It is time to take action

Eric D. Beinhocker writes in his book The Origin of Wealth: Evolution, Complexity, and the Radical Remarking of Economics that, “over 97 percent of humanity’s wealth was created in just the last 0.01 percent of our history.” It is not until 250 years ago that humankind began to evolve into more prosperous and dynamic societies which offer an extraordinary variety of services. [1] Today our economic wealth is still growing, and the speed of this process has even been accelerated by the digitalization and automation of the 21st century.

A positive consequence of this development is the high standard of living provided by the increased productivity. However, we also need to live with the potentially negative consequences, which are challenging the security of our jobs. With the prospect of self-driving cars, how many drivers will remain employable in the next 5-10 years? When automated factories are combined with AI technology, how can workers keep up with the new skills required to complete their tasks?

In today’s world, quick and drastic changes make the promise of life-long security impossible. Powerful technology and automation pose a threat in almost every corner of business. Leaving us asking ourselves the question: will I still be employable in 10 years? The good news is that our jobs aren’t disappearing, they are changing. Still, in the era of digitalization and automation, our workforce constantly needs to keep reskilling and upskilling in order to stay up to date. It is time to take action.

More effort is required

Corporations are increasingly discussing to foster a learning culture environment. Bersin by Deloitte report that organizations with a strong culture of learning are 92% more likely to innovate, they enjoy 37% greater employee productivity and are 58% more prepared to meet future demand. [2]

Stories such as Starbucks’ partnership with a local university to offer its employees an online college degree program are becoming more frequent. Jeff Bezos describes Amazon’s Career Choice program as follows: “For hourly associates with more than one year of tenure, we pre-pay 95 percent of tuition, fees, and textbooks (up to $12,000) for certificates and associate degrees in high-demand occupations”. [3]

In most of the cases, programs like these are only available in large international corporations with substantial financial capabilities. What about the workers in small and median sized companies who are not provided with these opportunities? Randstad’s Workmonitor survey indicates that more than one-third of American workers have not taken any steps to develop new skills within the past year. While it is sensible to expect employees to maintain up-to-date job skills and to actively seek training opportunities, this responsibility clearly shouldn’t fall solely on the individual’s shoulders. [4]

Barriers stopping companies  

Companies have long been aware of the urgency to increase investment for reskilling and upskilling. In this issue, companies could potentially take the lead instead relying fully on governments. But what are the main barriers stopping them from taking action?

According to a recent McKinsey Global Institute report, rethinking and upgrading the current HR infrastructure is considered a priority by 1/3 of the respondent executives. In the US 42%, in Europe 24%, and in the rest of the world 31% of executives believe reskilling and upskilling is a primary concern. However, many companies lack the knowledge of how jobs are going to change, and they are struggling to figure out how digitalization and/or automation is going to change the future skill set needs. This unpredictability makes it hard to foresee which kind of talent they will be needing in the next five to ten years. Of the private-sector business leaders, only 16% have the confidence that they will be able to meet the future potential skill gaps on a large scale. [5]

Small to medium sized companies, as mentioned before, are lacking the capabilities to provide their employees with the necessary training, mostly due to financial inability. For many of them, there aren’t any extra resources available for planning and managing training programs. Even if some of them do offer such opportunities, they are confronted with a bigger risk, for well-trained employees might choose to leave for better employers. 

As stated in the end of the McKinsey Global Institute report, the willingness of the large companies and senior executives to meet challenges lying ahead is strong despite obstacles. However, neither large corporations nor small to medium sized companies should be left alone in this matter, it is important to discuss the role of governments regarding the issue. 

Closing the skill gap is an ecosystem task

Most job trainings are acquired on the job and some job positions are so unique that one cannot receive the right training from any institutional organization. Therefore, it would be efficient for governments to team up with companies to understand and identify skill gaps and to design and conduct training programs, thus preparing the workforce with position-ready skill sets. 

Countries such as Germany and Switzerland attach great importance to their vocational training and apprenticeship models. Their outcome in procuring adult technical skills has shown great success and should be adjusted and expanded to an even larger scale. [6] There are several reasons why this model is especially significant today:

Firstly, due to the frequent updates of technology, the required skills for the jobs have to change more often than before. The model allows the workforce to learn on the job, which will notably minimize the skill gaps. Secondly, the Generation Z born in 1995 and onward have a more practical approach when it comes to education. They adapt to the economics of education and work, measuring their return on investment when choosing what and where to learn. [7] Therefore, the advantage of vocational education and learning while earning matches the learning attitude of today’s generation. Not to mention the economic benefit of having lower youth unemployment rates.   

