to feel appreciated for the work they do. Of course, offering a competitive financial and benefits package is necessary (check out where supply chain salaries stand by downloading our Supply Chain Salary and Career Report). In addition to money, employees want to know their employer is investing in them. The U.S. Chamber of Commerce found that one of the main reasons employees leave positions is due to lack of career development.

When you invest in upskilling and reskilling, you see higher productivity, a boost in employee morale and a more agile workforce with fewer skill gaps.

Close skill gaps and reduce expenses

Upskilling and reskilling your workforce is a win-win for your organization and your employees. You need roles filled by highly skilled talent and your team wants the training necessary for upward mobility. Cut the cost of recruitment from your budget and start training your workforce for the future.

Check out our talent solutions to get started today.