Prepare for a skills shift: what employers need to do to adapt their workforce

The more technology increases and changes, the greater the skills of workers need to shift to adapt to the changes. A new report from McKinsey Global Institute, “Skill Shift, Automation and the Future of the Workforce,” shows that not only will workers need to adapt to new skills as the demand for physical and manual work declines, but so too will employers need to rethink and adjust how work will be structured within their organizations.

Artificial Intelligence (AI) is the biggest technological change that will alter skills required in the workplace. McKinsey’s research shows that through 2030, the time spent using advanced technological skills will increase by 50 percent in the United States and by 41 percent in Europe. “We expect the fastest rise in the need for advanced IT and programming skills, which could grow as much as 90 percent between 2016 and 2030,” say the report’s authors. “People with these skills will inevitably be a minority. However, there is also a significant need for everyone to develop basic digital skills for the new age of automation. We find that among 25 skills we analyzed, basic digital skills are the second-fastest-growing category, increasing by 69 percent in the United States and by 65 percent in Europe.”

However, the “soft skills” of social and emotional issue management will not disappear. In fact, notes the report, “accompanying the adoption of advanced technologies into the workplace will be an increase in the need for workers with finely tuned social and emotional skills—skills that machines are a long way from mastering. In aggregate, between 2016 and 2030, demand for social and emotional skills will grow across all industries by 26 percent in the United States and by 22 percent in Europe.

The key question is how will employers adapt to these rapidly occurring changes? The report says that organizations will change in five key areas—mindset, organizational setup, work-activity allocation, workforce composition, and C-suite and HR understanding and functions.

Also, the workforce will have to adapt, as well. McKinsey’s report says that the future workforce will need to take the following actions:

• Retrain – Current employees will need to be taught new skills to prepare for the changing work environment, while new employees will be hired based on their potential to learn in-demand skills.
• Redeployment – Employees with specific skills can be shifted to new roles or have their roles redefined to better serve the company’s needs.
• Hiring – If retraining and redeployment aren’t enough to cover the needed skills, hiring with a specific skillset in mind will become necessary.
• Contracting – Bringing outside temporary workers allows companies to rapidly ramp-up their needs and intellectual capacity.
• Releasing – Reducing the workforce or freezing hiring allows normal attrition and retirement to occur, with the ultimate goal of accelerating workforce transition into the new economic challenges

According to the authors, “the skill shift is not only a challenge, it is an opportunity. If companies and societies are able to equip workers with the new skills that are needed, the upside will be considerable, in terms of higher productivity growth, rising wages, and increased prosperity.”