The Labor Day holiday had me reflecting on the future of work. Dramatic changes are forecasted by McKinsey, Korn Ferry and other prognosticators. As is often the case, futurists make predictions of trends that have already begun. In many ways the future of work is now. Unfortunately, the research suggests most companies are slow to evolve. They are not training their workforces adequately, and they are worried about finding the talent with the necessary technical, analytical, and creative skills. Organizational caution may be the harbinger of failure.
McKinsey defines the future of work as “an informed perspective on what businesses and other organizations need to know about how work could shift (given digitization and other trends), plus how workforces and workplaces can prepare for those changes, big and small.”
The World Economic Forum released in April The Future of Jobs Report 2023. The report brings together the perspective of 803 companies – collectively employing more than 11.3 million workers – across 27 industry clusters and 45 economies from all world regions. The Survey covers questions of macrotrends and technology trends, their impact on jobs, their impact on skills, and the workforce transformation strategies businesses plan to use, across the 2023-2027 timeframe.
Training for the future of work is inadequate
Most alarming for me is the prediction by the World Economic Forum that 44 percent of workers’ skills will be disrupted in the next five years. And six in 10 workers will require training before 2027— but only half of workers are seen to have access to adequate training opportunities today.
According to the World Economic Forum, the highest priority for skills training from 2023-2027 is analytical thinking, which is set to account for 10 percent of training initiatives, on average. The second priority for workforce development is to promote creative thinking, which will be the subject of eight percent of upskilling initiatives. Training workers to use AI and big data ranks third among company skills-training priorities in the next five years and will be prioritized by 42 percent of surveyed companies. Employers also plan to focus on developing worker’s skills in leadership and social influence (40 percent of companies); resilience, flexibility, and agility (32 percent); and curiosity and lifelong learning (30 percent). Two-thirds of companies expect to see a return on investment in skills training within a year of the investment, whether in the form of enhanced cross-role mobility, increased worker satisfaction or enhanced worker productivity.
The human-machine transition is dramatically lower (only one percent) than what was predicted in 2020.
The second most interesting finding from the Future of Jobs Report 2023 is that the human-machine frontier has shifted, with businesses introducing automation into their operations at a significantly slower pace than previously anticipated, from 47 percent to one percent.
Technology adoption will be a key driver in business transition
The report predicts that technology adoption will remain a key driver of business transformation in the next five years. The report notes the following changes with technology:
More than 85 percent of organizations surveyed identify increased adoption of new and frontier technologies and broadening digital access as the trends most likely to drive transformation in their organization. Broader application of Environmental, Social and Governance (ESG) standards within their organizations will also have a significant impact. The next most-impactful trends are macroeconomic: the rising cost of living and slow economic growth. The impact of investments to drive the green transition was judged to be the sixth-most impactful macrotrend, followed by supply shortages and consumer expectations around social and environmental issues. Though still expected to drive the transformation of almost half of companies in the next five years, the ongoing impact of the COVID-19 pandemic, increased geopolitical divisions and demographic dividends in developing and emerging economies were ranked lower as drivers of business evolution by respondents.
Within technology, big data, cloud computing and AI feature highly on likelihood of adoption. More than 75 percent of companies are looking to adopt these technologies in the next five years. The data also shows the impact of the digitalization of commerce and trade. Digital platforms and apps are the technologies most likely to be adopted by the organizations surveyed, with 86 percent of companies expecting to incorporate them into their operations in the next five years. E-commerce and digital trade are expected to be adopted by 75 percent of businesses. The second-ranked technology encompasses education and workforce technologies, with 81 percent of companies looking to adopt these technologies by 2027. The adoption of robots, power storage technology and distributed ledger technologies rank lower on the list.
The impact of most technologies on jobs is expected to be a net positive over the next five years. Big data analytics, climate change and environmental management technologies, and encryption and cybersecurity are expected to be the biggest drivers of job growth. Agriculture technologies, digital platforms and apps, e-commerce and digital trade, and AI are all expected to result in significant labor-market disruption, with substantial proportions of companies forecasting job displacement in their organizations, offset by job growth elsewhere to result in a net positive.
Let me offer an example of labor savings with agriculture technologies. While visiting my cousin’s dairy farm in Waverly Minnesota this July, I was amazed to watch totally automated milking, feeding, barn cleaning, and manure collection and distribution operations for more than 340 cows totally done with automation and robots. A human does not need to touch a cow for anything. Back rubbing stations on are available to the cows, who sleep on hay covered air-mattresses in a temperature-controlled barn to mitigate the extreme weather conditions in Minnesota. The collected manure is used as fertilizer on the corn the cows eat. The storing of harvested corn is the only remaining manually intensive chore on the farm. According to my cousin the return on investment comes from reduced farm labor and improved milking productivity from the cows.
Respondents’ express confidence in developing their existing workforce despite being off to a slow start. However, they are less optimistic regarding the outlook for the availability of talent in the next five years. Accordingly, organizations identify skills gaps and an inability to attract talent as the key barriers preventing industry transformation. In response 48 percent of companies identify improving talent progression and promotion processes as a key business practice that can increase the availability of talent to their organization, ahead of offering higher wages (36 percent) and offering effective reskilling and upskilling (34 percent).
The Future of Work is here and accelerating. Are you preparing your workforce to be competitive?
About Victor Assad
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and Managing Partner of InnovationOne, LLC. He works with organizations to transform HR and recruiting, implement remote work, and develop extraordinary leaders, teams, and innovation cultures. He is the author of the highly acclaimed book, Hack Recruiting: The Best of Empirical Research, Method and Process, and Digitization. He is quoted in business journals such as The Wall Street Journal, Workforce Management, and CEO Magazine. Subscribe to his weekly blogs at http://www.VictorHRConsultant.com