Future of Jobs Report

September 11, 2023
Skills Caravan
Learning Experience Platform
September 11, 2023
, updated  
September 11, 2023

Future of Jobs Report

The Future of Jobs Report 2023 provides a comprehensive analysis of the evolving labor market and its implications for industries, businesses, and the workforce. The report highlights the need for companies to adapt to emerging technologies, changing skills requirements, and shifting employment patterns in order to remain competitive and maintain a skilled workforce. The findings emphasize the importance of upskilling and reskilling initiatives, the increasing reliance on internal training solutions, and the growing trend of shorter training programs with faster return on investment. The report also explores the expected performance of various industries in terms of motivation and productivity, offering valuable insights for organizations to prepare for the challenges and opportunities ahead.

The 2023 Report emphasizes the critical role of talent development in addressing the rapidly changing workforce landscape. It highlights the persistent skills gaps and the need for organizations to invest in upskilling and reskilling initiatives to meet business goals. The report reveals that companies are increasingly prioritizing internal training solutions, such as on-the-job training and coaching, while also acknowledging the importance of connecting childhood education to evolving workplace skill sets. As the demand for new skills rises, the report underscores the significance of efficient training programs with swift return on investment, and the increasing adoption of education and workforce development technologies across various industries. This comprehensive analysis offers valuable insights for businesses aiming to navigate the challenges and opportunities of talent development in the coming years.

Talent availability and Retention

Improving talent progression and promotion processes emerges as the most promising strategy for increasing talent availability, as indicated by 48% of respondents. Offering higher wages is also seen as an effective approach by 35% of respondents, especially within the Government and Public Sector.

Interestingly, while 81% of companies view investing in learning and on-the-job training as a key strategy, only 34% believe that reskilling and upskilling directly contribute to increasing talent availability. Effective employee training programs rank as the top talent-attracting policy across various industries.

When comparing the attractiveness of various factors, training opportunities surpass remote work, DEI (diversity, equity, and inclusion) policies, and childcare support. Although only one-third of companies globally consider robust training as attractive to prospective employees, this figure rises to 40% among small and medium-sized enterprises (SMEs).

Business practices to increase talent availability, 2023-2027

Assessing skills when hiring

Work experience stands out as the leading skills-assessment mechanism utilized by 71% of businesses. Interestingly, more companies prioritize skill assessments (47%) over the completion of a university degree (45%). Psychometric testing is another method used by 27% of companies.

The consideration of microcredentials, such as short courses and online certificates, by 20% of companies, indicates their potential in accelerating skills-based talent management. Furthermore, the completion of apprenticeships is ranked as a top-three criterion by 19% of companies, while 9% resort to outsourcing through staffing firms.

In some countries, including Bahrain, Saudi Arabia, UAE, Egypt, Austria, and South Korea, university degrees are highly recognized, with more than 60% of companies considering them a top criterion. Conversely, less than 30% of companies in Romania, Colombia, Latvia, and Sweden use degrees as a primary consideration.

Skills assessment mechanisms

When it comes to promoting diversity, only 24% of companies consider being flexible on education requirements, while 33% do not have a diversity, equity, and inclusion (DEI) program in place.

Diversity, equity and inclusion (DEI) Trainings

Companies are increasingly playing a prominent role in supporting fragile talent groups and advancing social justice and diversity, equity, and inclusion (DEI). However, less than one-fifth of organizations plan to run DEI programs specifically to boost talent availability. Despite this, over two-thirds of surveyed organizations have a DEI program in place, with a remarkable 92% of large companies (those with over 50,000 employees) reporting such initiatives.

The most popular components of DEI programs include comprehensive DEI training for managers (42%) and staff (37%). Interestingly, the real estate industry is an outlier, with only 20% of executives agreeing on the importance of DEI training. Inclusion and accessibility across physical and virtual spaces are a priority for 33% of respondents. However, recruiting a DEI officer is considered a priority by only 12% of respondents globally.

Women emerge as the most common priority group for DEI programs across regions and industries, with 80% of respondents identifying them as a focus. Gen Z (individuals under 25 years old) is the second-most common priority group, with two-thirds of respondents concentrating on young workers. Conversely, low-income backgrounds are the least prioritized for DEI programs, as less than one-third of companies dedicate efforts to this group.

It is worth noting that DEI program priorities differ across regions. European countries tend to focus on women, while Middle Eastern and North African countries emphasize young workers. Meanwhile, East Asian and Pacific countries display a strong commitment to LGBTQI+ inclusion.

Public policies to enhance access to talent 

Businesses view government funding for skills training as the most effective intervention in connecting talent to employment. This belief holds true across all company sizes and regions. Providing funding for reskilling and upskilling is considered the top public policy with the potential to improve talent availability for a wide range of organizations.

The majority of industries view government funding for skills training as the most effective intervention for connecting talent to employment. However, there are exceptions, such as the Health and Healthcare, Accommodation, Food and Leisure industries, which seek greater flexibility in hiring and firing practices. Additionally, the Agriculture and Natural Resources sector desires more flexibility in setting wages.

