QA Talent

Retrain or rehire – how should you re-skill your workforce?

If you’re facing a skills gap – the things you’re most concerned about are probably time and cost mounting up because of it.

It takes time to find someone with the right skills – especially if it’s a technical role and the skills you’re looking for are in demand. And you’ll know all too well that the costs of filling a gap add up – quickly. Staff turnover costs UK companies £1.13 billion every year [1].

The key question is: do you rehire or retrain your workforce?

Which option should you choose to address missing skills? Let’s take a look at the factors that drive that decision.


Option A: Rehiring

The most obvious way to bring in new skills is hiring them.

There are hidden costs to this approach that you don’t always think about – like recruitment, salary (while someone gets up to speed), and redundancy. And the hiring process isn’t always quick – there can be delays, trouble finding in-demand skills (particularly in for technical roles), and notice periods to factor in.

When you’re hiring for a new role, in context of filling a skills gap – you’re actually looking at firstly removing and then recreating a role with the right new skills.

These two steps should ideally be thought about together, for a more accurate reflection of the time and cost of hiring.


How much time does it take to hire?

Generally, people think that hiring someone new is a quick way to get the skills they need. But it’s not always that simple. There are some hurdles to jump when you’re hiring someone that each take time.

The average time to fill a position is 27.6 business days [2], assuming everything goes smoothly with no disruptions (like candidate offer rejections etc.)

Looking at “time to hire” as a measure, only takes the window from when the vacancy is live to when someone accepts an offer into account. The real time to fill a position also includes things like notice periods, and other possible delays (like a delayed start date). So, the time to hire could stretch to be significantly longer – if skills are in demand, or you’re looking for someone more senior.

Notice periods are usually between two to four weeks. But they could be longer. And they need to be factored in for both the person leaving, and the new person joining.

So, finding, hiring, starting, and getting someone up to speed and working – could be time consuming. And carries risk along each step of the recruitment process.


What’s the cost of hiring to fill a skills gap?

Recruitment agencies will find the right person for you – with the right skills. But it does come at a cost. It’s usually 20-30% of the candidate’s annual salary (that works out at a minimum of £5,520 for a role paid the UK’s average salary of £27,600) [3].

As well as recruitment costs – a hidden cost is someone’s wages during the time they’re getting up to speed, before they become fully productive. It takes time to adapt to a new business, get to grips with new responsibilities, and build relationships with new people.

So what could this hidden cost be? On average, a tech professional will take 30 weeks to reach max productivity – but there are reports of it taking up to 2 years to achieve the same standard of work as a previous employee [4].

When you factor in wages during this time – the hidden costs can average over £17,000.

Let’s also look at the cost of removing a role. In 2017, a business paid out almost £4 billion to 255,000 laid-off employees [5]. On average, a business pays out £14,902 in redundancy payments (which is close to the statutory cap). But many choose to pay more. Staff that have been with you for longer, or those with high salaries, may be entitled to higher payments. For example in FY 2016-17, more than 1,600 workers who left public sector roles received more than £100,000 in redundancy pay, totalling costs of £198m.

So combining recruitment and wages, with the redundancy costs – the total cost of finding new talent is around £38,000 for a tech professional on a £30,000 salary (127% of their annual salary).

Option B: Retraining

So what’s an alternative? You can train your existing employees in the skills you’re missing.

In this case it’s obvious, it takes time and investment. So you might be reluctant to go down this road. But there are tonnes of options, from tailored training programmes to off-the-shelf courses to apprenticeships. You can do any of these in any specialism, and they vary in duration.


What training options are there?

If skills are needed urgently – training can be delivered quickly. Full-time intensive training programmes (or academies) remove someone from their usual day-to-day work, to accelerate their learning. They develop someone’s skills – from a basic level to comprehensive, practical knowledge of a specialism – within 8 to 12 weeks.

Another option is a structured training programme – which is less disruptive. With a couple days of training each week – they can develop new skills over 3 to 6 months. Whilst being able to apply new knowledge straight at work – in between training days.

A third possibility is apprenticeships – this is a great option to get skills, particularly if you pay the UK apprenticeship levy. Apprenticeships are a long-term solution to bridging skills gaps – with comparatively minimal disruption to work activity. Apprenticeship training is done one day a week (on average). It’s a flexible way to learn, and you achieve an accreditation at the end. They usually last between 12 and 24 months – and they’re available in loads of different technical specialisms.


How much does training cost?

Broadly speaking, the costs of all three options are fairly similar. Intensive academies are between £15,000 to £25,000. Structured training programmes are typically around £20,000 (on average). Apprenticeships cost between £10,000 to £27,000 – but this could be funded by your apprenticeship levy (if you pay it) or (if you don’t) the majority of the cost could be covered by government funding. This gives apprenticeships an obvious cost-advantage over other options – if there’s no immediate rush and you’re happy with a longer term solution.

Does retraining pay off?

There are surprising advantages to retraining. Unsurprisingly it leads to a boost in performance – but surprisingly it also leads to much higher satisfaction. In LinkedIn’s 2019 ‘Workplace Learning Report’ - 94% of employees surveyed said they would stay at a company longer if it invested in their career development [6]. People that spend more hours learning, are more likely to have found purpose and know where they want to go in their career – and are significantly less likely to be stressed at work.

Organisations with trained, motivated and confident employees are also more likely to attract a better selection of applicants for future vacancies – because of their investment in people. [7]


Will you choose rehiring or retraining?

Rehiring isn’t the only option to fill a skills gap. In the right circumstances, training can be a valuable investment – compared to restructuring.

Restructuring may be a quick, short-term solution to get missing skills – but there are costs involved, and if you do fall foul of hidden delays – it can make what seems like a speedy process, time consuming.

Training is an alternative option – considering all the different learning solutions out there – it could be a lower cost, and potentially faster way to address skills gaps. And the other advantages may even provide better value.


Considering retraining? Let’s go through your options.




[1] Oxford Economics: The Cost of Brain Drain. Understanding the financial impact of staff turnover [2014]

[2] HR Summits - HR decision-makers spend almost a month on recruitment process… [2016]

[3] The Undercover Recruiter – The true costs of a new hire in the UK [2017]

[4] Recruit Shop – How long does it take an employee to be fully productive?

[5] The HR Director – Business pay out £3.8bn in redundancy payments this year [2018]

[6] LinkedIn – Workplace Learning Report [2018]

[7] LinkedIn – How Learning Programs Attract and Retain Top Talent [2019]

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