The workforce is changing, the skills required are changing, automation is eliminating jobs, and there is a shortage of knowledge workers across industries. We’ve all seen these headlines and many more that discuss how technology is reshaping today’s workforce. And a trend coming to the forefront is retraining employees to handle new roles.
It’s harder than ever to predict where a company is going to be in five years. Many of the roles companies will need to fill don’t exist yet. The pace of change is too fast for companies, governments, or other organizations to predict and support. In the past, CEOs might look to other companies to fill gaps in their workforce. But as some skill sets become harder to find, looking externally can take a long time and the chances of getting the right person for your culture are fifty-fifty at best.
The most recent PwC Talent Trends report notes that 80% of CEOs are concerned their employees’ do not have the correct skills to power company growth. “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 focussed on reskilling and upskilling their existing workforce.”
According to the World Economic Forum, 95% of employees who will be displaced over the next decade could be retrained at an average cost of $24,000 per person. If that seems like a high number, consider the other option, which includes severance, search, training, and related costs. And those costs don’t account for the institutional knowledge and culture impact of turning over part of your workforce.
PwC also found that employees are open to retraining if it is offered by their employer. Many of the skills can be learned and much of today’s workforce realizes the need for continuous learning. In addition to the ‘hard skills’, the C-suite should also consider the soft skills that employees have as they consider who would be a good candidate for specific roles. The World Economic Forum notes that 35% of today’s essential skills will change in the next five years, but the soft skills are here to stay.
According to the PwC study, Preparing for tomorrow’s workforce, today, “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.”
While retraining employees is a cost effective option that employees are embracing, it is still a difficult path to navigate. To that end, PwC offers five recommendations for CEOs:
- People-related analytics must improve. CEOs are desperate for data on the views and needs of their people. The quality and comprehensiveness of data about employee activity is a long-running problem that urgently must be addressed.
- Business leaders need to be much clearer about their reskilling strategy and what that really means for their workforce. Clichéd generalisations about the importance of reskilling will be quickly exposed. Workers expect honest answers about their future.
- The external narrative will be equally important. Business leaders need to clearly explain to their external constituents how they will balance the right level of productivity with the need to build trust with society over the longer term.
- Reskilling is only part of the story. It’s more important than ever that organisations create a workplace where people want, and not just need, to work each day.
- A changing workplace needs a new approach to workplace management. The way in which people are measured, incentivised and rewarded will have to change. Investment in workforce transformation is more likely to pay dividends if it inspires, rather than demands, the right behaviours.
Technology is not going to slow down, and retraining employees is going to be an ongoing challenge. The state of California just launched a commission on the future of work, AT&T has invested more than $250 million on education and professional development programs, Cognizant received a nine figure grant to support workers and students in upskilling, and Amazon has publicly announced they will retrain 100,000 employees over the next six years at a cost of $700 million.
If you’d like to discuss your current skills shortage and programs for retraining employees, send us a note.