A ‘Reskilling Revolution’ is upon us

In 2018, the World Economic Forum (WEF) published a report on the future of work: “Towards a Reskilling Revolution: A Future of Jobs for All”. This report sought to deepen the debate on the future of work and introduced the concept of reskilling in the context of the fourth industrial revolution. 

As WEF Founder and Executive Chairman Klaus Schwab put it, the evolution of technology is accelerating a series of changes in the labor market, creating a demand for workers to engage in learning and for companies to offer employees a range of routes to new knowledge.

Fast forward six years, and their messaging is much the same: A reskilling revolution is upon us.

What is reskilling?

Reskilling is an essential strategy for filling skills gaps and ensuring that employees are equipped with the right competencies to contribute to an organization’s long-term goals against a backdrop of digital transformation.

To that extent, reskilling aims to equip employees with new or upgraded skills to meet evolving job requirements, technological advancements, and industry demands. It’s a proactive approach to talent development and workforce planning that focuses on enhancing the capabilities of existing employees rather than solely relying on external hiring.

Reskilling is becoming more important as emerging technologies reshape industries and require more employees to have specialized skills.

The WEF ‘Reskilling Revolution’

We’ve all seen the impact that economic and geopolitical trends have had in the last few years. High-income markets are facing tight labor markets and low- and middle-income markets are facing higher unemployment than before the coronavirus pandemic. 

Meanwhile, traditional education systems are struggling to prepare students for the rapidly changing nature of work. Things are moving so fast, in fact, that the WEF estimates that 23 percent of global jobs will change due to industry transformation in the next five years and that 1.1 billion jobs could be “radically transformed” by technology within the next decade. 

In response, the WEF launched what it calls the ‘Reskilling Revolution’ — an initiative that aims to empower one billion people with better education, skills, and economic opportunities by 2030. 

“The activities of the Reskilling Revolution aim to contribute to building a fairer, more inclusive world that will deliver benefits to economy and society through better skills and education for generations to come.”

How reskilling creates economic value for employers

According to WEF, economic value creation is increasingly based on the use of higher levels of specialized skills and knowledge. This, they say, has the potential to create unprecedented new opportunities for some while threatening to leave behind a significant share of the workforce. 

As technology continues to become more advanced and skills gaps widen, there will be more people looking for work. Artificial intelligence, robotics, the IoT, and the overall interconnected nature of our world are just a few factors leading to a situation where we have the capabilities to do more—invent, design, produce, analyze—with less input from humans. 

Faced with this reality, employers have two choices: (i) Do nothing and fight an uphill battle against skills and worker shortages, or (ii) reskill employees to generate positive returns. 

But how does reskilling employees do this?

McKinsey says it’s all about productivity. Their research has found that effective reskilling leads to a productivity uplift of around 6 percent to 12 percent. This is because reskilling not only equips employees with new skills but also makes the wider organization more agile and adaptable to technological change, market dynamics, and evolving business needs. Reskilling also fosters a learning culture and promotes things like an agile workforce and internal mobility.

As for who needs to be reskilled, the answer is just about everybody. McKinsey found that 30.5 million UK workers (94 percent of the workforce) lack the full suite of skills they’ll need to perform their jobs well in 2030. Among these workers, 25.5 million would benefit from upskilling. This is of course applicable to any market; skills aren’t restricted by borders.

Their analysis goes on to say that around 43 percent of reskilling cases would lead to payoffs in large enterprises. In small and medium-sized enterprises, this drops to a 30 percent net benefit for employers who upskill their workers. What’s significant, though, is that in only around 25 percent of cases where reskilling is needed, employers would not realize a net benefit from reskilling: that’s one in four.

Everyone’s going to be impacted

It’s not just workers. There are three additional primary stakeholders in this discussion: employers, governments, and training providers. These are all going to be impacted by a general shift to skills-based organizations and skills-based workforce planning. 

Workers

It’s often misunderstood that digital transformation and the changing nature of work will only impact workers, and that of those workers, only low-skilled occupations will be impacted. This is not the case. Industries from hospitality and manufacturing to traditional professions and technology are all going to be disrupted. 

To weather this transformation, workers must have a much deeper understanding of their own skill sets, the breadth of how those skills can be applied across multiple occupational categories, and clear direction on ensuring their skills are kept up-to-date and relevant.

Many jobs will become redundant during this period while others will be changed considerably, and entirely new ones will be created. It will be incumbent upon the workers themselves to have a clear career plan, whether working full-time in one company or working independently across multiple companies.

Employers

As we’ve explored, thought leaders in this space—McKinsey, Gartner, WEF—have continued to stress that reskilling employees is a priority. The general idea is that the more skills a worker has, the more relevant  they will be in the future. 

Of course, employers need to consider other factors beyond employee training and development. 

Having a clear and established method of rapidly and continuously assessing the strategic and competitive landscape will be essential in remaining competitive in this period of rapid change. Companies that stay ahead of these changes will remain agile and capable of implementing value chain improvements within the company quickly. 

Employers must also understand the skills required to adapt a company to changing industry demands and the skill sets of existing employees. Having an overview of skills (e.g., through a skills or talent inventory) will make it easier to identify gaps and find solutions.

Governments

Thought leaders anticipate radical shifts in the landscape of economic value creation that will impact most elements of the public policy dialog.

At the highest levels, governments must remain focused on ensuring that their citizens have a clear pathway to flexible and efficient lifelong learning and a clear pathway to long-term employment through job transition. 

Governments should focus their public policy dialogs on agility, flexibility, and forecasting the near future. They should lessen their reliance on rigid, established strategy development predicated on lagging information.

Training Providers

Training providers play a critical role in supporting the labor market transition. Now more than ever, academia is responsible for providing relevant lifelong learning opportunities to ensure learners are equipped with the skills in demand by employers today and tomorrow.

Priority goals for training providers and educational institutions should be relevancy, agility, and accessibility in training. Continuing to offer standard degree and diploma programs through multiple channels (in-class, online, distance) will be critical while offering micro-credentials or nano-credentials that focus on agile and succinct skills acquisition will become increasingly important.

The changing nature of work represents an incredible opportunity for academia to re-engineer how it develops curriculum and measures the effectiveness of learning outcomes. Artificial intelligence and machine learning, for example, will enable institutions to see in real-time the skills in demand by employers and allow programming to be efficiently adapted. In addition, monitoring the live skills in use will enable the institution to validate the learning outcomes it set out to accomplish.

Act now to reskill your workforce

The WEF, Gartner, McKinsey, and others all stress that the rapid pace of technological change will transform the workforce. Yet, little has been done to develop practical solutions. 

At SkyHive, we saw this coming several years ago and began engineering a solution to support workers and employers through this transition. We’ve applied the very technologies that are creating this transition to automate and simplify the process of transitioning from training to work. 

Want to learn more about how AI-powered skills intelligence can help safeguard your workforce? Book a product demo today.