Imagine a crisis that forces your company’s employees to change the way they work almost overnight. Despite initial fears that the pressure would be too great, you discover that this new way of working could be a blueprint for the long term. That’s what leaders of many companies around the globe are finding as they respond to the COVID-19 crisis.
Consider the experience of one pharma company with more than 10,000 sales reps. In February, it switched from an offline model to a 100 percent remote-working one. As the containment phase of the crisis gradually recedes, you might expect remote working to fade as well. However, the company now plans to make a 30 percent-online–70 percent-offline working model permanent, thus leveraging the freshly developed
skills of its sales reps.
Even before the current crisis, changing technologies and new ways of working were disrupting jobs and the skills employees need to do them. In 2017, the McKinsey Global Institute estimated that
as many as 375 million workers—or 14 percent of the global workforce—would have to switch occupations or acquire new skills by 2030 because of automation and artificial intelligence. In a recent
McKinsey Global Survey, 87 percent of executives said they were experiencing skill gaps in the workforce or expected them within a few years. But less than half of respondents had a clear sense
of how to address the problem.
The coronavirus pandemic has made this question more urgent. Workers across industries must figure out how they can adapt to rapidly changing conditions, and companies have to learn how to match those workers to new roles and activities. This dynamic is about more than remote working—or the role of automation and AI. It’s about how leaders can reskill and upskill the workforce to deliver new business models in the post-pandemic era.
To meet this challenge, companies should craft a talent strategy that develops employees’ critical digital and cognitive capabilities, their social and emotional skills, and their adaptability and resilience. Now is the time for companies to double down on their learning budgets and commit to reskilling. Developing this muscle will also strengthen companies for future disruptions.
In this article, we offer six steps leaders can take to ensure that their employees are equipped with the skills critical to their recovery business models.
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Current trends are accelerating the need to enhance skills
Remote working was gaining currency before the crisis, but the pandemic has shown that telecommuting is here to stay. A recent Gartner CFO survey
revealed that almost three in four CFOs plan to
“shift at least 5 percent of previously on-site employees to permanently remote positions post-COVID-19.” Although many employees “learned by doing” during the first phase of the crisis or received “quick and dirty” training, continued remote working will probably keep posing an upskilling challenge. For example, sales forces will have to shift from setting up video meetings to managing customer relationships effectively in remote settings.
Companies also face a learning curve as managers figure out how to lead their teams virtually as they build social capital and how to maintain cohesion without the benefit of informal coffee, lunch, or
corridor chats. As companies contemplate returning to the workplace, a new set of skills is also likely to emerge for the transition.
During the Ebola crisis, for example, a company operating in West Africa set a goal of rapidly improving its post-crisis performance. It executed a large-scale skill strategy that made the return to the physical workplace smoother, introduced new skills and training that boosted performance, and, last but not least, worked to create a more deeply engaged workforce. The company distinguished between critical and noncritical skills for the return and, realizing that its workforce lacked flexibility, moved to upskill people in adjacent skill areas. For instance, truck drivers learned how to be excavator operators. This approach yielded multiple benefits for the organization.
The learning landscape has changed in ways that will foster teaching new skills to employees, wherever they may be. COVID-19 has accelerated the adoption of fully digitized approaches to re-create the best of in-person learning through live video and social sharing. This transformation makes it possible to scale learning efforts in a more cost-effective way and permits greater personalization for learners—and in turn greater effectiveness.
COVID-19 has accelerated the adoption of fully digitized approaches to re-create the best of in-person learning through live video and social sharing.
Three skilling trends are likely to speed up after the crisis ends
Chief learning officers (CLOs) can renew their learning organizations by building digital training programs and creating an ecosystem of learning partners to produce and deliver digital content rapidly to a broad base of employees. To do so they will have to master three trends.
New skills for the ‘distance economy’
The crisis has accelerated the levels of digitization to help reduce avoidable physical interactions. This has meant finding ways to reinvent work and, in some cases, a partial disruption of jobs and changes
in the way workers perform them.
For example, the UK healthcare system has seen years of digital evolution take place within weeks. In 2019, less than 1 percent of appointments took place via video link, with the vast majority in person.
Now, doctors assess 100 percent of patients by phone, with only about 7 percent proceeding to face-to-face consultations. This shift has meant that clinicians must learn how to do effective and safe remote diagnoses. Discussions are now moving to ways of locking in this progress after the pandemic.
