The Organisation for Economic Co-operation and Development issued a bold prediction back in 2019. It anticipated that new automation technologies would likely remove 14% of the world's jobs during the next 15 to 20 years and drastically alter another 32%. More than 1 billion people were included in those depressing statistics, and they didn't even take into account ChatGPT or the current wave of generative AI that has just swept the market.
The demand for talents is changing quickly in the modern period due to technological advancements. Not only can new technologies manage an increasing number of repetitive and manual activities, but they can also carry out more complex forms of knowledge-based work, including research, coding, and writing, which have traditionally been seen to be immune to disruption. The typical skill half-life is
now less than five years, and in some tech fields it’s as low as two and a half years. Not all knowledge workers will lose their jobs in the years ahead, of course, but as they carry out their daily tasks, many of them may well discover that AI and other new technologies have so significantly altered the nature of what they do that in effect they’re working in completely new fields.
To cope with these disruptions, a number of organizations are already investing heavily in upskilling their workforces. One recent BCG study suggests that such investments represent as much as 1.5% of those organizations’ total budgets. But upskilling alone won’t be enough. If the OECD estimates are correct, in the coming decades millions of A fundamental and fundamentally complex societal dilemma may force people to completely reskill, which would necessitate that they not only learn new skills but also use them to switch careers.
Companies need to start taking this challenge seriously right away since they have a crucial role to play in doing so. Now that it is clear that a reskilling revolution is necessary, what must businesses do to make it happen? Of those that have taken on the reskilling issue, only a small number have done so successfully, and even their efforts were frequently modest and had little impact.
From our research we came to know about common issues, listened to accounts of early successes, and learned that many of these companies are thinking about why, when, and how to re skill in key new ways
In this article we’ll explore those shifts. We’ll show how some companies are implementing them, and we’ll review the unexpected challenges they’ve encountered and the promising wins they’ve achieved.
Companies have frequently turned to reskilling during disruptive periods when many jobs are threatened in order to lessen the impact of layoffs, allay social responsibility guilt, and build a positive PR narrative. However, the majority of the businesses we spoke with have moved past that limited perspective and now see reskilling as a strategic priority. That development is a result of the labour market going through significant changes as a result of the ageing working population, the creation of new occupations, and the growing demand for workers to acquire job-specific skills. Effective reskilling initiatives are essential in light of this because they enable businesses to swiftly achieve a competitive advantage by cultivating talent that is not easily available in
Several large companies have adopted this approach in recent years. For example, Infosys has retrained over 2,000 of his cybersecurity professionals with various relevant skills and proficiency levels. Vodafone aims to meet 40% of its software developer needs with in-house talent. And through Machine Learning University, Amazon has enabled thousands of employees who initially had little experience with machine learning to become experts in the field.
The average half-life of a skill is currently less than five years, and in some technology fields it is only two and a half years. For millions of workers, more training is not enough. Some companies now view reskilling as a core part of their employee value proposition and a strategic means of balancing workforce demand and supply. These companies encourage employees to train for roles that appeal to them. Mahindra & Mahindra, Wipro and Ericsson have policies, tools and IT platforms that facilitate reskilling of resources and available jobs. The same goes for McDonald's.
At McDonald's, restaurant employees have access to an app called Archways to Opportunity that maps skills learned on the job to career paths within the company. Whether it's a company or another industry. Finally, some companies are using reskilling to tap into a broader talent pool and attract candidates who might not otherwise have been considered for open positions. Headquartered in Mumbai and with over 130,000 employees, ICICI Bank operates intensive academy-like reskilling programs that prepare graduates from diverse backgrounds for frontline leadership roles.
The program reskills approximately 2,500 to 4,000 employees each year. CVS has taken a similar approach during the COVID-19 pandemic, hiring employees, some of them furloughed hospitality workers, to ensure capacity for critical vaccine and testing services. Conducted training and training for new employees.
Traditionally, retraining has been considered part of an enterprise's overall learning function. In this case, the responsibility for program design and implementation often lies with the human resources department, and its failure or success can be determined within a very narrow range, in terms of the number of trainings conducted, the cost per learner, and similar trainings. will be evaluated. specific indicators.
According to his recent BCG report, only 24% of companies surveyed believe there is a clear link between corporate strategy and upskilling initiatives. Investing in reskilling clearly requires deep involvement from HR leaders, but unless the rest of the organization understands the strategic relevance of these investments, such efforts will be difficult to succeed. It is extremely difficult to marshal the necessary, persistent and decentralized effort. In most organizations we studied, upskilling efforts are clearly supported by senior leaders, often the CEO or chief operating officer.
They work hard to make the connection between reskilling and strategy clear to the rest of the company, and to help leadership and management teams understand their shared responsibility to implement these programs. For example, Ericsson has developed a multi-year upskilling and reskilling strategy as part of its ongoing digital transformation. This effort includes systematically defining strategically relevant critical skills that address various accelerator programs, skill journeys, and skill shift objectives, most of which will equip communications professionals with AI and We specialize in transforming data science professionals.
