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Upskilling does not work that well. So how do you digitally transform?


The seven steps of digital transformation

Recently, we started a mini-series on digital transformation (link), identifying seven major parts of digital transformation:

In this post we’re going to discuss upskilling and reskilling.

What do those upskilling and reskilling terms mean?

They refer to the development of new skills by your team. As your business changes -- whether it’s a smaller change like embracing the cloud or a bigger change like a completely new strategy -- your people need to change with it, or the change won’t go very well (typically). Many companies over the past decade have claimed they were entering a “digital transformation” period, but not given their people the new skills and terminology to succeed in a digitally-driven environment. As such, we refer to the redevelopment of employee skill sets as “upskilling” or “reskilling,” or even more conventionally “re-training.”

Do these efforts at retraining tend to work?

Unfortunately, no. 

The Wall Street Journal has piped up on how the programs “fall short.” When former USA Presidential candidate Andrew Yang appeared on the Joe Rogan podcast, he said that in independent studies, the success rate is about 0-15%, on average. The Atlantic magazine has said worker retraining or reskilling is a “false promise.’ There are concerns, too, that a lack of new worker skills will leave many current employees susceptible to losing jobs to automation. And The New York Times has mentioned the inherent paradox: many people are unemployed globally right now, or want a better job -- but employers claim they have many roles they can’t fill. A lot of that is tied to a lack of skill development.

What could this mean for your business?

If you don’t have the right people, with the right skills, you cannot grow and innovate. But if your attempts at retraining or reskilling those people only have a 10-15% chance of success, you need another plan to get the skills in-house that you need to grow your business.

What is the most common option?

Outsource the skills and function you need. That way, what you’re doing is essentially purchasing a team that already has pre-existing expertise and skills. You don’t need to worry about retraining them, because they’re already trained and have worked on similar projects in similar industries. It’s a much smaller gamble than hiring in-house and trying to constantly retrain when revenue needs are shifting. And if you find an outsourcing partner using a team extension model, where the outsourced team folds into the existing team, even better.

The lack of skill development + the availability of outsourcing is one reason why you see outsourcing markets grow so quickly in recent years. The BPO market, for example, is expected to grow $76 billion USD in the next four years. That’s partially transactional -- contact centers, etc. -- but partially because businesses need access to skills and can’t find or develop them, so they go to where the skilled people are.

How do you find an outsourced software development team?

Outsourcing has challenges and risks too, though -- if you get the wrong partner -- so you need to know what you’re looking for. We put together a checklist of the major aspects you need to consider in an outsourced software development team. Look at it, and if you have any questions, let us know.

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