A similar pattern is emerging globally for tech-based medical care. In Indonesia, where there are four doctors per 10,000 people (compared with 42 per 10,000 in Germany, according to the World Bank), telehealth firms have long been trying to close the gap. The COVID-19 crisis is consolidating this trend as Indonesia’s government turns to these firms to deliver remote consultations and to get medications prescribed and delivered.
Other sectors have had to train the workforce in new skills as they repurposed their operations to battle the pandemic. For example, consumer banks needed to increase employee cross-training in specific services as demand for mortgage-refinance applications surged. Banks also had to train employees in empathy as they helped distressed clients use digital tools and new products and services.
Imbalances in talent supply and demand
COVID-19 has changed not only how people work
but also how they shop and eat, as well as basic
patterns of movement and travel. In this way, the
pandemic is setting up what could be lasting
employment-landscape shifts that could require the
large-scale reskilling of new workers.
For example, the pandemic has accelerated the
trend toward e-commerce rather than brick-and-mortar sales. Early indications from China show
that new customers—specifically, people aged 36
and older and residents of smaller, less prosperous
cities—have begun to shop online in greater
numbers through the crisis. In Europe, 13 percent
of consumers said in early April that they were
planning to browse the sites of online e-tailers for
the first time. In a virtual roundtable held in
March, many executives based in China shared
their expectation that consumers will now move
even more quickly to e-commerce.
In the United States, the retail and hospitality-and-food-service sectors account for 42 percent
of vulnerable jobs, while some sectors, such
as groceries, are hiring two million to three million
additional workers. In the United States, Uber
introduced Work Hub, saying it is a way for gig-economy drivers to find work, whether internally or
at other companies (such as CareGuide, Domino’s,
and Shipt) that are hiring during the crisis.
Digital talent-marketplace platforms are allowing
companies to bridge the supply–demand mismatch,
serving as the connection between companies that
are hiring and workers who will need some degree of
reskilling. McKinsey has provided research on the
US job market to Talent Exchange, which opened on
April 6 and within two weeks had 600,000 open
jobs on the platform.
Changes to supply chains
With sourcing and production moving closer to
end users, the crisis could trigger a restructuring
of supply chains. As companies localize or
regionalize them, that will shift which skills are
needed and where.
Global companies may move production closer
to the point of sale. Japan’s automakers and South
Korea’s electronics players may accelerate
the diversification of the manufacturing footprint
beyond China. In France, President Emanuel
Macron has confirmed a pre-crisis program to
relocate strategic industries back home. As
a consequence, some core strategic or automatable
activities will probably be onshored in the next
12 to 18 months to build up domestic value chains
for critical products and industries, like food
In some cases, these changes may require relocating
activities to other countries. Companies may
pick up talent locally (through talent exchanges,
for instance) but then will have to get new
employees up to speed on their new roles. This
is a reskilling challenge—but not one inside
the walls of a company.
Six steps to reskilling
To make sure that organizations thrive after the
crisis, leaders and their teams can take six steps to
build workforce skills now. The first three will
help define your strategy and the last three will help
you execute it.
1. Rapidly identify the skills your recovery business model depends on
As companies decide on strategies that will shore up
the future of the business, they need to map out
which skill pools will disproportionately affect it and
drive it forward. To do this, they should quickly
identify crucial value drivers and employee groups.
Specify the exact contributions of these roles
to value creation and reimagine how their day-to-day work will change as a result of value shifts.
Identify which shifts in activities, behavior, and skills
are needed. Specify the quantity and type of
people you need. For example, if you are moving
from in-store sales to predominately home
deliveries, your tech team and logistics coordinators
will have a greater impact on the new strategy
than they did on the old one. They may also need a different skill set to facilitate the increase in
demand and customer expectations.
2. Build employee skills critical to your new business model
Start upskilling the critical workforce pools that will
drive a disproportionate amount of value in your
adjusted business model. The first step is to build
a no-regrets skill set—a tool kit that will be
useful no matter how an employee’s specific role
may evolve. Focus your investments on four
kinds of skills: digital, higher cognitive, social and
emotional, and adaptability and resilience (Exhibit 1).
The skill building in these four areas should
be predominately digital and self-paced but not
tailored to the individual in most cases.
