When Standard Chartered redeployed an existing employee from a “sunset” job, or a job that was going away, to a “sunrise” job, a new emerging role, it cost the bank $49,000 less than hiring externally.

Yet too often, when we hear executives talk about ushering in a new era of work and jobs with AI, they focus on two things: job cuts and hiring new digitally-savvy talent. Neither is the best play. Instead, they should consider transforming the workforce they already have, not just the jobs and the work.

This matters more than you think

Yes, AI will change how work gets done and maybe the skills you need. But not all skills are created equal. Technical skills—the ones most susceptible to AI disruption—can be taught relatively quickly or learned on the job. The skill of operating in your organization’s context is far harder to replace or teach – the know-how that makes someone effective in your culture, with your systems, your routines, your unwritten rules. It is this contextual intelligence your workforce already possesses that makes your company your company, not a generic operation running the same AI tools as everyone else.

When you hastily dismantle teams because a role looks out of date, you risk losing this institutional knowledge. And you tend to lose it precisely when you need it most—when procedures break, systems glitch, or work goes off script.

The skill adjacency play

Before you remove people from your org chart, consider a different question: what adjacent capabilities does this talent already have? What training would move them into a role that is more data-intensive, more AI-enabled, or more customer-facing?

Too often, organizations make people decisions without mapping these adjacent skills. That’s short-sighted. Your future workforce may already be sitting on the payroll—you just haven’t looked.

The real cost of external hiring

Companies that reflexively turn to the open market are paying a price they haven’t calculated. Ramp-up time for complex roles in difficult-to-navigate organizational cultures can stretch to 24 months. That’s a costly disruption that most finance teams aren’t modeling. Many roles live in messy domains with inherent variability. Having a workforce that already has the judgment to navigate your culture is essential.

The retention dividend

There’s a behavioral component too. Employees who get meaningful opportunities to upskill are more loyal and engaged. When surveyed, 63% of employees said, hypothetically, they’d trade a 10% pay raise for opportunities to upskill in AI and digital skills. The desire is there.  

And research shows that many of the skills companies will need for AI-enabled work already exist—embedded in the people already on your payroll.

Upskilling shouldn’t be a line item in HR’s budget. It should be reframed as a key dimension of retention strategy—and treated as such.

With focused reskilling and deliberate on-the-job learning, today’s employees become tomorrow’s advantage. You preserve institutional knowledge while accelerating productivity and innovation.

The firms that will thrive are the ones that treat their workforce as a portfolio of skills to be cultivated and thoughtfully deployed alongside AI. Make the deliberate investment now, and you’ll avoid the far greater cost of rebuilding critical capabilities later.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

Ravin Jesuthasan is the global leader of Mercer’s Transformation Services business and an Executive Fellow at the Kellogg School of Management at Northwestern University. Tauseef Rahman is Mercer’s US Workforce Rewards Solutions Leader.