Focusing on the future of global careers, ‘Mastering the Fourth Industrial Revolution’ was the topic of this year’s World Economic Forum’s Annual Meeting held in Davos. Cape Town-based Shanaaz Majiet, an expert leadership development coach and training facilitator, attended the event.
President Jacob Zuma led a South African delegation of Cabinet Ministers and business leaders at the 46th World Economic Forum (WEF) in Davos-Klosters, Switzerland in January. The World Economic Forum’s Annual Meeting once again brought together world leaders from business, government, international organisations, academia and civil society in Davos to discuss the global economy. This year’s theme was ‘Mastering the Fourth Industrial Revolution’.
This Fourth Industrial Revolution includes developments in previously disjointed fields such as artificial intelligence and machine-learning, robotics, nanotechnology, 3-D printing, and genetics and biotechnology, which will cause widespread disruption, not only to business models, but also to labour markets over the next five years, with enormous change predicted in the skill sets needed to thrive in the new landscape. This is the finding of a new report, The Future of Jobs, launched at the WEF.
The report is based on a survey of chief human resources officers and top strategy executives from companies across nine broad industry categories and covering 15 of the world’s largest economies. Together, these economies account for 65% of the global workforce. A major goal of the report is to analyse the impact of key drivers of change and provide specific information on the relative magnitude of these expected changes by industry and geography, and the expected time horizon for their impact to be felt on job functions, employment levels and skills.
The Future of Jobs Report is a first step in becoming specific about the changes at hand. It taps into the knowledge of those who are best placed to observe the dynamics of workforces—chief human resources and strategy officers—by asking them what the current shifts mean, specifically for employment, skills and recruitment across industries and geographies. In particular, the authors have introduced a new measure—skills stability—to quantify the degree of skills disruption within an occupation, a job family or an entire industry. They have also been able to provide an outlook on the gender dynamics of the changes underway, a key element in understanding how the benefits and burdens of the Fourth Industrial Revolution will be distributed.
Combined, net job growth and skills instability result in most businesses currently facing major recruitment challenges and talent shortages, a pattern already evident in the results and set to get worse over the next five years. The question, then, is how business, government and individuals will react to these developments. To prevent a worst-case scenario—technological change accompanied by talent shortages, mass unemployment and growing inequality—reskilling and upskilling of today’s workers will be critical. While much has been said about the need for reform in basic education, it is simply not possible to weather the current technological revolution by waiting for the next generation’s workforce to become better prepared.
Instead it is critical that businesses take an active role in supporting their current workforces through re-training, that individuals take a proactive approach to their own lifelong learning and that governments create the enabling environment, rapidly and creatively, to assist these efforts. In particular, business collaboration within industries to create larger pools of skilled talent will become indispensable, as will multi-sector skilling partnerships that leverage the very same collaborative models that underpin many of the technology-driven business changes underway today.
Additionally, better data and planning metrics, such as those in the report are critical in helping to anticipate and proactively manage the current transition in labour markets.
“The current technological revolution need not become a race between humans and machines, but rather an opportunity for work to truly become a channel through which people recognise their full potential. To ensure that we achieve this vision, we must become more specific and much faster in understanding the changes underway and cognizant of our collective responsibility to lead our businesses and communities through this transformative moment,” according to the report.
Disruptive changes to business models will have a profound impact on the employment landscape over the coming years. Many of the major drivers of transformation currently affecting global industries are expected to have a significant impact on jobs, ranging from significant job creation to job displacement, and from heightened labour productivity to widening skills gaps. In many industries and countries, the most in-demand occupations or specialties did not exist 10 or even five years ago, and the pace of change is set to accelerate. By one popular estimate, 65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.
In such a rapidly evolving employment landscape, the ability to anticipate and prepare for future skills requirements, job content and the aggregate effect on employment is increasingly critical for businesses, governments and individuals in order to fully seize the opportunities presented by these trend—and to mitigate undesirable outcomes.
Past waves of technological advancement and demographic change have led to increased prosperity, productivity and job creation. This does not mean, however, that these transitions were free of risk or difficulty. Anticipating and preparing for the current transition is therefore critical. As a core component of the WEF’s Global Challenge Initiative on Employment, Skills and Human Capital, The Future of Jobs project aims to bring specificity to the upcoming disruptions to the employment and skills landscape in industries and region—and to stimulate deeper thinking about how business and governments can manage this change. The industry analysis presented in the report will form the basis of dialogue with industry leaders to address industry-specific talent challenges, while the country and regional analysis presented in the Report will be integrated into national and regional public-private collaborations to promote employment and skills.
Two job types stand out due to the frequency and consistency with which they were mentioned across practically all industries and geographies. The first are data analysts, which companies expect will help them make sense and derive insights from the torrent of data generated by the technological disruptions referenced above. The second are specialised sales representatives, as practically every industry will need to become skilled in commercialising and explaining their offerings to business or government clients and consumers, whether due to the innovative technical nature of the products themselves, due to their being targeted at new client types with which the company is not yet familiar, or both.
