Will your organization be able to sustain itself in the future world of work with yesterday’s and today’s skills? Have you invested as much in your learning and development programs as you have in technology? What are your strategies for managing ChatGPT's heightened IQ and its effects on your workforce across all levels?
“AI won’t replace people – but people who use AI will replace people who don’t,” predicts the new IBM study. Many businesses are currently reorganizing operations and redesigning work processes due to generative AI – an enabling factor that we haven’t had before.
Hiring professionals are actively innovating talent acquisition strategies to attract next-generation talent and address skills shortages. HR teams are reconstructing job descriptions with enabling, automating, or augmenting systems in mind. Business leaders are boldly revamping business models and operational elements to stay ahead in the competitive landscape.
Why the urgency?
The executive participants in the 2022 IBM global research expressed that, due to automation and artificial intelligence, 40% of their employees will require reskilling in the next three years. This prediction, which includes 1.4 billion people in the global workforce, reflects the extent of the anticipated change in response to technological advancements (World Bank statistics). Addressing these skill gaps becomes a critical priority, reflecting executives’ concerns about talent readiness.
The World Economic Forum’s (WEF) Future of Jobs Report 2023 emphasized the urgent need for skill transformation due to rapid technological breakthroughs and evolving global markets. The report anticipates that disruptions to 44% of workers’ skills in the next five years will drive a growing demand for technical and non-technical training for six out of ten employees by 2027. Moreover, the WEF report reveals that by 2025, 85 million jobs worldwide will be displaced due to the shift in labor between humans and machines. At the same time, 97 million job roles are expected to potentially emerge, better matched to the changing nature of work shared by humans, machines, and algorithms. The world is in the current era of human-machine partnership; however, this evolution is also contributing to the widening of global skill gaps.
The result of the 2021 McKinsey Global Survey disclosed that 87% of executives were either presently experiencing skill gaps within their workforce or expected such gaps within a few years. Yet, less than half of the survey respondents had a clear sense of how to address these issues, highlighting the importance for organizations to develop and implement comprehensive upskilling and reskilling programs to bridge the growing divide between today’s workforce skills and future job requirements.
According to a 2022 survey published by the Asian Development Bank (ADB), the Philippines is projected to face a significant skills mismatch in the coming years, affecting 2.4 million workers. The study indicated that skills shortages will impact various industries, with the information and communication technology industry expected to experience the highest shortage; 42.2% of firms in this sector reported difficulties in filling vacancies. The research identified several causes of the skills mismatch, including swift technological changes, evolving industry requirements, and gaps in the education system. Additionally, regional disparities were noted, with skills shortages being more pronounced outside Metro Manila.
The pressing need to enhance and update skills to meet the demands of the future economy stems from several crucial factors reshaping the global labor and economic landscape. This urgency is highly influenced by the unprecedented pace of technological progress, which is transforming industries at an exponential rate. Consequently, skills can become obsolete quickly, leading to shorter skill lifespans in many fields. Traditional job roles are thus changing, and new ones are emerging, driving a fundamental transformation in the nature of work.
The McKinsey Global Institute reports that by 2023, up to 375 million workers (14% of the global workforce) may need to transition to different occupational categories due to digitization, automation, and advances in AI. If not addressed urgently, this skills gap could result in widespread unemployment and economic inefficiency.
The Global Competitiveness metrics of the World Economic Forum outlined that countries and businesses that fail to prioritize human capital development risk falling behind in global competitiveness. Economic competitiveness and resilience are closely tied to the ability to upskill and reskill the workforce.
For businesses, the urgency to upskill and reskill their workforce is not merely a strategy but a survival necessity—driving innovation, ensuring competitiveness, and building the resilience required to thrive amidst relentless technological disruption and market volatility. Organizations with a workforce possessing up-to-date skills are more resilient to economic shocks, especially as the future economy demands expertise in new and evolving skill sets.
The response
Leading companies have recognized the substantial gains in investing in upskilling and reskilling their workforce. Amazon, for instance, launched its Upskilling 2025 initiative in 2019 with a $700 million investment to upskill 100,000 employees by 2025. This initiative includes programs such as the Amazon Technical Academy, Machine Learning University, and Career Choice, which cover 95% of tuition costs for courses in high-demand fields.
Walmart overhauled its education benefit, Live Better U (LBU), to reskill company associates and prepare them for key roles within the organization. The initiative aims to expedite the transition of Walmart and Sam’s Club associates into approximately 100,000 high-demand jobs expected to be filled over the next three years. Since its inception, the LBU program has provided education opportunities to over 126,000 associates through partnerships with academic institutions such as the University of Arkansas, Purdue Global, and Spelman College. Walmart is moving away from college degree requirements for numerous management positions, emphasizing a shift towards skill-based hiring practices. As part of the new approach, Walmart plans to increase the number of short-term certificates and courses to ensure employees acquire skills relevant to current and future job demands.
AT&T has committed $1 billion to its Future Ready Initiative, a multi-year project designed to retain half of its workforce for new, technology-centric roles. This program focused on preparing employees for roles in cybersecurity, data science, and software development. By 2022, nearly half of AT&T’s workforce had gained new skills, boosting their adaptability and capability in their roles.
The IT and Business Process Management Services (IT-BPMS) sector in the Philippines has developed a roadmap that prioritizes upskilling and reskilling initiatives. This action plan aims to elevate the sector’s capabilities, focusing on the adoption of advanced technologies to enhance competitiveness in the future economy.
In response to the Industry 4.0 paradigm shift, manufacturing companies in the Philippines are intensifying their training and development programs on robotics, artificial intelligence, the Internet of Things, and data analytics. These learning efforts intend to equip their workforce with the skills needed to excel in an increasingly digital and automated manufacturing landscape.
P&A Grant Thornton Academy (GT Academy) has integrated the agile learning approach into its skill-building framework designs for clients and partner organizations. This iterative learning design method embraces speed, flexibility, and collaboration, strategically addressing the growing demand for positive and meaningful changes in individuals, leaders, communities, and society. GT Academy ensures that the learning experiences offered and delivered remain future-ready, effective, and adaptable to the ever-changing needs of learners and industries. This knowledge hub drives sustainable learning impacts for firms.
These responses underscored the importance of human capital development as a vital goal for organizations across industries, regardless of their years of operation or size. Investing in programs aimed at upskilling and reskilling not only enhances an organization’s competitiveness but also cultivates a more agile and flexible workforce capable of navigating the complexities of today's dynamic business environment.
Today’s call
Once more, no industry, company size, or job level is immune to the impacts of this fast-advancing world. To foster growth and maintain competitiveness, empower your workforce with continuous learning and expertise.
Don’t miss the memo on what matters now: the skills gap is real, growing, and expanding. This is not a future concern but an immediate imperative.
As published in The Manila Times, dated 31 July 2024
