Structural changes in the labor market, including an aging population and the rise of the gig
economy, have created a persistent skills gap for employers. This mismatch in talent has
become a top challenge for businesses, educators, and policy makers. Businesses understand
that a predictable supply of workers is critical to their growth and viability. Policy makers are
seeing that persistent underemployment and a lack of opportunity deepen economic inequality.
And educational institutions are experiencing increasing demands from organizations to tailor
their offerings to the demands of industry. As a result, all are motivated to create a 21st-century
workforce that can serve both business and society. The major question is how these groups
can work together to address common goals.
McKinsey recently sat down with Jonas Prising, chairman and CEO of ManpowerGroup, to
discuss changes in the labor market and how organizations should adapt. Prising shared
his thoughts on identifying skills adjacencies and opportunities for upskilling, partnering with
educational institutions, and hiring based on an employee’s ability to learn as opposed to
current skill sets.
Interview transcript
McKinsey: What changes do you see happening in labor markets today?
Jonas Prising: We don’t believe labor markets are about to shift from 40-hour, full-time
employment to a freelance economy. Instead, we see increased segmentation, with many
more ways of how work gets done.
The labor market started as a primarily full-time employment economy; then part-time was
added. Our own contingent work and temporary staffing became an option. Then freelance
work came for many of the creative skill sets. And now we also have this ability to tap our work
resources to create a just-in-time, on-demand economy. We think it’s really an evolution in
a spectrum of opportunities that individuals will choose to pursue, in different ways and at
different points, depending on their personal preferences and circumstances.
McKinsey: How have employers responded to these changes?
Jonas Prising: Over the past 20 years, organizations have been consuming labor and not
growing talent. We need to think differently about attracting and growing talent internally. We
need to move away from a model of “come to us and we will employ you for the next 40 years”
to “come to us and after three to five years we promise you will have acquired skills.”
Organizations need to develop skills in employees that make them more marketable and
employable inside the organization but that also make them more marketable and employable
outside of the organization. And that is really the shift in employer brand promise that we
see occurring.
What we need to be aware of is that most of our legislation and support structures are aimed
at the traditional, full-time employment model. That’s where we see a lot of the evolution that
needs to occur, so we can facilitate the ability of individuals to leave certain roles, move to
others, and still feel that they can make a living and achieve their quality-of-life objectives.
We also see that individuals with in-demand skills are making different choices in terms of who
they choose to work for and why.
McKinsey: What are some of the innovative approaches to talent development that you’ve
seen?
Jonas Prising: We think understanding skills adjacencies is a big frontier that will emerge as a
result of data and artificial intelligence. We can now look at a person’s profile and understand
that without too much intervention and support she can acquire a new set of skills that will
make them tremendously more employable.
Last week I had the great opportunity to participate in the graduation of a class of veterans
who attended the Academy of Advanced Manufacturing, which is an initiative we created
with Rockwell Automation, a global leader in automating manufacturing equipment, and other
content providers. It’s a collaboration where we began by mapping the skills needed for future
manufacturing roles together with the Digital Manufacturing and Design Innovation Institute
in Chicago. We selected three specific roles that are the most in demand for those future skill
sets. Then we selected veterans and took them through a rigorous three-month course that
combines soft-skill training and technology training.
In the end, our placement rate was north of 95 percent. More important, those individuals are
now not only finding jobs but they’ve created career paths for themselves that will take them
further for many, many years—maybe even decades. It was really gratifying to see that in a very
short period of time, individuals were able to acquire new skills that doubled, or in some cases
tripled, their income.
We think understanding skills adjacencies is a big frontier that will emerge as a result of data and artificial intelligence.
McKinsey: Do you have other examples where skills adjacencies have helped to create new
pools of talent?
Jonas Prising: In Italy, a lot of the textile workers have been displaced due to competition from
China, which offers lower cost, faster delivery, and a just-in-time economy. At the same time
in the same region, but in a very different industry, composite materials were starting to take
off as a very important component for car manufacturing. The problem is it’s a highly skilled
manufacturing process and quite manual.
We were able to identify that the textile manufacturing workforce is the ideal workforce or talent
pool for these jobs because it has the ability for precision-based interventions, just as you need
when you are dealing with composite materials. A short cycle of training enabled the workers
to shift from the textile industry and its associated skills to a completely different industry where
the demand for those skills is extremely high.
Now, if you would have said to us, “Look, we think the best place to find manufacturing talent
for race cars is going to be the laid-off textile workers 50 miles from here,” we would have said,
“No, we don’t think so.” But we identified that these were actually adjacencies that could be
really useful, and it has turned out to be a great success story for those workers and, of course,
for the companies that now have a much wider talent pool.
It’s really about partnering with stakeholders and providers that have different levels of
expertise and capabilities and then putting it all together.
McKinsey: What other trends are you seeing in terms of reskilling and upskilling?