Low-skilled workers are often left behind by corporate trainings and are most likely to be affected by automation. To solve this issue, governments can provide subsidies to corporation programs to further educate the lower skilled workers. Governments need to ensure a broad-based reskilling, including bringing together different parties such as community colleges and social organizations to provide resources for the vulnerable and disadvantaged groups, such as people with disabilities, single mothers, and refugees. Small to medium sized companies should also be given some degree of financial support when conducting employment training programs. Financial supports could, for instance, come in the form of income tax deductions or public grants to subsidize trainings. [6]

The government of Singapore has taken the step ahead of many others. Singapore has been offering an outstanding program aiming to promote a culture and overall system of lifelong learning and skills mastery. Since 2016, Singapore has added $ 500 into the SkillsFuture account for every Singaporean aged above 25. This account intends to fund citizen approved courses that develop new and relevant skills for career development. The SkillsFuture Singapore Annual Report 2017-18 states that a significant number of Singaporeans have already benefited from this program since the launch.

Maximizing informal ways of learning

Recently, a 14-year-old American boy has been reported to have achieved nuclear fusion in an old playroom in the house of his parents with the assistance of an online amateur physicist’s forum. In its 2019 State of Software Engineers Report, by Hired, it’s claimed that 1 out of 5 software engineers are self-taught. As stated by Tim Cook, Apple is very proud that half of its US employees who were employed in 2018 do not have a formal four-year undergraduate degree. As the resources of knowledge are more open and easier to access, informal education is becoming even more important.

For adults who are already in the working environment, informal education is the most practical way to receive further education while still making a living.  And a significant amount of adult learning is achieved through practical experience, interacting with customers and co-workers and online courses. Therefore, it is important to establish a system to certify the skills people have earned through such informal ways, not only to encourage a learning culture but also to sustain the motivation of learning.

Ironically, while everybody is talking about reskilling and upskilling and how technology is going to change our jobs, some of the fastest growing job fields, such as nursing, medical assistance, elderly care, plumbing and pipefitting, are the ones less affected by technology and automation and don’t need reskilling. However, those jobs are becoming less and less attractive. Perhaps it’s about time to talk less and act on solving feasible problems.

JANZZ.technology has been actively contributing and creating solutions for matching jobs and skills in the digital age such as the newly developed Realtime Labor Market Dashboard. We help corporations, organizations and governments cope with the challenges during the digital transformation and prepare the workforce to adapt to the new labor markets. At JANZZ.technology, we insist on knowing, not guessing. Our technology provides customers with real facts which help make the right decision. The semantic empowered JANZZ.technology is the right tool to rethink and upgrade the current HR infrastructure. For more information, please write now to sales@janzz.technology

[1] Eric D. Beinhocker. 2006. The origin of wealth evolution, complexity, and the radical remarking of economics. Boston, Masaachusetts: Harvard Business School Press.

[2] Deloitte. Leading in learning. URL: https://www2.deloitte.com/content/dam/Deloitte/global/Documents/HumanCapital/gx-cons-hc-learning-solutions-placemat.pdf [2019.04.01]

 [3] Scott Mautz. 2018. Amazon is paying its employees $ 12,000 to train for a job at another company. And it’s brilliant. URL: https://www.inc.com/scott-mautz/amazon-is-paying-its-employees-12000-to-train-for-a-job-at-another-company-its-brilliant.html [2019.04.01]

[4] David W. Ballard. 2017. Managers aren’t doing enough to train employees for the future. URL: https://hbr.org/2017/11/managers-arent-doing-enough-to-train-employees-for-the-future[2019.04.01]

[5] Pablo Illanes, Susan Lund, Mona Mourshed, Scott Rutherford and Magnus Tyreman. 2018. Retraining and reskilling workers in the age of automation. URL: https://www.mckinsey.com/featured-insights/future-of-work/retraining-and-reskilling-workers-in-the-age-of-automation [2019.04.01]

[6] World Economic Forum. 2017. White paper: Accelerating workfore reskilling for the fourth industrial revolution. URL: http://www3.weforum.org/docs/WEF_EGW_White_Paper_Reskilling.pdf [2019.04.01]

[7] Jason Wingard. 2018. Training generation Z. URL: https://www.forbes.com/sites/jasonwingard/2018/11/21/training-generation-z/#74223a04bde0[2019.04.01]

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