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 a 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 percent of their employees would 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. Addressing the skill gaps becomes a critical priority.
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 percent 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.
The report also said that by 2025, 85 million jobs worldwide would 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 — this evolution is also contributing to the widening of global skill gaps.
A 2021 McKinsey global survey, meanwhile, found that 87 percent of executives were either presently experiencing skill gaps within their workforce or expected such within a few years. However, less than half had a clear sense of how to address this, highlighting the importance for organizations to develop and implement comprehensive upskilling and reskilling programs.
A 2022 Asian Development Bank survey also projected that the Philippines would face a significant skills mismatch in the coming years, affecting 2.4 million workers. Various industries will be affected, with information and communication technology seen experiencing the highest shortage: 42.2 percent 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 education system gaps. Regional disparities were also noted, with skills shortages 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. The urgency is highly influenced by the unprecedented pace of technological progress. 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 reported that by 2023, up to 375 million workers (14 percent of the global workforce) may need to transition to different occupational categories due to digitization, automation, and AI advances. If not addressed urgently, this skills gap could result in widespread unemployment and economic inefficiency.
Global competitiveness metrics of the WEF, meanwhile, outlined that countries and businesses that fail to prioritize human capital development risk falling behind. 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. 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 substantial gains in investing in upskilling and reskilling. Amazon, for instance, launched its Upskilling 2025 initiative in 2019 with a $ 700 million investment to upskill 100,000 employees by 2025.
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.
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.
In the Philippines, the IT and business process management services sector has developed a roadmap that prioritizes upskilling and reskilling initiatives. The 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, AI, 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 has integrated the agile learning approach into its skill-building framework designs for clients and partner organizations. The 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.
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.
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.
Mithi Sandalo is a senior managing consultant for the Advisory Services Practice Area at P&A Grant Thornton. One of the leading audit, tax, advisory, and outsourcing firms in the Philippines, P&A Grant Thornton is composed of 29 partners and 1,500 staff members. We’d like to hear from you! Connect with us on LinkedIn and like us on Facebook at P&A Grant Thornton and email your comments to [email protected]. For more information, visit our website at www.grantthornton.com.ph.
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