Other new specialities frequently mentioned include new types of human resources and organisational development specialists, engineering specialities such as materials, bio-chemicals, nanotech and robotics, regulatory and government relations specialists, geospatial information systems experts and commercial and industrial designers. A particular need is also seen in industries as varied as energy and media, entertainment and information for a new type of senior manager who will successfully steer companies through the upcoming change and disruption. Once more, there is a gender gap dimension to these findings, as the growth of new and emerging roles in computer, technology and engineering-related fields is outpacing the rate at which women are currently entering those types of jobs—putting them at risk of missing out on tomorrow’s best job opportunities and aggravating hiring processes for companies due to a more restricted talent pool.
Skills stability
The accelerating pace of technological, demographic and socio-economic disruption is transforming industries and business models, changing the skills that employers need and shortening the shelf-life of employees’ existing skill sets in the process.
For example, technological disruptions such as robotics and machine learning—rather than completely replacing existing occupations and job categories—are likely to substitute specific tasks previously carried out as part of these jobs, freeing workers up to focus on new tasks and leading to rapidly changing core skill sets in these occupations.
Even those jobs that are less directly affected by technological change and have a largely stable employment outlook, say marketing or supply chain professionals targeting a new demographic in an emerging market, may require very different skill sets just a few years from now as the ecosystems within which they operate change.
Future workforce strategy
The impact of technological, demographic and socio-economic disruptions on business models will be felt in transformations to the employment landscape and skills requirements, resulting in substantial challenges for recruiting, training and managing talent. Several industries may find themselves in a scenario of positive employment demand for hard-to-recruit specialist occupations with simultaneous skills instability across many existing roles. For example, the mobility industries expect employment growth accompanied by a situation where nearly 40% of the skills required by key jobs in the industry are not yet part of the core skill set of these functions today.
At the same time, those workers in lower skilled roles, particularly in the office and administrative and manufacturing and production job families, may well find themselves caught up in a vicious cycle where low skills stability means they could possibly face redundancy without significant re- and upskilling, even while disruptive change may erode employers’ incentives and the business case for investing in such reskilling.
Not anticipating and addressing such issues in a timely manner over the coming years may come at an enormous economic and social cost for businesses, individuals and economies and societies as a whole.
Recognition of reskilling and retraining as a priority
Responses to The Future of Jobs Survey indicate that business leaders are aware of these looming challenges but have been slow to act decisively. Just over two thirds of their respondents believe that future workforce planning and change management features as a reasonably high or very high priority on the agenda of their company’s or organisation’s senior leadership, ranging from just over half in the basic and infrastructure sector to four out of five respondents in energy and healthcare. Across all industries, about two thirds of our respondents also report intentions to invest in the reskilling of current employees as part of their change management and future workforce planning efforts, making it by far the highest-ranked such strategy overall. However, companies that report recognising future workforce planning as a priority are nearly 50% more likely to plan to invest in reskilling than companies who do not (61% against 39% of respondents).
Respondents’ expectations about future skills requirements also provide a relatively clear indication of where such retraining efforts might be concentrated in the most effective and efficient way. The report categorises work-relevant skills into abilities, basic skills and cross-functional skills, with particularly strong demand growth expected in certain cross-functional skills, cognitive abilities and basic skills such as active learning and ICT.
Recommendations for action
While the implications of accelerating disruptive change to business models are far-reaching, even daunting, for employment and skills, rapid adjustment to the new reality and the opportunities it offers is possible, provided there is concerted effort by all stakeholders. For government, it will entail innovating within education and labour-related policy making, requiring a skills evolution of its own. For the education and training sector, it will mean vast new business opportunities as it provides new services to individuals, entrepreneurs, large corporations and the public sector. The sector may become a noteworthy new source of employment itself. For businesses to capitalise on new opportunities, they will need to put talent development and future workforce strategy front and centre to their growth.
Firms can no longer be passive consumers of ready-made human capital. They require a new mind-set to meet their talent needs and to optimise social outcomes. This entails several major changes in how business views and manages talent, both immediately and in the longer term. In particular, there are four areas with short-term implications and three that are critical for long term resilience.
Immediate focus
Reinventing the HR Function: As business leaders begin to consider proactive adaptation to a new talent landscape, they need to manage skills disruption as an urgent concern. They must understand that talent is no longer a long-term issue that can be solved with tried and tested approaches that were successful in the past or by instantly replacing existing workers. Instead, as the rate of skills change accelerates across both old and new roles in all industries, proactive and innovative skill-building and talent management is an urgent issue. What this requires is an HR function that is rapidly becoming more strategic and has a seat at the table—one that employs new kinds of analytical tools to spot talent trends and skills gaps, and provides insights that can help organizations align their business, innovation and talent management strategies to maximise available opportunities to capitalize on transformational trends.
