For years, employee training has been in the same budget category as office candy and partying: discretionary, and a first cut when times get tough. Now, that is being challenged with actual data and it’s not working out. Organisations successfully building talent, not just attracting it, are the ones which are being reshaped by automation, generative AI, demographic change and geoeconomic uncertainty, as almost every job is impacted by all four. But as skills needs become more dynamic than the labour market is able to meet, upskilling the workforce is no longer a human resources program, but has become a business imperative.

Meanwhile, corporate decision makers are just as constrained to prove the impact of any big investment. This has resulted in a change of focus from “should organisations invest in training” to “do training investments create the business value?”. The results of a series of global employer surveys, academic studies, and numerous large-scale learning platforms indicate that effective upskilling efforts can boost productivity, boost retention rates, enhance internal mobility and lower recruitment costs in the long-term. This shorting looks at where the evidence is clear, where it’s surprising, and what it implies to thinking about return on investment (ROI) of upskilling, and how business should plan, measure, and invest in training in a more skills-driven economy.

The Skills Gap Is No Longer a Future Problem

Whether you’re talking about the ROI of a solution, the first step is to understand the scope of the skills gap employers need to pay to solve. Businesses will face the biggest challenge of skill gaps in the period 2025-2030, with 63% of employers surveyed reporting skill gaps as the top barrier to business transformation, ranking it number one for 52 out of 55 economies and 19 out of 22 industries covered by the report. The expectation of employers for the transformation of 39% of the core skills of their workforce by 2030 is expected to increase, while for the first time in years, the outlook on the availability of talent has gone negative, with expectation of 29% of employers expecting it to improve, compared to 42% expecting it to worsen.

The good news is that there is a growing countertrend by employers. As the anticipated rate of skills disruption has slightly decreased from 44% to 39%, the proportion of the global workforce gaining skills through formal training increased from 41% to 50%, a trend that was observed in nearly all industries. Together these numbers say “a market that no longer questions if training should occur, but how training should occur – well.”

Figure 1: Training uptake is climbing as expected skill disruption eases, 2023 vs 2025

Why Upskilling is Employers’ Default Strategy

Employers aren’t looking to the hiring lever as their top way to close the skills gap. Upskilling the current workforce is the most frequent workforce strategy planned for 2025-2030 – 85% of the employers surveyed plan to do so – before hiring staff who can acquire new skills (70%) or automating tasks (73%) or augmenting with new technology (63%). Upskilling is one of the top three priorities of all regions and income levels, ranging from 82% of employers in the lower-middle-income regions to 87% in the high-income regions.

Figure 2: Upskilling outranks hiring and automation as employers’ primary response to workforce disruption

It’s all about simple economics. Recruiting fees, hiring for new, few and rapidly changing skill sets and extended time-to-productivity, not to mention the lack of cultural and institutional fit, are costs associated with external hiring when skill sets are in short supply. In contrast, in internal upskilling, the organisation builds on knowledge that it already holds. That’s an indication of a shift in thinking when it comes to funding training: the same report shows that businesses are much more likely to finance their reskilling programmes themselves than to fund free or government-subsidised, with 89% viewing it as an operating cost – a sign that it is becoming a central part of their business.

The Hard Evidence: Training’s “Double Payoff”

To get the strongest causal evidence of training ROI, it must be from a carefully-designed field study, not a survey. Harvard Business School professor Christopher Stanton and Miguel Espinosa (SDA Bocconi) followed a 120-hour, 16-week training programme with approximately a 12% of the frontline staff of a Colombian government regulatory agency and compared the results before and after training in a group of 655 staff members. The results, which will be published in the Journal of Political Economy, reveal benefits that are far more than for the trainees.

Figure 3: Training lifted performance for trainees — and rippled upward to their managers

The results showed a statistically significant increase, of about 10%, in the scores of goal achievement of the trained frontline workers, compared to the same period a year ago. The most surprising results were those above the managers: managers who had worked closely with trained employees were more productive by about 8% and as a group, managers finished 3% more of their strategic-task goals. It’s simple to use, as the mechanism allows frontline employees to send fewer emails when help is needed to their supervisors once trained, thus freeing management time for more value-added work.

Almost 45% of the total measured benefit of the programme was due to this ‘spillover’ to managers. Stanton’s findings have implications for the calculation of ROI: If the gains in productivity are not passed up the hierarchy, the organisation would have had to train almost twice as many frontline employees to get the same overall output – which is a common problem with traditional ROI calculations that only measure the value of training to the frontline employee. Also, training was about 2 x more likely to lead to promotion by trained employees than by their untrained counterparts, and more likely to keep employees from leaving the organisation over the next three years, which offsets the recruitment and onboarding expense that is often attributed to training.

