Executives increasingly see investing in retraining and “upskilling” existing workers as an urgent business priority that companies, not governments, must lead on.
The world of work faces an epochal transition. By 2030, according to the a recent McKinsey Global Institute report, Jobs lost, jobs gained: Workforce transitions in a time of automation, as many as 375 million workers—or roughly 14 percent of the global workforce—may need to switch occupational categories as digitization, automation, and advances in artificial intelligence disrupt the world of work. The kinds of skills companies require will shift, with profound implications for the career paths individuals will need to pursue.
How big is that challenge? In terms of magnitude, it’s akin to coping with the large-scale shift from agricultural work to manufacturing that occurred in the early 20th century in North America and Europe, and more recently in China. But in terms of who must find new jobs, we are moving into uncharted territory. Those earlier workforce transformations took place over many decades, allowing older workers to retire and new entrants to the workforce to transition to the growing industries. But the speed of change today is potentially faster. The task confronting every economy, particularly advanced economies, will likely be to retrain and redeploy tens of millions of midcareer, middle-age workers. As the MGI report notes, “there are few precedents in which societies have successfully retrained such large numbers of people.”
So far, growing awareness of the scale of the task ahead has yet to translate into action. Indeed, public spending on labor-force training and support has fallen steadily for years in most member countries of the Organisation for Economic Co-Operation and Development (OECD). Nor do corporate-training budgets appear to be on any kind of upswing. But that may be about to change.
Among companies on the front lines, according to a recent McKinsey survey, executives increasingly see investing in retraining and “upskilling” existing workers as an urgent business priority—and they also believe that this is an issue where corporations, not governments, must take the lead. Our survey, which was in the field in late 2017, polled more than 1,500 respondents from business, the public sector, and not for profits across regions, industries, and sectors. The analysis that follows focuses on answers from roughly 300 executives at companies with more than $100 million in annual revenues.
Among this group, 66 percent see “addressing potential skills gaps related to automation/digitization” within their workforces as at least a “top-ten priority.” Nearly 30 percent put it in the top five. The driver behind this sense of urgency is the accelerating pace of enterprise-wide transformation. Looking back over the past five years, only about a third of executives in our survey said technological change had caused them to retrain or replace more than a quarter of their employees. But when they look out over the next five years, that narrative changes.
> Read the full article on the McKinsey website
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