Not long ago, Bosch announced a staggering plan to invest €2bn in retraining a portion of its 400,000 employees. As Europe’s largest car parts supplier, Bosch aimed to mitigate further job losses as the automotive industry transitions from traditional combustion engines to electric vehicles. The issue extends far beyond car-making.
McKinsey & Company forecasts that by 2030, one in 16 workers – totaling over 100 million across eight economies – may need to change occupations. This underscores the pressing need for reskilling and upskilling initiatives, driven primarily by rapid technological advancements automating jobs and generating demand for new skills.
Additionally, globalization and shifting market dynamics necessitate workers to adjust to new industries and roles. This interconnectedness has boosted trade, communication, and mobility across borders, often resulting in the outsourcing of jobs to countries with lower labor costs, displacing or rendering jobs in traditional sectors obsolete.
This process is also driven by shifts that occur within markets over time, due to changes in consumer preferences or regulatory overhauls. Tasks within industries tend to become more complex as new procedures, tools, and regulations emerge.
In the financial services industry, the proliferation of complex financial products like collateralized debt obligations (CDOs) and credit default swaps (CDS) has heightened the complexity of risk management. Assessing credit, market, and liquidity risk for these instruments poses unique challenges, demanding specialized knowledge and skills from risk managers. Continuous learning and skill development are essential for these professionals to remain relevant in their field, a necessity that extends beyond banking.
Anticipation is rising for generative artificial intelligence (GenAI), a groundbreaking technology capable of mimicking human output in text, images, and code. Its potential to automate routine tasks and cut costs is attracting interest across various industries, though it may also lead to task displacement.
One study found that around 80% of the US workforce may have at least 10% of their work tasks affected by large language models (LLMs) such as ChatGPT. In sectors where language plays a prominent role, such as law, advertising, and finance, approximately 19% of workers could see at least 50% of their tasks impacted.
While GenAI is proficient at automating tasks that are routine and repetitive, it cannot emulate certain human qualities such as creativity, critical thinking, and emotional intelligence. Consequently, human skills that emphasize these unique attributes will become more valuable as GenAI becomes more prevalent across the economy.
Human-centric skills like problem-solving, adaptability, and innovation will always be in high demand. Problem-solving involves analyzing complex situations and finding effective solutions, a task GenAI may struggle with independently. Adaptability requires adjusting to new circumstances and learning from experiences, qualities difficult to program into GenAI systems. Innovation demands creative thinking and connecting diverse concepts, areas where GenAI may lack proficiency without human input.
Therefore, AI-human collaboration will be crucial, requiring people to acquire new skills such as AI literacy – knowledge about how AI systems work, their capabilities and limitations, as well as their potential impact on society.
What is more, new AI-specific roles are emerging, underscoring the need for organizations to recognize and value new skills like data labeling (annotating or tagging data to make it understandable and usable for machine learning algorithms) and prompt engineering (the process of designing and refining queries to effectively elicit desired responses from LLMs). Organizations will also need to provide opportunities for employees to develop these capabilities.
“Human-centric skills like problem-solving, adaptability, and innovation will always be in high demand.”
An increasingly common practice among organizations is “quiet hiring” – investing in the reskilling and upskilling of the existing workforce, rather than buying in talent. Quiet hiring is gaining in appeal because of persistent tightness in labor markets, which have been resilient in many advanced economies, upending expectations for deep recessions.
Though not everyone is convinced, quiet hiring offers several benefits to organizations. Firstly, it helps retain valuable employees who are already familiar with the company’s culture and processes. This reduces turnover and the associated costs of hiring new employees – averaging $4,700 per hire, according to the Society for Human Resource Management (SHRM).
Secondly, reskilling and upskilling programs can enhance employee engagement and motivation, leading to increased productivity and innovation. Lastly, it fosters a learning culture within the organization, helping to position the company as a desirable employer in the competitive labor market.
Outsourcing firm Accenture, for instance, allocates more than $1bn annually towards learning and training initiatives for its 700,000-strong workforce, amounting to 40 million training hours each year. The company says that this investment has helped the firm reach its goals, having doubled the number of highly skilled employees in its Data & AI practice to 80,000. Moreover, the company is rolling out training in GenAI for 250,000 people by the end of 2024, coming on top of the 600,000 staff it has already trained in the basics of AI.
That said, workers face several challenges when learning new skills. One is the time commitment required for training while juggling their existing job responsibilities. Additionally, adapting to new technologies and methodologies can be daunting; it may require overcoming a steep learning curve.
Lack of access to quality training programs and resources, as well as financial constraints, can also pose challenges. A survey last year conducted by climate organizations and trade unions such as Greenpeace and RMT showed that offshore oil and gas workers spent an average of £1,800 annually from their own pockets on reskilling in renewable energy.
Lastly, fear of job displacement or uncertainty about future career prospects can create anxiety and resistance to change. Consider that tech firms including Microsoft, eBay, and PayPal have eliminated over 50,000 jobs this year alone, as, analysts say, they restructure their workforce to prioritize investment in GenAI.
This underlines the difficulties organizations encounter when trying to implement training programs for their employees. Specifically, they must deal with issues such as the financial expense associated with providing training, as well as the potential disruptions that training activities can cause to the normal flow of business operations.
These obstacles can make it challenging for organizations to invest in training initiatives, despite recognizing their importance for employee development and organizational growth. To overcome these challenges, managers and leaders should consider:
Moreover, successful reskilling and upskilling programs require a holistic strategy that encompasses several key elements. These include pinpointing the precise skills and knowledge gaps existing within the organization, crafting customized training initiatives that resonate with both business goals and employee requirements, and utilizing a diverse array of learning methodologies like online courses, workshops, mentorship schemes, and hands-on training sessions.
Additionally, continual support and resources should be provided to facilitate ongoing learning and skill enhancement. Cultivating a culture of learning is crucial, alongside fostering opportunities for employees to implement their newfound skills in practical, real-world situations.
Moving forward, as industries evolve rapidly, reskilling and upskilling initiatives are imperative for both employees and organizations. By addressing challenges and embracing a holistic approach, businesses can effectively navigate transitions and empower their workforce for future success.
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