PwC’s latest Talent Trends 2019 report is launched as part of PwC’s 22nd Annual Global CEO Survey. The report has some really interesting data, which look at the issues around reskilling, upskilling and the future of work.
Key findings include:
• 79% of CEOs worry about the availability of Key Skills – it’s a ‘top 3’ concern for them.
• They say it’s stifling innovation and raising workforce costs more than they expected.
• In 2008, CEOs were struggling to find people with global experience. Today, organisations need tech-savvy leaders and employees.
• 46% of CEOs say their number-one priority is reskilling the workers they currently have – far ahead of the 18% who will focus on hiring from outside their industry or will look to strengthen ties with education (17%)
• But over half (55%) of business leaders haven’t yet created a clear narrative about the future of their workforce and automation
• A lack of data to inform workforce improvement strategies is still an issue — only 29% say the data they receive are adequate
• Business leaders aren’t clear on where the responsibility for workers displaced by automation and AI should fall. 56% believe that governments should provide a safety net for displaced workers
Top executives increasingly worry about the impact that their companies, strategies and activities will have on the environment, local communities and their employees — and how they can balance this with cost and market pressures and quarterly earnings targets. Against this background, one somewhat intractable challenge is beginning to stand out: the size and composition of the workforce. Automation, primarily in the form of robotics and artificial intelligence (AI), brings with it the promise of improved productivity and higher profits — but at what cost to employment and, by extension, to society?
What responsibility do corporations have to reskill employees who otherwise would be displaced by technology? And what value does reskilling offer an organisation?
These are precisely the types of questions that keep CEOs awake at night, according to PwC’s 22nd Annual Global CEO Survey. Four out of five CEOs bemoaned their employees’ lack of essential skills and identified this factor as a threat to growth. That concern has risen in line with the advent of new technologies over the past five years, and is voiced consistently across all regions: CEOs in Japan and Central/Eastern Europe are most worried, with 95% and 89%, respectively, naming it as a concern, whereas those in Italy (55%) and Turkey (45%) are the least anxious about it. The skills shortage stymies growth chiefly because it stifles innovation and raises workforce costs. There has been a clear shift over the past few years in the type of skills that leaders say they are looking for. In 2008, CEOs were struggling to find people with global experience.
Today, organisations desperately need tech-savvy leaders and employees. In other words, at every level of the hierarchy, people are needed who can harness innovative thinking, form the right strategies and apply the systems and tools that best fit the needs of the business.
Only then can an organisation, or an economy, maximise the productivity benefits of technology. Our recent study, preparing for tomorrow’s workforce, today, found that businesses also see the nurturing of human skills, particularly leadership, creativity, empathy and curiosity, as essential if they are to take advantage of the potential benefits of new technologies. As a result, although purely functional skills related to automation and AI are often essential for business growth, they are not enough; they won’t suffice without these more ‘high-touch’ managerial and people-oriented capabilities.
With the right skills in scarce supply, CEOs must find cost-effective ways of sourcing what they need. Previous surveys have shown CEOs exploring the idea of hiring people from other sectors — particularly from industries that are further along the innovation journey — and making use of ‘gig economy’ workers when appropriate. This year’s survey sees a shift. CEOs are now focused on reskilling and upskilling their existing workforce.
The World Economic Forum estimates that it will cost US$24,000 per head to reskill displaced US workers, but when set against the alternatives — severance payments for workers who are let go and the cost of finding new workers with indemand skills, amongst other things — reskilling is the more attractive option. It’s understandable that organisations are concentrating on reskilling. Given the right context, people can be highly adaptable, and the ability of organisations to harness that adaptability will be critical as the world of work evolves. The good news is that employees are more than willing to reskill. According to a PwC global survey of more than 12,000 workers, employees are happy to spend two days per month on training to upgrade their digital skills, if such training is offered by their employer.
Today’s jobs are being unbundled into tasks that could be offshored, automated, augmented with technology or rebundled into new roles as organisations analyse how work gets done. Automation and AI will inevitably displace some workers, although CEOs aren’t united on the scale or speed of that shift. Business leaders can’t protect outmoded jobs, but they are responsible for the people who hold those jobs. The process of effective reskilling, though, is anything but straightforward.
Most organisations’ current learning and development programmes are simply not designed for the full complexity of the task. Upskilling efforts must target fundamental skills gaps, instilling at least a baseline of digital acumen, with an eye towards building a flexible workforce for the future. Rather than classroom training exclusively, the programmes should focus on changing behaviours and mindsets on the job, encouraging people to innovate and solve problems in new ways.