Making Use of Data Analytics: Businesses will need to build a new approach to workforce planning and talent management, where better forecasting data and planning metrics will need to be central. Earlier mapping of emerging job categories, anticipated redundancies and changing skills requirements in response to the changing environment will allow businesses to form effective talent repurposing strategies within their company, their own industry and across industries. HR has the opportunity to add significant strategic value in predicting the skills that will be needed, and plan for changes in demand and supply. To support such efforts, the Forum’s Future of Jobs project provides in-depth analysis on industries, countries, occupations and skills, and offers confidential benchmarking to interested companies vis-à-vis their industry’s results.
Talent diversity—no more excuses: As study after study demonstrates the business benefits of workforce diversity and companies expect finding talent for many key specialist roles to become much more difficult by 2020, it is time for a fundamental change in how talent diversity issues—whether in the realm of gender, age, ethnicity or sexual orientation—are perceived and well-known barriers tackled. In this area, too, technology and data analytics may become a useful tool for advancing workforce parity, whether by facilitating objective assessment, understanding typical careers paths and cliffs, identifying unconscious biases in job ads and recruitment processes or even by using wearable technologies to understand workplace behaviours and encourage systemic change.
Leveraging flexible working arrangements and online talent platforms: As physical and organisational boundaries are becoming increasingly blurred, organisations and businesses are going to have to become significantly more agile in the way they think about managing people’s work and about the workforce as a whole. Work is what people do and not where they do it.
Engagement
Businesses will increasingly connect and collaborate remotely with freelancers and independent professionals through digital talent platforms.
Modern forms of association such as digital freelancers’ unions and updated labour market regulations will increasingly begin to emerge to complement these new organisational models. For policy makers, an important set of regulations concerns the portability of safeguards and benefits between jobs and the equivalent treatment in law of different forms of labour and employment types.
Longer-term focus
Rethinking education systems: By one popular estimate 65% of children entering primary schools today will ultimately work in new job types and functions that currently don’t yet exist. Technological trends such as the ‘Fourth Industrial Revolution’ will create many new cross-functional roles for which employees will need both technical and social and analytical skills. Most existing education systems at all levels provide highly siloed training and continue a number of 20th century practices that are hindering progress on today’s talent and labour market issues. Two such legacy issues burdening formal education systems worldwide are the dichotomy between Humanities and Sciences and applied and pure training, on the one hand, and the prestige premium attached to tertiary-certified forms of education—rather than the actual content of learning—on the other hand. Put bluntly, there is simply no good reason to indefinitely maintain either of these in today’s world. Businesses should work closely with governments, education providers and others to imagine what a true 21st century curriculum might look like.
Incentivising lifelong learning: The dwindling future population share of today’s youth cohort in many ageing economies implies that simply reforming current education systems to better equip today’s students to meet future skills requirements—as worthwhile and daunting as that task is—is not going to be enough to remain competitive. Ageing countries won’t just need lifelong learning, they will need wholesale reskilling of existing workforces throughout their lifecycle. Governments and businesses have many opportunities to collaborate more to ensure that individuals have the time, motivation and means to seek retraining opportunities. For example, Denmark allocates funding for two weeks’ certified skills training per year for adults, and the strong emphasis the country places on in-work training helps explain its very high degree of employment mobility, with 70% of workers considering mid-career transitions a ‘good thing’, compared to 30% or less in most other European countries. At the company-level, technology can be continuously leveraged to upskill and re-skill employees.
Cross-industry and public-private collaboration: Given the complexity of the change management needed, businesses will need to realise that collaboration on talent issues, rather than competition, is no longer a nice-to-have but rather a necessary strategy. Businesses should work with industry partners to develop a clearer view on future skills and employment needs, pooling resources where appropriate to maximise benefits, and work more closely with governments to map a future view of skill demand versus supply. Resources should then be put into place regionally to upskill those out of work to fill high priority employment gaps. Such multi-sector partnerships and collaboration, when they leverage the expertise of each partner in a complementary manner, are indispensable components of implementing scalable solutions to jobs and skills challenges. While a single business can form one-to-one partnerships for its own talent needs, partnerships between multiple businesses, educational institutions and accreditation providers can result in an overall increase in the quality of the talent pool, at lower costs and with greater social benefits. Businesses also need to engage with governments on strategically redeploying redundant skills between sectors, addressing cost concerns and social stability.
In a nutshell
What does this all mean? We must collectively demonstrate a greater sense of urgency in getting ready for the shifts to come. This article did not delve into the industry Gender Gap, as this topic deserves in-depth discussion in a separate follow-on article. The moral case for gender equality has, in the most part been won. The business and economic case is also increasingly understood. The Fourth Industrial Revolution now represents an unprecedented opportunity to place women’s equal participation in the workplace at the heart of preparations for the shifts to come
