ILX Group’s new research reveals how upskilling existing employees could save businesses up to £36,084 per employee when compared to replacing them with new hires.

With high costs for recruitment, the opportunity cost of replacing employees and the weeks or months it can take for new employee induction, upskilling could be the answer for businesses struggling to close skills gaps.

recent study by Monster revealed that 58 percent of organisations surveyed struggle to find candidates with the right skills, with 29 percent agreeing that the skills gap has increased since 2021.

However, figures on the cost of replacing employees and training existing employees suggest that upskilling is the most cost-effective way to solve this problem.

Research that ILX conducted this year revealed that these skills are in demand from different organisational functions. For example, within Product Development, research found that 60 percent of Heads of Operations identified PPM. While, within IT Departments, 73 percent of Heads of IT and Digital Transformation said ITSM.

Upskilling vs. new hires

The table below, researched and compiled by ILX Group, demonstrates the potential savings that could be seen when organizations opt to invest in upskilling an existing employee rather than replacing them.

The statistics for ‘Average Cost of Replacing an Employee’ are based on the average recruitment fees (15%), costs of inducting/training new employees, and welcome bonuses.

The ‘Average Cost of Training an Existing Employee’ is the average price of relevant training courses based on those quoted by various providers. The findings indicate that if the salary stays the same for the upskilled employee or new hire, organizations choosing to upskill rather than replace could save between 70 and 92 percent on average.

The pandemic led to The Great Resignation, and while it affected sectors across the board, those working in hospitality and at the front-line appear to have been most likely to seek out new employment.

Training for a stable career

This will likely result in greater competition for employment in other sectors, meaning job security could become an issue for many. However, those employees who have the opportunity to complete relevant training could add value to organisations while maintaining a stable career in their chosen profession.

What remains unclear is if employers will invest in existing employees’ training and professional development or spend more on replacing them with new hires they feel already possess the correct skills.

Managing Director at ILX, Russel Kenrick, says:

“Research we conducted in 2022 with senior business, HR and L&D professionals revealed a few reasons why organisations value training employees through upskilling, reskilling and cross-skilling programmes. Including that it helps to retain good talent and valuable internal knowledge (52%); it demonstrates to employees there are multiple career paths within the company (52%) and it is more cost effective (46%).

“We’re not surprised by this trend. These certifications are instrumental in supporting organisations accelerate their digital transformation programmes; continually innovate; increase efficiencies; and optimise their operating models. As they’re aligned to project and programme management (PPM) and IT service management (ITSM) frameworks that provide best practice guidance.”






Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.