Future of Work – Upskilling Society & Building Better Jobs

By Amandeep Midha, Principal IT Consultant, BEC

July 11, 2021

In June 2018, Elon Musk made a statement that delays in Tesla Model 3 were due to the company’s excessive reliance on automation, which different media outlets and anthropologists picked up and twisted it to suit their own agendas. These mouthpieces  claimed humans are always superior, automation has no reliability, or some even said companies using automation should be taxed differently. 

However, these organizations fail to comprehend what automation really means. It does not only mean physical robots, but rather refers to a broad range of processes that can affect every aspect of a business or human life. A survey by Capgemini in Nov 2018, with over 800 executives, asked the executives how they are responding to job automation. The results confirmed that there will not be any area which will not be impacted by automation. Each job function therefore is subject to use some or more technology to automate at least a part of its role and responsibilities.Automation has been identified as among the top technology trends with sufficient industrial maturity by McKinsey’s Top Trends in Tech published in June 2021 and thus it is unlikely to go away any time soon. 

The question becomes whether or not this is good for the labor market?

The answer is both yes & no. A MIT Study done in April 2020, found that Industrial robots grew four-fold from 1973 to 2007 in the United States alone. For every robot added, wages declined by 0.42% and the employment-to-population ratio went down by 0.2% – leading to a cumulative loss of about 400,000 jobs. Since predictions suggest that the amount of robots will quadruple again from 2020-2025 in the US, another 1% decline in employment to population ratio is undeniably foreseen.

If we extrapolate a similar decline in the employment-to-population rate to other developing economies, it would appear to be a serious cause of alarm. 

A report from November 2018, Forrestor’s Future of Work Report found by 2030 automation will cut jobs by 29% but new job creation from automation will only be 13%. 

“Firms, economies, governments, and societies will be challenged and transformed. Despite apocalyptic predictions, the full implications of automation are still unknown. Change will come in waves, waves that include currently unrealized technologies” – Forrestor’s Future of Work Report, 2018

While this paints a bleak picture about the future of work with the rise of automation, there is some hope for the workers of the world, which is Upskilling ( or reskilling )

“Among organizations with high automation maturity, those with a full-scale upskilling initiative report higher levels of workforce productivity” – Capgemini Report 2018

While upskilling benefits corporations, it is also supported by the International Labour Organization (ILO). During its centenary convention in July 2019, ILO adopted the Centenary Declaration for the Future of Work, calling upon its member states to establish lifelong learning systems as a joint responsibility of governments, and employers’ and workers’ organizations.

It appears that the time is now. Mercer’s Global Talent Trends Report mentioned: Executives believe that 45% of the workforce can adapt to the new world of work, while 78% of employees say they are ready to reskill.

Therefore organizations need not just maintain their digital transformation but upskilling and transitioning their workforce as well. 

What is Upskilling?

Upskilling can be defined as:

  • Learn new skills or technologies within a similar job, including:
    • Skills necessary to leverage automation effectively to complement the non-automated part of a job, and,
    • Skills useful to perform higher value tasks in the time freed-up by automation
  • Redefine or complement skills to shift to new types of jobs (Side-skilling / job migration)
  • Complement existing skills with new ones to be able to perform several jobs (Multi-skilling)

It is important to recognize that this does not only refer to technical skills. Glenda Quintini, senior economist at OECD in his paper mentioning reskilling noted that acquiring core competencies such as adaptability, communication, collaboration, and creativity can be equally important as new technical skills. 

The paper further goes on to describe where this reskilling can take place and the characteristics of each environment:

  • Formal Learning: Going to university or training institution
  • Non-formal Learning: Learning activities organized by employer, not necessarily a diploma
  • Informal Learning: involves learning from colleagues or supervisors even during leisure activities

Upskilling initiatives as seen since 2019

Not surprisingly, in July 2019, Amazon made a statement saying they will spend $700 million to upskill its workforce who are affected by automation. Looking into details of the initiative “Upskilling 2025”, Amazon created 1.  “Amazon Technical Academy” which equips non-technical Amazon employees with the essential skills to transition into, and thrive in, software engineering careers; 2. “Associate2Tech, which trains fulfillment center & warehouse associates to move into technical roles regardless of their previous IT experience.  Lastly 3. “Machine Learning University”  offering employees with technical backgrounds the opportunity to access machine learning skills via an on-site training program, apart from few other programs as well

Amazon isn’t the only corporation to heavily invest in automation, Orange pledged $1.5 billion and PwC announced $3 billion towards upskilling their workforce.

The pandemic has pushed Upskilling to the forefront

The pandemic has brought about a unique situation: millions unemployed on the one hand and an accelerated need to digitalize on the other. So where can one initiate an upskilling initiative?

During the current economic crisis, affordability, accessibility, and a clear pathway to employment are the most compelling opportunities i.e. the short learning capsules, community sessions will likely be the most effective. But otherwise for one to develop deep expertise and the prestige of a degree, a formal or non-formal learning experience would be best.

How to kickstart?

If your organization or region does not already have an upskilling program in place, here are some suggestions on how to get one off the ground:

– Follow ILO’s roadmap, ensuring each business with certain minimum workforce complies by setting up Learning Departments

– Small businesses need ecosystem help the most, hence supporting small businesses via Skills Councils & Vocational Studies for SME employees

– Engage the financial community as Insurers, Bankers, Impact Investors all have key role in this intangible investment

– Instead of other government intervention, tax holidays for upskilling programs and tax deductions for upskilling investments would be good start

This article was authored by Amandeep Midha, Principal IT Consultant, BEC