There are exceptions across countries as well. Countries like China, Indonesia, Germany, and the Philippines favor changes to immigration laws concerning foreign talent as a means to promote talent availability. Argentina, Brazil, and Colombia also prefer more flexibility in hiring and firing practices. In contrast, government funding for reskilling and upskilling is considered a low priority in Colombia and Argentina, with only 10% of companies recognizing its potential to increase talent availability.

The second-most welcomed public policy is increased flexibility in hiring and firing practices, especially in the Electronics (50%) and Oil and Gas (48%) sectors. Although childcare availability and better access to transport are generally seen as less effective, 40% of Israeli respondents identify improved transport as key to enhancing talent availability.

Less than one in five respondents expect changes to labor laws that accommodate remote work to be a crucial policy for talent availability. However, the Telecommunications and Non-Profit sectors, as well as organizations in Switzerland, are outliers in this regard.

While companies tend to focus on government assistance with adult skills training, they also acknowledge the importance of connecting childhood education to evolving workplace skill sets. School system improvements are highly valued, particularly in the Telecommunications industry and several other sectors. Notably, small and medium-sized enterprises (SMEs) place greater value on improving school systems as a means to attract skilled talent compared to large corporations

Talent development

The majority of companies across various countries and industries are optimistic about talent development for their existing workforce over the next five years. They primarily view workforce development as the responsibility of workers and managers, with 27% of training provision coming from on-the-job training and coaching. Internal training departments are expected to provide 24% of the training, while employer-sponsored apprenticeships will account for 15%.

External training solutions, such as licensed training, private-sector online-learning platforms, and universities, are less favored compared to company-led initiatives. Overwhelmingly, companies plan to fund their own reskilling and upskilling programs, although there are some geographic exceptions. Co-funding across the industry is the least utilized funding model for skills training, with only 16% engagement globally.

Europe has the highest uptake for intra-industry co-funding, while it is least common in Sub-Saharan Africa, East Asia and the Pacific, and Latin America and the Caribbean. Other prevalent funding mechanisms include free-of-cost training, government funding, and public-private hybrid funding.

In terms of training duration, companies anticipate that 25% of their training programs will last less than one month during 2023–2027, and only 17% will last longer than a year. Following training, approximately two-thirds of employers expect a return on investment (ROI) within a year, while one-third expect it within six months. Interestingly, large companies tend to be more optimistic about ROI expectations than SMEs.

Training provision, 2023-2027

The expected mean composition of training programmes

Funding for training, 2023-2027

The share of companies which will use these funding sources for their training programmes from 2023 to 2027

Availability and effectiveness of skills training 

Despite the growing investments in skills training, skills gaps continue to be a challenge, as only 41% of current workers have successfully completed training to bridge these gaps. Companies' strategies for upskilling and reskilling their workforce between 2023 and 2027 include various approaches: 39 out of 100 employees will not require training, 12 will need training that becomes accessible by 2027, 15 will require training that remains inaccessible, and 18 will be upskilled by 2027. Additionally, companies anticipate that 16 out of 100 employees will be reskilled and redeployed within their organizations by 2027.

Training requirements assessments are generally consistent across industries and countries, though there are some exceptions, such as Egypt. There is a significant variation in companies' expected abilities to redeploy upskilled and reskilled workers within their organizations, as seen in the differences between Egypt, Georgia, and Mexico.

A majority of companies, over four in five, plan to adopt education and workforce development technologies within the next five years, making it the second most popular choice among 28 emerging technology solutions.

Upskilling and reskilling outlook, 2023-2027, by workforce fraction

A breakdown of the average training strategy for a representative group of 100 employees, calculated based on the raining strategies reported by organizations surveyed

Outlook for motivation and productivity 

As companies prepare for workforce development during the 2023-2027 period, they face the challenge of training most of their workers, with only half of them currently able to receive training. To close the skills gaps of the remaining workforce, human resources departments will need to accelerate their plans and strategies. Companies generally do not anticipate external funding for training initiatives and prefer to rely on internal solutions, such as on-the-job training and coaching, to address their employees' development needs. The majority of these training programs are expected to be short in duration, with companies aiming for a return on investment within a year.

Future of Jobs Report 2023

Future of Jobs Report 2023

The Future of Jobs Report 2023 is an analysis of the evolving labor market. It emphasizes the need for companies to adapt to emerging technologies, changing skills requirements, and shifting employment patterns to remain competitive and maintain a skilled workforce.

Upskilling and reskilling are crucial in the current job market, as they help bridge skills gaps and enable employees to stay relevant in their careers.

Work experience is the leading skills-assessment mechanism, followed by skill assessments and psychometric testing.

While many organizations have DEI programs in place, they may not specifically run them to boost talent availability. DEI training for managers and staff is a common component, with women often being the top priority group.

Government funding for skills training is considered the most effective policy to connect talent to employment, with some exceptions based on industry and region.

Most companies are optimistic about talent development, with a focus on on-the-job training, internal training departments, and employer-sponsored apprenticeships.

Companies anticipate that 25% of training programs will last less than one month, and approximately two-thirds expect a return on investment within a year.

Only 41% of current workers have successfully completed training to bridge skills gaps.

Over four in five companies plan to adopt education and workforce development technologies in the next five years.

Companies have various strategies, including upskilling, reskilling, and adopting emerging technologies, to address the skills gaps in their workforce between 2023 and 2027.