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Perspectives

Reskilling in the Digital Age

2018-08-22


As the fourth industrial revolution sets in, organizations must contend with fast-changing job requirements, which often illuminate acute skills gaps. New approaches to employee training and career development are needed.

Technology is rewriting the employer-employee contract. From working away at low-level rote and routine tasks, computers have risen to handle an increasingly complex array of processes. This means enterprises must grapple with a problem they’ve never faced before at scale: How to balance automation with retaining talent, fostering innovation.

Over the past decade, the role of computer skills (or digital skills in today’s terms) in the skill set sought by organizations has increased steadily, according to the Brookings Institution. In 2002, 56% of U.S. jobs required low amounts of digital skills, and 40% required medium skills, while only 5% required high digital skills. As of 2016, the tables have turned: high digital skills now comprise 23%, while jobs requiring low digital skills have fallen to 30%.

For enterprises, this has historically resulted in a steady churn of talent. But with the rise of artificial intelligence (AI), this trend has been upended. Take for example Alibaba’s claim that its AI, which apparently has passed the Turing test, is capable of producing 20,000 lines of copy in a second at the press of a button. This is bound to have a profound effect on the inner workings of ad agencies and online marketing.

For starters, it will, over time, free up human resources to focus on bigger, more challenging tasks that require a human touch. But what does this mean for the enterprise workforce mix over the long run, given that the quality of the AI algorithms and resulting output is bound to improve?

One possible scenario is already unfolding in the form of gaps in the talent and skills needed to run these technologies. A survey by Cognizant and the Economist Intelligence Unit (EIU) found that 94% of respondents cited a moderate or severe digital skills gap, which is hampering their organization’s efforts to go digital. In India, for example, the industry body NASSCOM found that 40% of the country’s four million IT workforce will need reskilling in the coming years to keep up with the accelerating pace of technological developments in areas such as automation, analytics and machine learning.

This gap in skill sets is pervasive across industries that have embraced new technologies. In Singapore 56% of local businesses are looking to upgrade their existing information and communication technology (ICT) skills, while 49% want to deploy technologies to reduce their manpower requirements. Moreover, with 57% of the jobs expected to be disrupted belonging to women, it is imperative for enterprises to address this challenge and ensure that workforce diversity continues to advance. For organizations, this trend suggests the need for a complete makeover of how they view their talent pools and approach employee development.

What this Means for the Enterprise

Digitization’s impact on business models is well documented; its impact on how enterprises must evolve talent management remains a work in progress. 

The scale of the challenge for enterprises was encapsulated by a World Economic Forum (WEF) report, which observed that in Organization for Economic Co-operation and Development (OECD) countries over one in four adults reported a mismatch in their current skills and the qualifications required for their jobs. Moreover, 35% of the skills demanded across industries will change by 2020. The skills gap challenge is heightened by the fact that not all countries are equally able to respond due to factors such as quality of education and the cost incentives of incorporating automation.

Many organizational leaders are saddled with the dual task of driving digital innovation and building the requisite talent pool. They have to not only manage the immediate needs of the organization, but also create a sustainable long-term solution. We believe that in the next three years, emphasis will be placed on creating a clearer flight path for digital talent. It is critical to bring about this change because the skills gap will ultimately affect the organization’s digitalization efforts.

Addressing the Reskilling Challenge

The shortage of digital talent has meant that enterprises are in a rush to acquire as much talent as they can. A survey by Randstad found that only 11% of companies want to train and reskill their teams, while 59% say they plan to go on a hiring spree. However, for most organizations this may not be an optimal strategy as it reflects a lack of understanding of extant talent. It could also lead to unnecessary layoffs or compromises given the finite talent pool (i.e., forcing round pegs into square holes). It therefore makes sense for organizations to look inward in their quest to create a digital labor force.

Figure 1

Many have already joined the reskilling bandwagon. For example, IT service companies— including Salesforce.com, CA Technologies, HPE and Pegasystems — have joined the WEF’s SkillSET initiative that aims to reskill more than one million workers over the next three years. (Disclosure: Cognizant is among the founding partners) Some have launched their own reskilling initiatives. AT&T is investing $1 billion to train almost half of its 250,000 strong workforce, nearly 100,000 of whom have jobs that may not exist in the next decade. Hackathons and incubator programs as recruitment tools have also found some takers.

Open source, not-for-profit software developer Mozilla, meanwhile, has launched the Open Badges initiative that aims to simplify the documentation of skills acquired by an individual as well as capturing the intangible qualities such as soft skills and professional qualities. This could help organizations identify the staff members best suited for the digitally enabled jobs that are being created.

Taking a Long-Term View of Reskilling

Businesses concerned about the impact of digitization on their talent pools need to take a long-term view of the potential fall out and next steps. After all, innovation is driven by people with the help of technology. Companies that are able to create a blend of technology and talent are best placed to succeed. 

While this may seem like a generic statement that applies to any era of technology, leaders need to consider the pervasive impact that automation is going to have on their industries, customers and employees. As the business landscape is transformed by automation, algorithms and emerging digital platforms, organizations need not only the right tools, but also the right people to wield them. 

A Culture of Learning

With technology evolving faster than ever, and its impact becoming more pervasive, the need for continuous learning has never been stronger. For employees to stay up-to-date with the latest skills, it is important that organizations create a culture that encourages continuous learning. However, it is important to make sure that learning is not just encouraged but also made interesting. This can be done by creating an employee Code Halo,TM a virtual identity that allows organizations to build a richer understanding of their employees and create learning content around their interests and needs. Nevertheless, a change like this should begin at the top and be driven by the leadership.

For more on this, download our paper “People — Not Just Machines — Will Power Digital Innovation,” read our Digitally Cognizant blog series on reskilling, or contact us.

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Reskilling in the Digital Age