The company considers this a high-priority, high-investment project and has included it among the goals and key results that management reviews on a quarterly basis. Ericsson has trained over 15,000 employees in AI and automation in just three years. In his project Transitions, the artist Noma Bar plays with the perspective of reinterpreting old toys from his daughter's childhood. Similarly, CVS management has made training and reskilling an integral part of the company's business strategy. Each company leader is now responsible for designing and implementing plans to reskill employees to help the company achieve its goals, and their abilities are taken into account in performance reviews. Amazon is also known for its commitment to retraining as a key strategic objective, and now mentions it prominently in its leadership manifesto for managers. By making this commitment visible, Amazon can scale its reskilling programs.
To design and implement ambitious reskilling programs, companies need to go beyond just training employees to create an organizational environment conducive to success. To achieve this, you need to ensure the right attitude and behavior from both employees and managers. From this perspective, reskilling is similar to change management efforts in that it requires focusing on many different tasks at once. Let's consider some of the most important ones. Understand supply and demand. To create a successful reskilling program, companies need a solid understanding of supply (skills available internally and externally) and demand (skills needed to compete). A helpful way to develop this understanding is through the use of a "skills taxonomy," a detailed description of the skills required for each job within a company. Employers used to go to great lengths to create such taxonomies from scratch, but many large companies now rely on external providers to do much of the work.
For example, HSBC took the taxonomy published by the World Economic Forum and slightly adjusted it to add specific features to some of its businesses. Similarly, SAP, which previously maintained an internal classification of 7,000 competencies, recently began working with Lightcast, which maintains a continuously updated competency database. However, developing a competency taxonomy is only the first step. Next comes the difficult task of deciding which skills to assign to which jobs. Managers from different departments may have different opinions on this. Such disagreements are often a symptom of a deeper misalignment, and companies must resolve this issue before embarking on a major retraining effort.
Retraining programs require a lot of time from participants. Therefore, it is important to strive to reduce the associated risks, costs, and effort. Leaders also need to determine what skills they will need in the future. This is a dynamic process that is important for strategic reskilling programs. To do this successfully, you need to focus on understanding what skills your current strategy requires. Here you need to develop a rigorous strategic methodology for workforce planning. European insurance group Allianz is doing some interesting work in this area. We regularly translate business growth projections into talent needs, focusing on the number of people needed for different jobs and the skills they require. The model is updated as part of the annual planning process, is based on economic scenario planning, and takes into account the impact digitalization may have on the workforce.
Traditionally, candidates have been hired for training opportunities and internal roles based on their degree and relevant work experience, but this is clearly not the case for retrained workers. A well-developed competency taxonomy can help by allowing organizations to consider enrollment policies in light of adjacent qualifications, and can ease the transition from one set of qualifications to another. Novartis introduced an internal AI-powered talent marketplace that predicts, assigns, and delivers roles and projects related to employees' skills and goals. Our research shows that for reskilling programs to be successful, companies need to develop clear enrollment criteria for employees, but all employees have the right motivation and personality traits to be reskilled. I also found out that it doesn't have all the right combinations. Shaping the mindset of middle managers.
They are concerned that
(1) the employee will be unable to perform their regular job duties during retraining;
(2) that the employee will be unable to perform their regular job duties.
After retraining, the job can continue in its regular job and be transferred to another part of the organization. In either case, this can lead to 'talent hoarding', where managers seek to hold on to their favorite reports by denying opportunities to participate in retraining.
Several of the companies we spoke to are tackling this issue by making talent development an explicit leadership responsibility.
Wipro evaluates leaders based on their team's participation in training, and Amazon promotes leaders based on performance reviews that include the question, "How did you develop your team?" Middle managers may also be reluctant to hire reskilled workers because they believe they are less desirable than traditionally skilled workers.
This problem can be resolved by involving managers in the design and implementation of retraining programs and providing training on sensitivity and unconscious bias. No matter what form the resistance takes, role models from senior leaders who support retraining are critical to overcoming it. Building workflow skills.
Taking employees away from their day jobs to participate in training can be costly and logistically difficult. Also, adults tend not to like or learn well in classroom situations.
In the 2021 BCG survey, 65% of the 209,000 workers surveyed said they prefer learning on the job. Therefore, the best approach to retraining is to complete as much training as possible through shadowing, in-house apprenticeships, and probationary periods.
For example, ICICI Bank's reskilling program consists of a four-month on-the-job internship in which employees participate in simulation training for the leadership role they aspire to, and an eight-month on-site assignment that includes: I am. Close monitoring of bank branches and current managers.
