Have you been trying to make a case for increased learning and development (L&D) budgets only to be shot down at every board meeting? It looks like your luck is about to change, because L&D is finally gaining recognition as a key focus area in human capital management. Thanks to research conducted by myriad institutes, now there is ample data to support the pro-L&D argument.
The impact of the fourth industrial revolution on the labour market
Digital transformation — the fourth industrial revolution — is undeniably changing the way organizations’ do business. A key area of this revolution is automation — where a process or procedure is performed with little or no human involvement. Understandably, this disrupts the labour market, with many workers feeling their jobs are threatened or finding out they are not properly skilled to carry out their work anymore.
The reality of the situation is that many jobs will eventually be transformed or completely eradicated, while whole new categories of jobs will emerge. McKinsey Global Institute’s paper Jobs lost, jobs gained: Workforce transitions in a time of automation reports that by 2030, between 400 million and 800 million individuals around the world could be displaced by automation and need to find new jobs, while 75 million to 375 million workers may be required to switch occupational categories and learn new skills. Looking at these numbers, it’s tempting to feel distressed that there will be a shortage of jobs in the future. But history shows that although technological disruptions create shifts in employment, it also creates new jobs. And new jobs require new skills.
The Skills Shift
A recent research paper published by the McKinsey Global Institute titled Skill shift: automation and the future of the workforce discusses the coming shifts in demand for workforce skills in the face of automation. One of the key findings of this research is that automation will accelerate the shift in required workforce skills seen over the past 15 years, with the strongest growth in demand being for technological skills. The demand for social and emotional skills such as leadership and management are also expected to increase. The demand for physical and manual skills, including general equipment operation, is expected to drop.
Another key finding is that companies will need to make significant organizational changes to address these skill shifts in order to stay competitive. This leads to a new emphasis on continuous learning for workers, with a large portion of the companies surveyed recognizing the need for their workforce to upgrade skills and continue to learn throughout their working lives. The survey also found that providing on-the-job training is essential for organizations to prepare their workforce for the skills of the future. Additionally, according to The Future of Jobs Report 2018 published by the World Economic Forum, no less than 54% of all employees will require significant re- and upskilling by 2022.
Let’s momentarily turn our eyes away from the future and consider the present situation. As per the 2019 Deloitte Global Human Capital Trends Survey the top-rated trend for 2019 is the need to improve L&D. 86% of respondents believe they need to reinvent their ability to learn in the face of relentless acceleration of artificial intelligence (AI), cognitive technologies and automation. The survey findings show a keen awareness amongst respondents of the important role learning plays in obtaining much needed skills.
Building a Case for Learning and Development
There are plenty of reasons why an organization needs to invest in strategic L&D programs, many of which we have covered in previous posts such as Training Sucks. Now What? and Enable Employee Engagement. Not Employee Entitlement. However, the research and findings presented here highlight the urgency of investing in L&D to build a future ready workforce.