Skills Revolution: Reasons To Invest Towards A Highly Skilled Workforce

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The emergence of a Skills Revolution is the ushering in of an era where helping people upskill and adapt to a fast-changing world of work will be a defining challenge of the time. Manpower defines this as the commencement of a Human Age. In this phase, people with the right skills will increasingly call the shots, create opportunities and choose how, where and when they work. Those without it will look to the future and not be able to see how their circumstances will improve.

The rate of technological advancement or globalization is increasing at an unprecedented rate. This generates a crucial need for the leaders to be responsive and responsible. Investing in employees’ skills to increase the resilience of organizations is necessary to ensure we have a workforce with the skills required for the future. The polarization of the population that is playing out right in front of our eyes is no good for the society or for the business. We need aggressive workforce development to address the widening gap between the Haves and the Have Nots.

Here’s a closer look at the macro economic forces defining the Skills Revolution and importance of a skilled workforce:

Disruption of Pre-existing Business Models

Due to the confluence of digitization, machine learning, aging and shifting populations, polarization, consumerization and alternative ways of working, business models are transforming. The first phase of this transformation has manifested itself in the form of competition between new business models and traditional businesses.

Agility and performance today are critical. Technology is transforming the need for physical infrastructure and assets, enabling organizations to create value through capture, analysis, and exchange of vast amounts of data. Interactions and information can now bring together producers and consumers in exchanges that create value for both and competitive advantage for the platform business.

Trusted brands with little need to advertise and an easy to use interface can move into new markets overnight: logistics, groceries, music and more. This allows loyal consumers a greater ease of consumption and innovation and mighty platforms an exponential ability to create greater value out of an existing value chain and the ability to dominate the purchasing environment.

This, in turn, upsets the old models of business, out-competes them and in some cases, leads to their complete extinction, restricted by their ability to contend with lower prices, greater choices and online convenience. Bookstores, video stores, taxi companies and travel agents are casualties of the same. Sectors like logistics are ripe for disruption and may decelerate in anticipation of supersize newcomers.

non-asset intensive platforms

Organizations need to be nimbler than ever in this environment of heightened risk and compressed margins. The move to non-asset intensive platforms with access to people, reach and value creation will define success. Hence, finding the right balance of technology, talent and human connection is vital for businesses to succeed in the Human Age.

Shifting Demographics

Across the globe, populations are aging while tax-paying talent pools are shrinking. In Germany, more than a fifth share of the populace will be over 65 by 2020, and in Japan – the world’s oldest country – 25 percent of people are already 65 or over and are expected to reach 35 percent by 2040. Hence, the mobility of talent is becoming increasingly significant for businesses, particularly the shortage sectors like construction, healthcare and cyber, to ensure continuous growth and evolution.

The shock of the Brexit vote, the unprecedented U.S. Presidential election campaign, and surprise result, together with the rising popularity of the far right or left reinforces the emergence of a “bubblized society” made up of groups that share common realities, perceptions and beliefs. To enable their commercial success in this ever altering society, business owners will need to take individual responsibility as change agents to build trust, demonstrate that they are shaping a better future and be in touch with the people they employ and the communities in which they operate.

These shifting demographics necessitate business leaders to be responsive and make it clear that all talent is valued in their organizations and that they will not stop welcoming the people they need to remain competitive. Companies with a culture of conscious inclusion will be able to fill their talent pipeline, progress women into senior positions, and fare best in the Human Age.

Greater Individual Choice

Sharing economy platforms such as Uber, Lyft, TaskRabbit, Upwork and have become increasingly visible to consumers and turned attention to the uberization of work. Full-time permanent work is in decline and having one Job for Life is rapidly becoming a thing of the past. One-third of workers today are Continuous Candidates, keen to advance their career and update their skills by changing jobs frequently in order to stay relevant and employable and to achieve career security rather than job security.