The employee must be placed in a new position. Interview data shows that clarifying the target role in advance increases employee interest in reskilling by clarifying new career paths, and makes reskilling itself job-specific. It is known that this increases effectiveness. Newly qualified employees need different types of support in their new workplaces to successfully integrate. We can help you learn new work norms and culture, build networks, develop soft skills, and more. Coaching and mentoring are particularly effective tools here. Amazon is showing leadership in this space. The company operates a variety of mentoring programs for retrained employees, including a buddy system through its Grow Our Own Talent program, which connects past and present program participants. The company also offers career coaching for employees who are mastering particularly difficult transitions, such as from warehouse worker to software developer.
Employees want to be reskilled – if it makes sense. Many of the companies we spoke to said that one of their biggest challenges was simply convincing employees to participate in reskilling programs. This is not surprising. Retraining requires a lot of effort and can make a huge difference in your life, but the results are not guaranteed.
The OECD reports that only a small proportion of workers typically participate in standard training programs, and those that do are often those who need them the least. ... Apparently ... However, workers may be more willing to participate in retraining than previous data suggest.
For example, according to BCG data, 68% of workers are aware of upcoming disruptions in their field and are willing to retrain to maintain competitive employment. According to our interviews, the key to success in this area is to treat employees with respect and make clear the benefits of participating in retraining efforts.
As one of our researchers explains, "The secret to scaling a reskilling program is to create a product that employees actually like."
I have some suggestions. Treat your employees as partners. Because retraining programs often involve organizational collapse, job losses, or at least job changes, managers often avoid talking openly about the motivations for the programs or the opportunities they provide. However, employees are more likely to participate if they understand why the program is being implemented and are involved in its creation. Several of the companies we spoke to recognized this and sought to be honest and clear about why they launched reskilling programs and hired employees early.
For example, a major automaker told its diesel engineers that changes in the auto industry meant their skills were less and less needed. She presented her program as a way for them to secure new jobs and job security in the coming years. Companies also said that when designing and implementing retraining programs, it is important to coordinate early with works councils and trade unions and involve them in supporting the program.
Retraining programs require a lot of time from participants. Therefore, it is important to strive to reduce the associated risks, costs, and effort and achieve (almost) guaranteed results. Amazon lets its employees earn everything from bachelor's degrees to certificates through its Career Choice program, and it pays for everything upfront.
This has proven to be a key element in the expansion of the program, which already has more than 130,000 participants. CVS uses an effective "on-the-job training" model for new employees. Give the task enough time and attention. Because retraining involves a career change, it typically requires intensive learning, which is only possible if the employee has the time and mental space necessary to succeed.
To this end, at Vodafone he sets aside four days a year for employees to dedicate to learning and self-development. Bosch goes even further. To help the company's traditional engineers earn degrees and upskill in emerging fields, the Mission to Move program covers up to two days of his tuition and study time per week throughout the year. Participants may be given time off to prepare before the exam.
Of course, in industries where most employees work hourly or shift jobs, it can be more difficult to provide employees with the time and space to upskill. Iberdrola, a renewable energy company, faced this challenge when it came to digitalisation. With the introduction of new technology, the company realized that it needed to retrain its 3,300 employees in various hourly jobs. Managers worked closely with front-line supervisors to ensure that operations were not affected by employees taking time off for training. The company considered all training time to be work time and compensated employees accordingly.
Companies tend to view reskilling as an enterprise-level challenge and believe they need to do the work themselves. However, many of the companies we surveyed recognized that reskilling occurs within an ecosystem where many players play a role. Governments can encourage investment in reskilling through funds, policies and public programs. Industry can collaborate with academia to develop new skill-building methods. NGOs can then play a role in connecting companies' talent needs with disadvantaged and marginalized talent groups. Business federations may be able to address reskilling challenges more effectively than individual organizations. When designing reskilling programs for the rapidly evolving era of AI and automation, companies must tap into the potential of this larger ecosystem. We have identified several ways to do this.
Consider industry partnerships. Rather than viewing themselves as competitors for a limited talent pool, companies can significantly alleviate some of the challenges listed above by working together and implementing joint training initiatives. For example, industry-wide competency classifications provide a useful infrastructure and, in some cases, allow companies to pool the knowledge and resources they need to invest in specific types of skills, such as very new cutting-edge AI capabilities. Helpful. Individual organizations may not yet have the knowledge or ability to develop solutions themselves. Industry coalitions can also reassure participants that investing in learning can lead to broader opportunities in the future.
One example is the Technology in Finance Immersion Program offered by the Singapore Institute of Banking and Finance, a non-profit industry association. The program, with the participation of all major banks, insurance companies and asset management companies in the country, aims to build an industry pipeline of skills in key technology areas and meet the talent needs of the financial services sector. Masu. Similarly, within the European Union, various interest groups have formed the Automotive Skills Alliance, dedicated to “retraining and upskilling workers in the automotive sector.”