The Reskilling Imperative: Is Your Workforce Ready for the Future of Your Business?

Let’s start with a few numbers that should make two things very clear: the future of work will be radically different—and, second, we’re running out of time to prepare.

According to a McKinsey Global Institute Report, by 2030—or only five years from now—375 million workers, or roughly 14 percent of the global workforce, may need to switch occupational categories as advances in digitization, automation, and AI continue to create major disruptions to the world of work.

More: 90% of HR leaders forecast that as much as half of their workforce will need reskilling in that same time span.

And 45% of those polled had no plans to prepare their employees for these changing skills and this incredible disruption. 80% of organizations reported their top workforce challenge is recruiting skilled talent, followed by retaining key personnel and upskilling current employees.

Finally, according to The World Economic Forum, an estimated 85 million jobs could go unfilled by 2030 due to the lack of preparation created by this disruption. That gap could, in a worst-case scenario, result in $8.5 trillion in lost revenue. Some even say that the skills crisis is an $11.5 trillion problem.

OK, now, take a breath. If you want to be effective at all to handle this coming work crisis, you’re gonna need a clear head.

The World of Work

Apparently, the world of work is entering into a transition of epic proportions, perhaps an equivalent to the paradigm shift we experienced that saw us move from an agricultural civilization to an industrial one some 150 years ago. This shift will have profound implications for both the success/failure of our corporations as well as on the personal career paths of millions.

As we speak, companies are struggling to figure out what this all means. How will job roles will change amid this shift? What kind of talent will the new paradigm require over the next five to ten years? How will automation and/or digitization affect our future skills needs? Some executives across the globe admit they currently lack answers to these questions.

Jobs Based on Skills

The evolution of technology has changed the way businesses operate. Technological developments will render some roles obsolete. But those same developments will create new occupations likely more focussed on human-centered skills required as complements to our new technology: creativity, strategic thinking, problem-solving, and emotional intelligence. It would help if companies, when making hiring decisions, began thinking of prioritizing skills over degrees, strengths over job titles.

This would help to bridge the growing gap between capabilities and business needs. According to a report from The World Economic Forum, talent shortages are the most prevalent in education, hospitality, healthcare, technology, and manufacturing.

For example, let’s say a manager is set to be laid off because his team has been outsourced. In a skills-based occupational approach, if that manager possesses marketing or communication skills that can be used elsewhere, she might be transferred to a post in which she could utilize that skill set. Cross-training and reskilling would make it possible for her to assume that new position. That previously cited WEF report also suggests that 59% of employees will need reskilling or other work training by 2030. L&D leaders need to reprioritize to ensure their workforce has the right skills to thrive in current, future, and ever-evolving roles.

The Challenge for L&D Leadership

According to McKinsey, as many as 375 million of us may need to switch occupational categories by 2030. At a recent World Economic Forum, 80% of CEOs who were investing heavily in AI also publicly pledged to retain, retrain, and reskill existing employees.

Reskilling helps manage change and navigate future workforce planning efforts by retraining your workforce for what lies ahead. This is not “upskilling,” which refers to the concept of building on existing skills. Reskilling prepares employees for roles that may be in entirely different, likely emerging fields, such as AI or cybersecurity.

The trick here is that it’s happening really fast. These evolutions in tech are a speeding train. So redeploying and reskilling millions in mid-career is not going to be easy. In fact, another McKinsey report notes, “There are few precedents in which societies have successfully retrained such large numbers of people.” The reality is that awareness is not translating into action. Training budgets are dwindling. Spending is not keeping pace with the projected needs. Not even close. What to do?

That’s above our pay grade. Depending on the speed and scale of the coming workforce transition, McKinsey notes, many countries may conclude they will need to undertake “massive initiatives.” But a few things are clear. Policymakers will need to consider what the structure will be for unemployment. Senior executives need to see the urgency for what it is and take action to rethink their role, making sure their employees can develop the proper skills. Workers will need much more intense and focused transitional support. And most of us will have to bear some of the new responsibilities required to make and keep us relevant, at least until retirement.

At Least Own the Upskill/Reskill Challenge

According to the Training Orchestra, there are four ways L&D teams can lead the way to owning reskilling and upskilling.

1. Acknowledge the Gap: Know that job competency requires several different skill sets. The full understanding of how to do a job includes both hard and soft skills, all of which must be identified, in case that information is required for job transference.
2. Make a Business Case for New Training Programs: Most C-suite executives have a blind spot with L&D, so you have to do everything you can to get their attention. Gaining approval for new programs is essential for many reasons, and you’ll be required to explain them all.
3. The Answer Is in Your Employees: It’s the job of L&D to increase employee competency and expedite growth both individual and organizational. When L&D can provide an improved learning experience for its learners, this enables better application of learned skills, increased employee retention, and ultimately strategic success.
4. Own the Why, How, and How Much of Learning: The C-suite will want to know how upskilling and reskilling programs will be managed, how much they’ll cost, and how success will be measured. You’ll need to explain all of these things.

The Remit for Today’s Business Leaders

As digitization, automation, and AI reshape our businesses and the world at large, it is up to leadership to manage that incredible disruption by preparing employees to face it and the attendant new processes head-on. 64% of those surveyed by McKinsey said the main reason they were willing to invest in retraining was to increase employee productivity. To realize the potential productivity dividends ushered in by these revolutionary means, workers need the skills and abilities to make it happen. In managing the transition, L&D leaders will serve their employees with the necessary skills and, in turn create both personal and organizational success as well as competitive advantage.