Reskilling and recruitment

The cost of reskilling versus recruitment can vary depending on several factors such as industry, geographic region, skill level required, and company size. 

However, it is often cheaper to reskill employees present in the company than to recruit new talent. 

Here are some key points to consider:

Cost of reskilling: 

Training and development: training costs may include online courses, workshops, internal training and certifications.

Training time: it must obviously be taken into consideration that while employees are training, they may not be fully productive.

Tools and Resources: Depending on the option selected, there is an investment in the tools needed for training and skills development.

Recruitment Cost: 

Advertising and marketing: expenses related to ads or subscriptions to certain platforms represent a significant cost. 

Selection process: Do not underestimate the time and resources required to conduct interviews, assessments and references.

Onboarding: the cost of onboarding new employees, including initial training.

Turnover: the risk of new employees leaving in the first few months, which can increase costs.

Reskilling vs. recruitment cost ratio:

Studies and market analyses suggest that reskilling is often more economical than recruitment. 

The most commonly cited ratio shows that reskilling can cost about 50% to 60% less than recruiting new employees. For example, an Association for Talent Development (ATD) report indicates that the average cost of training an employee is $1,273, while the average cost of recruiting is estimated to be between $4,000 and $5,000 per position, depending on the industry.

Sources and Studies: 

Harvard Business Review reports that the cost of recruiting can be up to three times an employee’s salary, especially for specialized positions.

McKinsey & Company concluded that companies investing in reskilling have seen significant savings compared to hiring new talent, particularly in the technology and manufacturing industries.

LinkedIn Learning indicates that companies with robust reskilling programs have higher retention rates, thus reducing turnover costs.

In conclusion, while the exact cost of reskilling versus recruitment may vary, reskilling is generally more profitable in the long run. 

Companies not only save on direct recruitment costs, but also benefit from better employee retention and increased productivity through better trained and more engaged employees.