Modern business is a global digital arms race. Companies around the world are aggressively investing in next-generation technologies – cloud, artificial intelligence(AI) and automation – to gain competitive advantage.
The scale is staggering: spending on AI alone is expected to exceed $550 billion by 2024 , and the corporate e-learning market is growing exponentially. However, beneath the surface of this technological spurt lies a paradox that acts as a hidden handbrake.
While companies are allocating huge budgets to the purchase of advanced ‘hardware’, investment in the ‘human operating system’ – i.e. employee competence – is not keeping up.
The skills gap: the invisible debt you pay every day
The concept of ‘technology debt’ is well known in the IT world. The skills gap is its organisational equivalent: the invisible debt that a company incurs every day when the skills of its employees no longer keep up with technology.
This debt accrues interest every day in the form of lost productivity, delayed projects and missed opportunities.
The scale of the phenomenon is alarming. As many as 92% of jobs today require digital skills, and a third of employees lack even basic digital competence. This is not a problem of the future.
McKinsey research shows that 87% of managers admit that their companies are already facing a skills gap or expect one in the next five years.
The cost of inactivity is measurable and enormous. Korn Ferry Group projections indicate that by 2030, the skills gap could cost the global economy $8.5 trillion a year in unrealised revenue.
In the US alone, the estimated cost over a decade is $2.5 trillion. At an operational level, the lack of skills directly hits productivity. In roles affected by digital transformation, productivity losses can be as high as 20-25% , and in high-tech companies, where expertise is key, skills shortages can reduce productivity per employee by up to 65-75%.
Director’s dilemma: build or buy talent? the calculus is simple
Every leader faces a dilemma: ‘buy’ ready-made talent from the market or ‘build’ it internally? Popular belief leans towards recruitment, but the financial data clearly shows that the ‘build’ approach is cheaper and much more effective.
A cost analysis of the ‘buy-in’ strategy reveals its true price tag. The average cost of hiring a new employee in the technology industry is $23,450.
For specialised roles, recruitment fees alone can exceed $30,000. Then there’s the time involved – it takes an average of 10 weeks to fill a technology vacancy.
In contrast, the economics of a talent ‘building’ strategy are much more favourable. The average cost of upskilling an existing employee for an IT position is $15,231, and more than half of companies spend less than $5,000 per person.
Bersin’s analysis shows that training an internal employee can save up to $116,000 per person over a three-year period compared to external recruitment.
The strategic benefits are even more compelling. In companies with high internal mobility, employees stay almost twice as long (5.4 years on average compared to 2.9 years). What’s more, 55% of organisations report productivity gains as a direct result of upskilling programmes.
So the choice is clear: ‘Buying’ is an expensive, risky cycle of recruitment and turnover. “Building” creates a self-perpetuating mechanism of investment, loyalty and growth.
Measurable return on investment (ROI) in knowledge
Investment in employee development is not a ‘soft’ HR expense, but one of the most profitable investments. The data clearly shows that the return on investment in upskilling is not only measurable, but extremely high.
Companies with comprehensive training programmes have 218% higher revenue per employee. Gallup analysis shows that organisations strategically investing in development record 11% higher profitability.
IBM’s internal research has shown that every $1 invested in online training brings about a $30 return in increased productivity.
These figures are borne out by specific cases. Telecommunications giant AT&T, faced with outdated competencies in nearly half of its workforce, invested $1 billion in a massive reskilling programme.
The results were transformational: employee turnover fell and the company was able to fill nearly 50% of new technology positions with internal candidates. Another development programme delivered a 25% increase in revenue over five years.
The worker at the centre: a new currency in the labour market
In an era of chronic talent shortages, traditional motivational tools such as salary are no longer sufficient. A powerful new currency has emerged in the labour market: the opportunity for development.
Employees are no longer passive recipients of training – they actively demand it. As many as 94% of employees say they would stay with a company longer if it invested in their professional development.
This is one of the most consistent statistics in labour market analyses. Lack of development opportunities is one of the main reasons for resignation.
This need makes upskilling the most effective retention tool. Companies with strong training programmes enjoy up to 53% lower turnover. Employees who feel their organisation encourages them to learn are 47% less likely to actively seek a new job.
At the same time, AI is changing the definition of core competencies. As automation takes over routine tasks, uniquely human skills, so-called ‘power skills’, are gaining importance: critical thinking, creativity, emotional intelligence and adaptability.
Investment in these areas also has tangible benefits – an MIT study found that a training programme focused on soft skills delivered a 250% return on investment.
