How Upskilling Drives Employee Retention | Bhavesh Goswami | CEO | CloudThat

Today’s talent market is fiercely competitive, with companies vying for a small pool of highly skilled professionals. This battle inflates salaries, and many businesses miss out on candidates. Roles in high-demand fields like AI, machine learning, and cloud architecture frequently go unfilled for long periods. It’s a cycle that leaves businesses disappointed as they engage in bidding wars, only to lose that talent to the next company offering a higher CTC.

Rather than constantly competing for external talent, investing in the talent you already have is a more effective approach. By upskilling your existing workforce in key areas, you can address talent shortages from within. At CloudThat, we’ve seen firsthand how targeted upskilling transforms employees into top performers ready to take on critical projects. We’ve successfully applied this strategy internally and helped numerous organizations do the same, enabling their teams to meet evolving demands without relying solely on external hires.

Upskilling as a Competitive Edge

In today’s knowledge-driven industries, companies that can upskill their employees quickly are the ones that stay ahead of the curve. Wage costs in the IT sector are considerably high—companies like Wipro and Infosys spend upwards of 40% of their operational expenses on salaries. As the lifespan of in-demand skills continues to shrink, businesses need to think strategically about how they can reskill and upskill their workforce on an ongoing basis. Reskilling isn’t a one-time event anymore; it’s a continuous process.

The business environment is much like a T20 cricket match—you’ve got to hit sixes at every opportunity, to stay in the game. As our Chief HR Officer, Narendra Babu, puts it, “The companies that can rapidly build the right skills in their workforce are the ones that will capitalize on new business opportunities, while those that lag behind will miss out.” Upskilling, when done right, positions companies to be proactive rather than reactive in addressing talent needs.

The Employee Perspective

Employees today seek more than just a salary —they want career growth and the ability to develop new skills. As Microsoft’s Work Trends Index study highlighted, 76% of employees said they would stay with their company longer if they had access to more learning and development opportunities. When employees see that their company is invested in their growth, it’s a game-changer for morale and retention.

Take the example of our CTO, Prarthit Mehta. He joined CloudThat as an intern with minimal experience, yet through continuous upskilling, he rose to CTO in just 10 years. This type of progression highlights the value of developing internal talent—it fosters loyalty and often results in a better cultural fit than lateral hires.

Upskilling not only reduces attrition but also lowers the cost of hiring externally. Employees who have the opportunity to learn and grow within their roles are far more likely to remain committed to the organization. They understand the company’s values, culture, and long-term vision, making them more effective and engaged in their roles.

Build a Culture of Learning

As Satya Nadella of Microsoft aptly put it, organizations need to shift from a “know-it-all” culture to a “learn-it-all” culture. While classroom-based instruction has its place, relying on just a couple of days of training every few years is insufficient. Today’s employees want hands-on learning experiences, case studies, and opportunities to apply their knowledge in real-world situations. The learner experience has become a critical factor in driving engagement and retention.

But it’s not just about the short term. As businesses evolve, leaders must anticipate the skills their teams will need not only in the next six weeks or six months but also in the next six years. Planning for the future requires looking ahead to the emerging trends and technologies that will shape your industry and ensuring that your workforce is prepared to meet those challenges head-on.

In addition to strategic planning, offering recognition and appreciation can further boost employee morale. For instance, every month, we acknowledge employees who have achieved certifications. We also present quarterly awards for relentless learning to employees who have upskilled the most. Ultimately, cultivating a culture that values learning, and recognition will empower your workforce, drive innovation, and ensure your organization remains competitive.

Conclusion: Invest in Upskilling for Long-Term Success

Upskilling is not just about filling skill gaps—it’s about preparing your workforce and your business for the future. As skills evolve, investing in your employees’ learning and development is the key to staying competitive. It reduces costs, improves retention, and creates a more engaged workforce. By making upskilling a priority, companies can build a sustainable talent pipeline that supports long-term growth and innovation. Instead of scrambling to find external talent and risking high attrition rates, businesses that focus on developing their current employees will be the ones leading in tomorrow’s marketplace.