Jonas Prising: We believe that the next evolution of assessments capability is going to be in
what we call LQ—the learnability quotient. Your future employability is not going to be based
on your hard skills and soft skills but on your ability to acquire new knowledge as you evolve in
your career. You don’t get to a finish line when you’ve completed a degree; it’s truly a journey of
lifelong learning that’s going to make you more employable and more marketable.
We’re very excited about the promise of predictable performance based on data analytics
in this area as well. That’s the assessment that ManpowerGroup has been working on—predicting performance based on somebody’s ability to acquire new knowledge and their innate curiosity as they move forward in their career. That’s what’s going to drive their future
career prospects.
McKinsey: How do educational institutions need to adapt to ensure their graduates can
participate meaningfully in the economy?
Jonas Prising: Our general approach to training and workforce development in the US is when
I need the person and talent, I will go into the market and I will find them. What organizations
are seeing now is that they’re not able to just find people because the talent is not there at scale.
And looking ahead it won’t be there at scale.
I think the whole approach to education will shift as we come to understand what kinds of
skills—and what level—are needed for certain roles. In some cases, it’s going to be a four-year
college degree. In other cases, it’s going to be a two-year vocational degree. And in other
cases, it’s going to be a series of stackable certificates that are going to enable individuals to
move forward in their careers in the way that they choose.
Education needs to move to a model that is faster and more specific to an outcome—that is,
developing somebody who is employable. The evolution of education is going to involve shorter
bursts with more tangible outcomes. And maybe also a more iterative process that matches
the evolution of the changes in skills that are occurring in the workforce.
McKinsey: What is the role of business in facilitating the shift in the education model?
Jonas Prising: Currently we have people who come out of schools ready to graduate, but they
may not be ready to work, and that, I think, is why the collaboration between the private sector
and educational institutions has to become much tighter.
On the employer side, they are notoriously poor at predicting future demand for skills. And
if they were poor before, it will be even worse in a rapidly changing environment. Closer
communication between educators and employers is occurring in some parts of the world, but
we clearly have a long way to go in a number of nations, including the US, to make sure that
these connections are stronger than they are today.
Most organizations today understand that having access to skilled talent is what’s going
to make or break their business strategy. That’s true for large organizations, medium-sized
organizations, and smaller organizations. But one of the challenges, of course, is large
organizations have resources to develop training on their own. Smaller organizations don’t—not
to the same degree.
We see many smaller organizations collaborating with educational institutions in a more
focused and intense way. Some of these organizations are going into high schools and talking
about the future of work. They’re engaging young people in earn-and-learn programs—a form
of apprenticeship where they pay young people to come in and learn about their activities—and
then the students go back to school but stay in touch with the organizations so they can enter
the pipeline. I think the advice to employers is to take their workforce strategy as seriously as
they take their business strategy.
Supporting job growth and worker prosperity in a new era of automation
McKinsey: Can you elaborate on the role of technology and data in addressing skill gaps and
aiding in hiring?
Jonas Prising: The acquisition of knowledge is going to be facilitated because, through
technology platforms, access to content will be ubiquitous. The big change will then come in
how we help people acquire that content. Instead of displacing human capital, technology will
augment human capabilities. And ultimately that’s what is so exciting.
I was recently in France where a lot of our business is related to infrastructure construction and
I participated in a training class on using technology. In construction, one of the big issues is
worker safety, which is really hard to teach. Learners either complete a hands-on walk-through
on-site or they read a manual and are given examples of what not to do.
With the advent of technology, we now have virtual-reality training. We can use goggles to
explore a work site, look at certain danger areas, and make choices on what actions to take or
what constitutes danger. And all of this is done in a much more efficient way for our associates
and also in a more effective and engaging way that ultimately results in lower workplace
incidents on construction sites. I think it’s an exciting manifestation of what we mean when we
talk about a skills revolution and how we can leverage technology to bridge the gaps that we all
see in our societies today.
Making decisions based on data is as yet an extremely underdeveloped skill, both on the part
of individuals and organizations as they go about hiring. We think that’s going to be the big next
evolution that drives change in organizations.
I think the advice to employers is to take their workforce strategy as seriously as they take their business strategy.
McKinsey: Ensuring that the economy has a sufficient pool of qualified workers is such a far-reaching
challenge. What gives you confidence that the issue can be addressed adequately?
Jonas Prising: The reason I’m so passionate about workforce development is I can see how
things are moving right now. The workforce is bifurcating between workers who have the skills
they need and those who are at risk of being left behind. We must address this issue. And I’m
fortunate enough to be at an organization where we can bridge the gap between people who
are looking for meaningful and sustainable employment and employers that are looking to find
and have access to skilled talent.
This moment is very similar to the 1860s, with the advent of the steam engine and all the
changes to the economy and work we saw then. When we look back 20 years from now,
we’ll say this is when the shift really happened, when globalization and technology drove
tremendous societal change, altered how companies operated, and changed how we as
individuals thought about what work means to us and how we want to engage. That’s why it’s
so gratifying to be here at this moment in time.