Upskilling vs Reskilling: What Should Companies invest on?

When companies face a rapidly shifting business environment, such as automation, AI, digital transformation, a question often emerges. 

Should you invest more in upskilling your existing workforce or in reskilling them for entirely new roles?

Both approaches have clear benefits,  but they serve different purposes. Upskilling boosts productivity in existing roles, while reskilling equips employees for entirely different ones. 

They’re both great but which one is greater? 

Today, the leading PR agency in Malaysia is here to help you understand the difference between upskilling and reskilling, compare benefits & trade-offs, examine real-life examples, and offer a decision framework to guide your strategy. So let us begin!

What’s The Difference Between Upskilling vs Reskilling?

Upskilling sharpens current skills, while reskilling equips staff for completely different roles.

Upskilling means helping employees grow within their existing roles. For instance, a finance executive learning data analytics to use AI-driven reporting tools.

It’s about building deeper competence and staying competitive.

Reskilling, on the other hand, is about moving employees into different jobs altogether. For example, retraining a factory operator to become a robotics technician after automation replaces manual tasks.

The distinction matters because leaders must decide whether to refine existing talent or redirect it when facing rapid technological and market changes.

Why Both Matter: Benefits & Challenges

Both upskilling and reskilling help companies stay competitive, and come with clear strengths and trade-offs. This is the difficult part where leaders and companies must weigh before deciding where to invest.

Upskilling: Benefits

Upskilling improves current role performance while strengthening employee loyalty.

• Faster ROI: Because training builds on what employees already know, upskilling is cost-effective and delivers quicker results.
• Retention boost: Staff who see professional growth in their current roles are less likely to leave, lowering turnover costs.
• Productivity gains: Teams become more efficient without needing major restructuring or role changes.

Example: A sales team trained to analyse CRM dashboards can identify high-value leads faster, closing more deals without changing job titles.

Upskilling: Challenges

Upskilling alone won’t safeguard jobs if the roles themselves are disappearing, especially with AI automation.

• Short shelf life: Newly acquired skills may be overtaken by disruption within a few years.
• Risk of stagnation: Without ongoing refresh, employees plateau and revert to old practices.
  
• Limited impact on transformation: Upskilling sharpens current roles, but doesn’t solve fundamental structural shifts like automation or AI adoption.

For employees looking to upskill themselves with AI knowledge, there is a free course by the government called “AI untuk rakyat”, we did a whole blog about it so check it out if you’re interested!

Reskilling: Benefits

Reskilling equips employees to take on new and future-ready roles.

• Adaptability: Staff are retrained into areas where demand is rising, helping businesses pivot quickly.
• Hiring savings: Internal mobility reduces the need for costly external recruitment and onboarding.
• Future-proofing: Ensures the workforce remains relevant, even when old roles are automated or phased out.

Example: A factory operator retrained as an automation technician helps the company manage robotics internally, reducing reliance on imported expertise.

Reskilling: Challenges

Reskilling demands more time, resources, and leadership support.

• Higher upfront costs: Structured training programmes and certifications take more investment even with HRD Corp claimables.
• Temporary productivity dip: Employees need time to adjust before reaching full competency in new roles.
• Cultural resistance: Some staff may hesitate to switch careers, requiring strong mentorship and change management.

“Randstad Malaysia’s 2025 Workmonitor finds 55% of employees would quit if managers don’t support their long-term career pathways (58% among Gen Z/Millennials).”

This makes investment in training, whether through upskilling or reskilling, not just a development strategy, but a retention strategy too.

Malaysian Companies That Underwent Upskilling and Reskilling Programmes

To keep up with the times, many industry titans invest heavily in upskilling and reskilling their employees. Here are some of the most recognised examples in Malaysia.

Digi’s 40-Hour Learning Challenge

Digi Employees are encouraged to dedicate 40 hours annually to self-driven learning through platforms like Coursera and LinkedIn Learning. 

This has created a culture where continuous learning is expected, not optional, keeping Digi’s workforce agile in a fast-evolving telecom sector.

Pos Malaysia’s People Operations

Leadership development at Pos Malaysia goes beyond technical training, focusing on adaptability, emotional intelligence, and resilience. 

By embedding soft-skill development into daily workflows, learning feels integrated rather than “extra,” helping managers and teams adjust to shifting business needs.

AWS–MDEC Tech Alliance

At a national level, AWS and MDEC launched the Skills to Jobs Tech Alliance in October 2024, modernising curricula for 25,000 students across 24 institutions and focusing on software development, cloud support, and data analyst job families.

While aimed at future graduates, this initiative indirectly supports businesses by easing reskilling pressure and strengthening Malaysia’s digital talent pipeline.

Is Upskilling and Reskilling Only for Big Companies?

A common misconception is that these programs are only meant for big companies with large budgets and capital.

SMEs face tighter margins but that doesn’t mean they’re left out! In fact, SMEs stand to gain even more from strategic training because they cannot afford high turnover or constant external hiring.

• Cost-conscious strategies: Mid-sized firms like DKSH Malaysia have leaned on HR analytics to pinpoint which employees need upskilling the most, ensuring resources aren’t wasted.
  
