The Power of Upskilling in an Uncertain Economy
Uncertainty among CEOs is at the highest level since the financial crisis of the late 2000s.
Fear of international trade conflicts, intrusions on net neutrality, and general increases in regulation result in a record-high percentage of CEOs feeling pessimistic about the future.
In addition to geopolitical concerns, the growing global skill gap is also adding to overall uncertainty. The 23rd Annual Global CEO Survey from PwC predicts that 44% of unskilled jobs may be lost to Automation by the 2030s. At the same time, the demand for skilled workers is growing at an unprecedented rate and will be far less affected by automation.
This parallel effect of technological innovation on the jobs market means that a considerable part of the population will soon be unemployable even as highly-skilled positions go unfilled.
The solution? More and more CEOs are turning to upskilling of their existing workforce to secure a sustainable source of future labor.
In this post, we’ll take a look at what’s driving uncertainty about labor availability and how upskilling offers a sustainable solution.
Increasing Automation in 4IR
During the next 20 years, demand for labor will shift further in the direction of highly-skilled workers. Unskilled workers will simultaneously see a rapid decline in job availability.
By the 2030s, the effects of automation are predicted to impact those with lower levels of education far more severely than highly educated individuals.
- Early 2020s: 1% for low education, 3% for medium education
- Late 2020s: 19% for low education, 23% for medium education
- Mid-2030s: 44% for low education, 36% for medium education
What does this mean for the future of the workforce?
Employees entering the workforce today will be in their 40s and 50s by the onset of the 3rd wave of 4IR. In other words, an entire cohort will find themselves obsolete with decades to go before they retire.
Other Factors Driving Labor Uncertainty
Automation is one of the most significant factors driving the global skills gap, but it’s not the whole story.
Other factors are inadequate education infrastructure, barriers to mobility, and a population edging ever closer to retirement age.
What is more, “the International Monetary Fund’s latest estimates, world GDP grew by just 2.9 per cent last year — the weakest performance since the outright contraction in the depths of the global financial crisis in 2009 and far short of the 3.8 per cent pace of post-crisis recovery over the 2010–18 period.”
Decreasing Geographical Mobility
Tense geopolitical relations make moving between markets difficult at best.
Talent mobility is an essential consideration for organizations functioning in a global economy. There’s more to mobility than geographical location, but the ability for companies to move employees when needed makes talent allocation that much easier.
Reduced mobility impacts workers as much as companies. When it’s challenging to seek jobs across international borders, qualified workers may find themselves unable to take positions simply because of their current geographical location.
Decreasing Availability of Labor and an Aging Workforce
With unemployment in Organisation for Economic Co-operation and Development (OECD) countries at its lowest since the turn of the millennium, employees have more freedom to choose where they work based on more than just their paycheck.
An unemployment rate below 5.5% makes talent development among existing employees more of a challenge than ever.
To make matters worse, the average OECD population age has been steadily rising since the middle of the 20th century. According to the PwC report, over 16% of the population is currently over age 65.
An aging workforce compounds the skills gap because more people are retiring than are entering the labor force. Older workers are also less likely to be able to access education and training programs outside of work due to less-flexible scheduling.
Combating Uncertainty via Upskilling
Companies that have made significant progress in upskilling programs report feeling the most confident about the future in general.
Among employees, 77% say they would learn new skills to protect their job security. But only 33% of employees feel their current company is doing enough to offer lifelong learning opportunities.
In any case, upskilling is a path with a dual-benefits: in an uncertain scenery business models are deemed to change amidst technology changes; workers well equipped, with the necessary tool, will guide those organizations in an accurate direction. Whereas, companies that offer upskilling and reskilling opportunities will receive the best candidates available in the market, transforming learning in a significant advantage.
The combination of employee’s willingness to learn and the positive results seen by CEOS makes a strong argument for the power of upskilling. Implementing digital tools and carefully designed learning experiences is an effective path to resolving uncertainty over the future of the jobs market.
To learn more about how you can implement a digital upskilling program in your company, visit Capabilia today.