3. Launch tailored learning journeys to close critical skill gaps
As companies prepare to reimagine and ramp up
their business models, it is important to go deeper
on strategic workforce planning. Leaders need
a detailed view not only of the core activities that
critical groups will begin undertaking in the
next 12 to 18 months but also of which skills each
of these groups will need.
For instance, a Chinese conglomerate shifted
to strategic planning after managing the immediate
effects of the pandemic. It looked at ordering
remotely for the next season, began to work on
revised three-year plans that included significantly
more aggressive omnichannel targets, and transformed its supply chain to be more agile,
along with other moves to expand the business.
Taking into account the skill gaps these
initiatives created, the conglomerate tailored its
reskilling journeys and delivery plans to help
employees in critical roles build the skills needed
to meet their specific objectives.
And when an international bank realized that its
regular face-to-face sales model faced disruption, it
concluded that virtual selling could become a
competitive advantage if done well. The bank then
began a tailored upskilling journey for its sales
reps to deepen their core sales skills while improving
their virtual ways of working.
As the operating model evolves quickly to
accommodate a rapidly changing environment, the
key is to iterate strategic workforce planning to
determine the right skills to develop in a “just in time”
manner. These learning journeys are tailored to
each specific role, but companies can increase their
scale and cost effectiveness by delivering the
majority of the training digitally.
Such journeys can be supplemented by digital tools
that re-create the best of in-person learning—for
instance, social-sharing tools and live video sessions
that create a deepened sense of cohesion in
cohorts and help build skills, such as empathy, that
usually depend on in-person learning.
4. Start now, test rapidly, and iterate
In a survey, we found that most companies that had
launched successful reskilling programs said
they were better able to address skill gaps caused
by technological disruptions or to implement
new business models or strategies. And companies
that viewed their reskilling programs as unsuccessful were still glad they had gone through the
process, with a majority saying they were
prepared to take on future skill gaps. The lesson
here is that simply getting started on reskilling
programs makes organizations better prepared for
potential future role disruption—and is preferable
to waiting (Exhibit 2).
Organizations shouldn’t launch reskilling initiatives
and then disband them after the crisis passes;
whatever talent reskilling or redeployment you do
now should also be used to expand your reskilling
capabilities going forward. By building your own
institutional learning, and capturing what works and
what doesn’t now, you put yourself in a position to apply those lessons during disruptive events
in the future.
5. Act like a small company to have a big impact
The reskilling programs at small organizations (fewer
than 1,000 employees) are often more successful
than those at large ones, the global survey showed.
This may surprise some, since larger companies
generally have access to more resources.
But smaller companies are often more successful
at following agile principles—making bold moves
more quickly because they don’t have to shift
around large groups of people to try something new.
They also may be more willing to fail, because they
have fewer layers of approval to go through.
At the same time, smaller companies tend to have a
clearer view of their skill deficiencies, so they’re
better at prioritizing the gaps they need to address
and at selecting the right candidates for reskilling.
That’s not to say larger organizations can’t be agile
when it comes to reskilling, just that it can be
harder for them.
6. Protect learning budgets (or regret it later)
Companies should not cut their employee-training
budgets. According to the Training Industry Report,
US data during and after the Great Recession
showed a significant drop in overall training expenditures in 2009 and 2010, followed by a surge in
2011 and a drop back to 2008 levels in 2012. What
this tells us is that if companies cut their learning
budgets now, they’re only delaying their investment,
not netting a saving—especially since the current
crisis will require a larger skill shift than the 2008
financial crisis did.
Use your training budget to make skill building
a key strategic lever for adapting to the next normal.
Don’t waste two to three years and forego the
efficiency and resilience you could develop now.
What you can and should do is focus on the
resilience of your learning ecosystem: make it both
more digital (including in-sync digital components
to replace in-person ones) and more accessible
to your employees. Finally, leverage the ready-made
learning journeys and objects of external partners.
We know from past crises that companies must act
quickly to build up critical workforce capabilities.
The coronavirus pandemic has accelerated a trend
in workplace dynamics that was already underway
through automation and AI, shifting marketplaces,
and changing workplace roles. To respond,
leaders should pursue a broad reskilling agenda that
develops employees’ digital expertise and their
cognitive, emotional, and adaptability skills. Companies can’t be resilient if their workforces aren’t.
Building your reskilling muscle now is the first step
to ensuring that your organization’s recovery
business model is a success.