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Due to the rise of the Gig Economy, employers will be increasingly challenged to attract people who do not want to be hired as traditional employees, while those with in-demand assets will have the greatest control. In the Human Age, individuals will increasingly choose new ways of working to suit their needs and enable One Life that blends work and home. To attract and retain the best talent, business owners will need to be more transparent about what they can offer existing employees and new recruits beyond a paycheck.

Technological Revolution

There is no denying the fact that digitization, robotics, artificial intelligence and virtual reality are impacting the workplace. However, most businesses have adapted to the evolution of the labor market before – from tellers to customer services, typists to word processors and personal assistants – disrupting, destroying, redistributing and recreating work is nothing new. The difference now is that the life cycle of skills is shorter than ever and change is happening at an unparalleled scale. The impact may well be hyperinflated today, but as the cost and complexity of implementing technology lowers, the pace is set to accelerate.

As the Fourth Industrial Revolution takes hold, manufacturing today witnesses the greatest technological disruption across all verticals. Total employment has declined while output has skyrocketed. Between 1990 and 2014, manufacturing’s share of total employment fell across almost all advanced economies – Japan (-34 percent), France (-33 percent), United States (-31 percent) and Germany (-25 percent). And, digitization is by no means reserved for manufacturing and factory workers – white collar work is being transformed too.

However, most employers are still hesitant to enclasp automation and reduce their human resources quantitatively. This is because new technologies can be expensive and require people with specialist skills. Human sentiment and anxiety also add much more blockers to its progress than technophiles care to admit. Of more than 18,000 businesses across 43 countries, 62 percent do not expect automation or digital technology to impact headcount in the next two years, and 20 percent expect automation to increase hiring levels.

But, businesses are also anticipating the change: nearly two-thirds are investing in internal training to keep skills up to date, 42 percent are recruiting additional skill sets rather than replacing their workforce and more than a third are easing the transformation by bringing in contractors or third parties to transfer expert skills to their own workforce.

The advent of technology will tap into human potential leading to the development of skills such as creativity, people management, emotional intelligence and negotiation allowing people to augment robots, rather than being replaced by them. Employers will increasingly feel the need to upskill and diversify into new areas. Skills adjacency, agility and learnability – having the desire and ability to learn new skills to become and stay employable throughout long career journeys – will be crucial.

Those organizations that can blend the right combination of people, skills and technology are the ones that will win. To achieve this, businesses will need to invest more in training and development to address today’s talent shortages and anticipate the demands of tomorrow. Employability – the ability to gain and maintain a desired job – will no longer depend on what you already know, but on what you are likely to learn.

Rise of Customer Sophistication

Talent destinations are constantly changing. Globally, Easternization is reorienting economic power from West to East. Manpower Group’s TAPFIN labor market ranking of 2016, based on more than 50 criteria –  including talent availability, cost efficiency, productivity and the regulatory environment – found that the top five destinations to do business in were New Zealand, Singapore, the Philippines, Israel and India.

These competitive forces are also changing the value of scale. The ever evolving technology not only allows small companies to scale at speed and shift the power but also creates opportunities for large companies to swiftly supersize if they are nimble and prepared to innovate. Combined with the rise of odd-couple partnerships, co-opetition and third-party relationships, companies can now find new ways to focus on core business, share costs and operate more efficiently.

Hence, choosing where to locate, source and hire a global workforce with in-demand skills currently depends on more variables and fewer constants than ever. Companies will be increasingly tapping into alternative work arrangements to acquire in-demand skills that meet vital and fast-changing capabilities.

Entire teams of non-permanent business critical skills will increasingly be the norm as innovative organizations realize that workforce composition no longer divides easily between traditional employment and alternative models. Businesses will need to use new Total Talent Management strategies to get a good view of how productive and engaged their contingent workers are.

These were a few key factors that highlight the importance of a skilled workforce. To assimilate new employee engagement, training and retainment tools for your business, consult our experts today.

You can refer to our complete report on the emergence of skills revolution to learn more about its impact on the future economy.

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