Upskilling vs. reskilling: What's the difference and why you should know

If you're a leader planning the future of your workforce or an employee thinking about your career, you know that upskilling and reskilling are very important. But you may not have thought much about what these terms mean and why they are so critical. 
 

As technology reshapes industries, the skills we need to succeed are shifting quickly. Navigating these changes—whether as an individual or as an organisation—can mean the difference between thriving and falling behind. 

 
In the current context, upskilling and reskilling are increasingly becoming more than tools for career growth or workforce optimisation—in many cases, they're survival strategies. But what exactly do these terms mean, and why do they matter? 

 
Understanding the Difference 

 
Upskilling is about enhancing skills you already have. This might mean gaining expertise in new software tools, mastering advanced techniques in your field, or learning how to apply emerging technologies like AI to your current role. The aim is to improve your work, increase your value, and prepare for growth. 

 
Reskilling is more transformative. It's about acquiring entirely new skills to transition into a different role, often in response to personal changes or shifts in the job market. If automation phases out a specific position, reskilling might allow an employee to pivot into a tech-related role that requires a fresh set of capabilities. 

While the goals are different, the urgency is the same. The World Economic Forum predicts that in 2025, 85 million jobs will be displaced due to automation, while 97 million new roles requiring different skill sets will emerge. 

 
More than technical knowledge 

 
For organisations, skills gaps have become one of the most pressing challenges. Recent surveys in Australia show that 87% of CEOs acknowledge significant skills gaps in their workforce. Instead of relying solely on external recruitment, which is expensive and often fails to deliver immediate results, many businesses are turning to training initiatives to fill these gaps. 

 
For employees, continuous learning is equally critical. The average lifespan of a learned skill is decreasing; today, it is just five years on average. 

 
This shift isn't just about technical skills, either. While expertise in areas like AI, data analytics, or cloud computing is in high demand, employers also place a premium on soft skills such as adaptability, creativity, and emotional intelligence. These human-centric abilities are becoming more valuable as automation takes over routine tasks, making it clear that upskilling and reskilling are about more than just technical proficiency. 

 
Evaluating What You Need 

 
Whether you're a company leader or are just thinking about your career, the first step in determining whether upskilling or reskilling is the right approach is an honest assessment of the current situation. 

 
As a leader, consider where your organisation stands today and where it needs to go. Is it struggling to meet the demands of new technologies? Are certain roles becoming less critical? Conducting a skills audit can help identify gaps and opportunities. You might find that your team needs to develop advanced skills they don't have. Upskilling your existing workforce could be the solution. 

 
Alternatively, you might realise that entire job functions are evolving or disappearing, in which case reskilling becomes essential. 

 
For employees, the evaluation process starts by asking some fundamental questions: Is your current role likely to be affected by technological changes? Do you feel prepared to adapt to emerging trends in your field? If your answer to these questions is "no," it might be time to consider reskilling. 

 
On the other hand, if you're looking to advance within your industry or simply perform your current job more effectively, upskilling could be the way to unlock new opportunities. 

 
How to Get Started 

Once you've determined what you or your team needs, the next step is action. Today, there are more resources than ever to support upskilling and reskilling initiatives. Online learning platforms, short courses, and microcredentials make fitting professional development into busy schedules easier.  

 
For companies, partnering with educational institutions like RMIT Online ensures that training programs are aligned with industry needs, offering employees the chance to develop real-world skills. 

Leaders should also consider creating a culture of learning where professional development is encouraged and celebrated. Offering incentives such as tuition reimbursement or recognition for completed courses can significantly affect participation and outcomes. 

As the pace of change accelerates, the question isn't whether you should invest in upskilling or reskilling but how quickly you can start. By taking proactive steps toward continuous learning and development, both individuals and organisations can position themselves to thrive in whatever challenges tomorrow brings.