  
• Government support: Many SMEs tap into HRD Corp levy programmes or MDEC initiatives to subsidise training, especially in digital skills.
  
  
• Incremental wins: Manufacturing SMEs adopting Industry 4.0 often start with targeted reskilling, retraining line operators into automation supervisors, instead of rolling out company-wide schemes.

“For small businesses running with 1-10 employees, you don’t need to be a corporate giant to invest in your workforce, you just need to prioritise what skills are needed.”

How to Upskill and Reskill Effectively

Industry Examples:

• Manufacturing: Upskill operators in automation dashboards, reskill some into robotics technicians or quality data analysts.
• Finance & Accounting: Upskill teams in e-invoicing systems and digital tax compliance tools, reskill clerks into financial data analysts or compliance specialists who can manage SST compliance.
• Retail: Upskill staff in e-commerce platforms, reskill cashiers into digital marketing or supply chain coordination roles.
• Technology: Upskill developers in emerging frameworks, reskill legacy IT staff into cloud, cybersecurity, or data roles.

How to Decide: A Practical Framework

Choosing between upskilling and reskilling isn’t a coin toss,  it’s about matching training to business reality. Here are six guiding questions every leader should ask:

1. Is The Disruption Incremental Or Structural?

• Gradual tweaks → upskill. New software rollouts, compliance updates, or workflow shifts? A short course or tool training usually does the trick.
• Radical shifts → reskill. If automation is about to replace an entire process, teaching staff a new spreadsheet shortcut won’t cut it. They’ll need whole new roles.

2. What skills will you need in 2–5 years?

• Run a skills-gap analysis: What roles will grow (data analysts, compliance officers), and which will shrink (manual clerks)? Soft skills would always be in demand.
• Balance short-term fixes with long-term planning.

3. What’s your time and cost horizon?

• Upskilling = quicker, cheaper wins. Micro-learning, workshops, certifications.
• Reskilling = longer, pricier but future-proof. More like an investment than an expense.

SMEs often lean on HRD Corp levy schemes for upskilling, while larger firms absorb the heavier reskilling costs.

4. Are Employees Ready For Change?

• Even the best programme fails if no one shows up.
  
• Gauge employee appetite for learning, surveys, pulse checks, or good old conversations with managers.

As we mentioned before, a Randstad survey showed 91% Malaysians want upskilling or reskilling opportunities. But enthusiasm drops if training feels irrelevant or disrupts their day job.

5. Can programmes be scaled?

• Start small with pilot cohorts.
• If it works, scale gradually, if not, tweak before rolling out across departments.

SMEs may trial upskilling with one team while corporates like Digi test wider “learning challenges” before making them company culture.

6. Does Training Align With Business Strategy?

• Training isn’t about ticking HR boxes.
• Link every programme to where the business is heading: digital expansion, regulatory compliance, or market growth.

“As HRD Corp Malaysia notes, training only works when it’s tied to strategy, otherwise it’s just another budget line.”

In summary: Use this framework like a traffic light. Small bumps in the road? Upskill. A complete road closure? Reskill. And if you’re not sure? Pilot, measure, and align with strategy before you spend big.

Who Should Decide on Upskilling vs Reskilling?

The decision doesn’t sit with one person alone, it’s a shared responsibility across leadership.

For SMEs, it’s often straightforward, the owner or director makes the choice. Larger organisations need a clear chain of command so budgets, messaging, and execution don’t get lost in the hierarchy.

C-Suite & Senior Leadership

• What they do: Define the strategic direction, digital transformation, automation adoption, or compliance goals.
• Why it matters: They approve budgets and set priorities. A CEO pushing a “digital-first” agenda signals that reskilling into data and cloud roles is non-negotiable.

HR & L&D Leaders

• What they do: Translate strategy into actual programmes. They run skills-gap analyses, pick training providers, and ensure compliance with schemes like HRD Corp.
• Why it matters: They decide if a department needs light-touch upskilling or full reskilling pathways.

Line Managers

• What they do: Spot real needs on the ground. They know which employees are struggling with new tools and who could handle bigger roles.
• Why it matters: Managers bridge policy and practice, they nominate who gets trained, and when.

Employees

• What they do: Bring motivation, career aspirations, and buy-in.
• Why it matters: The best-funded programme still fails without employee engagement. The messaging and reasoning must be strong.

In short:

• C-Suite sets the “why.”
• HR defines the “what” and “how.”
• Managers choose the “who.”
• Employees decide the “will it work.”

Conclusion: Finding the Right Mix

The smartest choice is rarely one or the other, it’s both.

In Malaysia, organisations that embrace upskilling and reskilling prove that learning is not only a retention strategy but a sign of strong leadership.

And here’s the overlooked advantage: training investments make compelling PR. They show commitment to people, future-readiness, and industry credibility. 

At Press, our Digital PR Services help companies turn workforce development into stories that build trust, attract talent, and establish authority. 

After all, why invest in ads when investing in your people can be the best PR your business can buy?

Now that’s a great sales pitch. So if you’re ready to position your workforce strategy as a business advantage, let’s turn your training investment into the story everyone else in your industry is talking about.

Disclaimer: All of the content was thoroughly fact-checked and verified by our editorial team to ensure accuracy, clarity, and reliability.