Reskilling Vs. Hiring: What Works in a Tech Industry?

More than 120 million workers across the world’s 12 largest economies are expected to require reskilling due to the rise of intelligent, AI-driven automation. At the same time, the number of technology roles is projected to increase by 22 percent by 2029. Together, these shifts are pushing organizations worldwide to think differently and adopt new approaches to meet growing talent needs.

At the same time, external hiring carries its own challenges. Studies show that nearly 20 percent of new employees leave within the first 45 days, which can lead to wasted time and added costs. These early exits often stem from unclear role expectations, limited understanding of responsibilities, or a poor cultural fit within the organization.

The Impact of AI on the Workplace

AI is already reshaping the way people work. For many organizations, it has increased productivity by automating repetitive tasks and simplifying complex workflows. This shift has saved time and improved efficiency. At the same time, AI has created uncertainty for others, as automation raises concerns about job loss and workforce disruption.

Within this AI-led landscape, companies face an important choice. Should they invest in upgrading the skills of their current employees, or bring in new talent already trained for future roles? Making the right decision requires weighing the advantages of reskilling against situations where hiring new expertise makes more sense.

“Hire for Attitude, Train for Skills”: The Philosophy in the AI Era

The concept of “hire for attitude, train for skills” is becoming increasingly relevant in the context of AI. The rapid pace of technological advancement means that skills are constantly evolving, and the ability to adapt is now more important than ever. In this environment, attitude—characteristics like a willingness to learn, adaptability, and collaboration, becomes a key factor in hiring decisions.

Instead of hiring based only on technical knowledge, organizations benefit from choosing people who show a strong desire to learn and grow. With the right training, these individuals can build the skills needed for AI-driven roles. This approach helps companies create flexible teams that evolve along with new technologies.

What is Reskilling?

Reskilling refers to helping employees learn new abilities so they can move into a different role within the organization or strengthen their current skill set to match changing job needs. This often becomes necessary when technology reduces the relevance of certain tasks or exposes gaps in existing capabilities.

For instance, someone working in marketing may show interest in a human resources role. By training that employee to handle recruiting responsibilities, the organization gains an internal resource while the employee benefits from career growth within the same workplace.

Choosing reskilling over hiring new talent can be a smart option. Existing employees already understand the company culture and processes, which lowers the risk of early attrition after training. It also reduces the cost and time needed to build experience from the ground up, creating value for both the business and the employee.

The Benefits of Reskilling

Reskilling offers numerous advantages for businesses that want to future-proof their workforce while remaining competitive in a rapidly changing world. Here are some key benefits:

• Retention of Institutional Knowledge: 

When companies reskill their current employees, they retain the deep institutional knowledge these individuals have acquired over time. Employees who are familiar with the company’s processes, culture, and industry insights can continue contributing to the organization, but with updated skills that align with new technologies.

• Boosting Employee Morale and Loyalty: 

Reskilling sends a strong message to employees that the organization is invested in their growth and long-term success. When employees feel valued and see a clear path for career progression, they tend to have higher job satisfaction, leading to increased loyalty and reduced turnover. A motivated workforce is more productive and engaged, which directly benefits the business.

• Cost-Effectiveness: 

Reskilling can be more cost-effective than recruiting new talent. Recruitment involves significant costs, including advertising job openings, screening candidates, and onboarding new hires. Additionally, new employees need time to acclimate to the company’s culture and processes, resulting in a temporary productivity dip. In contrast, reskilling existing employees is a more efficient way to close skill gaps without starting from scratch.

• Adapting to Industry Shifts: 

As AI and automation transform industries, reskilling enables businesses to stay agile and responsive to these changes. Instead of hiring new talent every time there’s a shift in the market, reskilled employees can pivot to meet new demands, allowing the company to evolve without major disruptions.

Three Types of Reskilling Methods

There are three different types of reskilling methods that companies can use. These are:

• Digital Reskilling: 

Digital reskilling involves teaching employees new skills related to technology, such as coding or data analysis. They are trained to use new software tools and are updated with the current industry standards.

• Soft Skills Reskilling: 

This involves teaching employees new skills related to communication, problem-solving, etc. They help employees become more versatile. 

• Career Reskilling: 

This involves teaching employees new skills related to their current job or career. The purpose is to make them unbeatable in their current role.

Reskilling vs. Hiring

When Recruitment is the Preferred Approach

While reskilling offers many benefits, there are times when recruitment is the better option, particularly when an organization needs specific expertise or specialized knowledge. Here are some situations where recruiting external talent is essential:

• Filling Specialized Roles: 

Some roles require highly technical skills that existing employees may not possess or be able to develop quickly. For instance, when launching an AI-driven product, a company may need data scientists with deep knowledge of machine learning algorithms or natural language processing. Reskilling internal staff for these roles could take too long, making recruitment the more viable option.

• Bringing in Fresh Perspectives: 

External hires can provide fresh perspectives and innovative ideas that challenge existing ways of thinking. In industries where creativity and innovation are critical, bringing in new talent can spark the kind of out-of-the-box thinking that leads to breakthroughs. For example, hiring a creative director from outside the company can inject new life into branding efforts or product design.

• Immediate Talent Needs: 

When a company needs to scale quickly or fill critical gaps, recruitment can provide an immediate solution. For instance, expanding into new international markets may require local experts with specific knowledge of regulations, cultural nuances, and customer preferences. In such cases, recruiting talent with the right expertise can ensure a smoother and faster expansion.

Finding the Balance: Reskilling and Recruiting for Long-Term Success

Ultimately, the most successful organizations will strike a balance between reskilling and recruiting. Reskilling allows companies to retain valuable institutional knowledge, improve employee loyalty, and adapt to industry shifts. On the other hand, recruiting external talent ensures access to specialized skills and fresh perspectives that may be difficult to develop internally.

By adopting a hybrid approach, businesses can build a dynamic, future-ready workforce that is equipped to handle both current and future challenges. Whether through reskilling or recruitment, the key is to remain flexible and proactive in navigating the rapidly changing landscape of AI-driven work.

Organizations that invest in both strategies will be best positioned to thrive in the AI era, ensuring they have the talent needed to stay competitive, innovative, and adaptable in a world where technology is constantly evolving.

Final Thoughts: Building a Future-Ready Workforce

In a world where change is constant, companies that thrive will be those that continuously develop their people. Both hiring and reskilling empower businesses to meet technological disruptions and market shifts with agility instead of panic, and they reassure employees that they won’t be left behind as jobs transform. Leaders should view these efforts as a long-term investment in innovation, competitiveness, and talent retention. Corporate giants like Amazon and AT&T investing hundreds of millions into workforce upskilling underscores how crucial workforce development has become in the modern economy.