Quantifying the Return: What Other Datasets Show

There’s an increasing consensus in the different independent datasets. In the Future of Jobs Report 2025, the two outcomes most expected from a training investment by employers are enhanced productivity (77%) and improved competitiveness (70%), followed by top three outcomes being talent retention, which is top for 72% of employers in sectors more manufacturing-based such as Automotive and Aerospace and Electronics, and top 18% of employers in BFSI.The top two outcomes that employers expect from training investment, according to the Future of Jobs Report 2025, are enhanced productivity (77%) and improved competitiveness (70%), followed by top 3 outcomes being talent retention for 72% of employers in sectors with a high manufacturing share like Automotive and Aerospace and Electronics, and top 18% of employers in BFSI. Organisations are increasingly viewing learning as a business investment rather than an employees’ benefit, as this reinforces the idea. Therefore, increasing productivity results in a more efficient operation, while being more competitive will also ensure you are more flexible to the new technologies, customer needs and market.

Coursera’s Learner Outcomes data show that 18% of their learners with skills-specific training had a salary increase, an indicator of employer-recognised productivity gains; LinkedIn Learning’s program data estimate that organisations with good internal-mobility and learning cultures that also use the software strategically – with increased internal mobility and employees staying nearly twice as long (5.4 years versus 2.9 years) – enjoyed an estimated ROI of 695% over three years. These results all suggest that the benefits of upskilling are much greater than those of a short-term increase in productivity. They also contribute to reducing recruitment costs, for creating succession plans and improving their employee engagement, because they provide clear avenues for growth and development within the company.

Table 1: Cross-source evidence on the business return of upskilling

Where Organisations Still Leave ROI on the Table

If the evidence is this consistent, why do many upskilling programmes still under-deliver? Research from Bellevue University points to three recurring barriers: budget scrutiny that treats learning as discretionary rather than strategic spend; time pressure, as leaders worry training pulls employees from day-to-day output; and cultural inertia in organisations still structured around static job roles rather than portable skills. LinkedIn’s 2025 data add a structural gap — half of organisations report that managers lack the support to actively facilitate career development, and only 15% of employees say a manager helped them build a career plan in the past six months, a five-point decline from the year before. The cost of inaction is the more decisive number, however. Where organisations delay upskilling, WEF data show the resulting gaps compound: 41% of employers now anticipate staff reductions due to skills obsolescence, and firms report a widening mismatch between the skills growing roles demand — resilience, analytical thinking, AI and data literacy — and the skills declining roles required. Employers who wait to close that gap through hiring alone face a shrinking, more expensive talent pool; the report’s -13% net talent-availability outlook makes reliance on external hiring an increasingly costly default.

Designing Upskilling Programmes That Pay Off

• Measure business metrics, not attendance: business metrics should be a measure of productivity, retention, internal mobility and time-to-proficiency, not simply attendance and satisfaction scores.
• Take spillover value into account: plan and measure the value of training for managers and teams, not just the trainee — the HBS study implies that almost half of the overall ROI can be attributed to the effect of training on managers and teams.
• Rather than a “one size fits all” approach, focus on the skills that show the largest gaps in proficiency and are most critical for the job roles that are growing, or declining, in importance.Do not evenly allocate budgets, instead prioritize the skills with the greatest importance and skill deficits in job roles that are expanding or declining.
• Pair learning with career pathways: Career pathways and career internal mobility and promotion transform training to retention, a cost centre to a recruitment and retention centre.
• Equip managers not just employees: managers are half of organisations reporting that they lack support to guide development, so manager enablement is as important to ROI as content.

Conclusion

The data converge on a single answer: upskilling brings better business results and its benefits can often be greater, and have a broader impact within an organisation, than can be calculated with the traditional business ROI methodology. The common thread is everywhere: whether it’s a “randomised” field study in the Colombian government agency, or surveys of employers worldwide or learning data from platforms, trained employees bring in more production, keep more staff on board, move them up quicker, and free up managers to work on higher value-added tasks. Importantly, these benefits are cumulative, with better internal talent pipelines, higher organisational resilience and a more agile workforce as a result of these benefits becoming more tangible over time, and in response to business needs.

The big question for leaders still considering training versus other investments in capital is no longer if it pays off, but how soon will an organization be able to establish measurement systems that demonstrate this? With the pace of change in skills needs greater than the rate at which labour markets are generating new skills, there is a strong potential that organisations that make learning a part of their business planning will outperform organisations that still view learning as a discretionary expense. With the constant pace of change and technological disruption that is taking place in today’s economy, it is no longer just a human resource objective to develop your own talent, it is a major competitive advantage.