Upskilling vs. Hiring: Why Businesses Should Invest in Developing Talent
June 5, 2025 10:34 amUpskilling vs. Hiring: Why Businesses Should Invest in Developing Talent
A common question businesses often ask themselves is, should we be upskilling our employees or hiring new talent?
In this article, we’ll explore why prioritising the upskilling and development of your current employees often brings greater long-term value than relying solely on external hiring. This includes examining the financial implications, cultural impacts, and strategic advantages of building from within, and understanding why more businesses are choosing to invest in their people.
The cost savings of upskilling
As a business leader or HR professional, you probably already know that hiring new employees is costly, but do you have a clear picture of how those costs stack up against the investment in upskilling your existing team?
Hiring new employees may seem like the fastest way to fill a gap, but it comes with a price. According to Pareto’s ‘Hiring Talent vs Upskilling Employees’ article, the average cost of hiring a new employee in the UK is around £3,000, factoring in advertising, recruiter fees, interview time, onboarding, and early-stage training. But then if the new hire leaves within the first year, these costs multiply quickly.
Upskilling your current employees is a more cost-effective alternative due to:
- No recruitment fees
- Faster progress due to familiarity with company systems and culture
- Reduced turnover due to increased job satisfaction
- Lower long-term training costs, especially when using programmes like apprenticeships
Better still, UK businesses can take advantage of the Apprenticeship Levy and government funding to cover the majority of training costs. This makes upskilling not only a smart financial decision, but also an accessible and highly cost-effective way to develop talent from within.
What other benefits does a business gain by investing in talent development?
1. Increased loyalty and engagement
Employees who are given opportunities to grow and develop feel more valued and motivated.
According to LinkedIn’s Workplace Learning Report, 94% of employees have stated they would remain with a company longer if they had a clear learning and development strategy.
When people feel like their employer is invested in them, they are more likely to invest their energy, skills, and creativity back into the business.
2. Reducing turnover and improving retention
Replacing an employee can cost up to 30% of their annual salary. Worse still, constant turnover disrupts team dynamics and can affect morale across the organisation.
Upskilling helps reduce this risk by giving employees a clear path for progression. People are far less likely to seek opportunities elsewhere when they feel they can advance where they are.
In contrast, external hires cost 18% more than internal hires, and are 21% more likely to leave during the first year.
3. Building a stronger organisational culture
A company’s culture is one of its most valuable assets and can take years to build. Upskilling plays a vital role in reinforcing and ultimately strengthening this culture as it’s about mindsets and behaviours which helps drive performance.
By investing in your existing workforce, you create a positive, continuous learning environment where development is part of the everyday employee experience.
On the other hand, bringing in external hires, while sometimes necessary, can introduce cultural challenges. New employees need time to adapt to the way your organisation operates, and not every new hire will be a perfect cultural fit. This can lead to inconsistency and make it harder to maintain a clear direction.
The long-term value of upskilling
While hiring might meet an immediate need, it’s rarely a long-term solution. Upskilling, however, is a strategic investment that creates a workforce capable of evolving with the business.
Ultimately, developing your current employees builds a workforce that can take on new challenges without relying on constant external recruitment, which is costly, time-consuming, and often less effective.
Why The Apprenticeship College is your partner in upskilling
At The Apprenticeship College, we specialise in helping businesses unlock the full potential of their people. We offer a wide range of apprenticeship and upskilling programmes tailored to modern workplace needs, including:
Our team works closely with employers to design and deliver training that aligns with your business objectives and culture.
Whether you’re looking to build leadership capability, close skill gaps, or drive innovation, we’re here to help you succeed.
Let’s discuss your requirements
Hiring may seem like a quick solution, but it often comes with hidden costs, increased risk, and short-term thinking.
Upskilling your current workforce, on the other hand, offers a more cost-effective, culturally aligned, and future-ready approach.
For sustained growth and success, investing in the development of your existing talent is one of the best strategies a business can adopt!
At The Apprenticeship College, we help your people gain the skills and confidence to lead change, boost performance, and drive real results.
Get in touch to see how we can help