Through emerging tech such as digitization, automation and artificial intelligence, the future is certainly bright; productivity gains, speed and convenience, and a movement away from menial and dangerous jobs are all considered positive. Though if you ask many CEOs and HR leaders, they may say they feel blindsided by the downsides of these disruptive technologies. As these innovations are transforming the nature of work, millions will continue to be challenged to learn new skills and switch occupational categories if they are to fully participate in the new economy.
Many companies are already facing the realities of this new world. A recent McKinsey survey found that 60 percent of global executives expect that up to half of their organization’s workforce will need retraining or replacing within five years. And more than one-third said their organizations are not prepared to address the skills gaps they anticipate.
How can organizations better prepare for what’s coming? The most important step is a shift in how they view their talent supply. Rather than focus on titles and traditional roles, skills – the ones the organization needs, the ones they have, and how that mix changes over time – should become the priority. Sourcing these skills will require much more creative ways to meet the inevitable mismatches, especially as the market’s gap between the supply of skills and the demand for them continues to widen.
Consider the European bank whose market position was threatened by new, more digitally savvy rivals. Though the bank’s leaders were able to develop a plan to address this threat, the organization’s existing talent pool was not able to execute it.
To respond to the imbalances, the bank developed a range of interventions, such as upskilling programs to help prepare employees for the changing aspects of their jobs; reskilling and retraining programs were designed to help employees secure new roles in the company.
Adjusting the skills of a workforce requires commitment and attention from senior management, and a good way to spark a fruitful C-suite conversation about talent supply is to start with a thought exercise that can help break down an otherwise intractable problem into manageable chunks.
While talent shortfalls arise for many reasons, the supply-side remedies can be summarized in three watchwords: Should we build on our existing skills? Should we acquire them? Or should we “rent” them?
A global manufacturer investigated these options as it looked for ways to fill several looming gaps. One of the biggest problem areas was in data science, which was complicated by the company losing ground to high-tech firms as an employer of choice. A talent-supply forecast indicated that the company’s data scientists would be eight times more likely to leave than other colleagues.
Subsequent analysis helped the manufacturer develop a plan for more meritocratic career paths and redesigned leadership tracks to keep employees engaged and happy. The company is now working on simple changes to its recruitment and interviewing processes, to be more responsive and to help make candidates feel more valued.
Another way companies can acquire skills en mass is through mergers and acquisitions, or – as some in the tech industry might say – “acquihiring.” One example of this is the national retailer that bought a social media company to form the nucleus of what would become its digital-technology unit.
To truly reorient their organizations around skills and not just roles, company leaders will need more than just a mindset shift. HR will need to sharpen its own skills in new areas, such as managing the risks associated with gig work and upskilling and reskilling their employees. Everyone must be prepared to evolve if they are to be effective in helping the larger enterprise adapt to the changing nature of work.
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