Managing Director & Partner, People Strategy & Reskilling Fellow, BCG Henderson Institute, Singapore
In 2019, the Organisation for Economic Co-operation and Development predicted that within 15 to 20 years, new automation technologies would likely eliminate 14% of the world’s jobs and radically transform 32% of them. Those sobering numbers, involving more than 1 billion people globally, didn’t even account for the sudden ascent of generative AI.
Advances in technologies are rapidly changing the demand for skills. Increasingly, technology is handling repetitive and manual tasks and even sophisticated knowledge-based work—such as research, coding, and writing—long considered safe from disruption. But the average half-life of skills is now less than five years—and half that in some tech fields. Many knowledge workers will discover that AI and other new technologies have altered what they do. They will effectively be working in completely new fields.
To cope with these disruptions, many organizations are investing heavily in upskilling their workforces, devoting as much as 1.5% of revenue to learning and development. But more and more, these programs will have to both upskill employees and reskill them for new roles and responsibilities.
The need for a reskilling revolution is apparent. What must companies do to make it happen? In collaboration with Harvard University’s Digital Reskilling Lab, we interviewed leaders at almost 40 organizations around the world that are investing in large-scale reskilling programs. We observed five success factors that companies must address to thrive in the rapidly evolving era of automation and AI.
During times of disruption, when many jobs are threatened, companies have often turned to reskilling to soften the blow of layoffs, act in accordance with social responsibility commitments, and create a positive PR narrative. But most of the leaders we spoke with have moved beyond that narrow approach and now recognize reskilling as a strategic imperative. That shift reflects profound changes in the labor market, which is increasingly constrained by the aging of the working population, the emergence of new occupations, and a growing need for employees to develop company-specific skills.
Infosys, for example, has reskilled more than 2,000 cybersecurity experts to acquire adjacent competencies. Vodafone aims to draw from internal talent to fill 40% of its software developer needs. And Amazon, through its Machine Learning University, has enabled thousands of employees inexperienced in machine learning to become experts in the field.
Traditionally, reskilling has been considered part of the overall corporate-learning function siloed within HR. Investments in reskilling need a profound commitment from HR leaders, of course, but unless the rest of the organization understands the strategic relevance of those investments, it’s very hard to generate the effort that reskilling initiatives require to succeed.
At most of our interviewees’ organizations, reskilling initiatives are visibly championed by senior leaders, often CEOs and chief operating officers. They work hard to articulate for the rest of the company the connection between reskilling and strategy and to ensure that leadership and management teams understand their shared responsibility in implementing these programs.
Ericsson, for example has developed a multiyear strategy devoted to upskilling and reskilling telecommunications experts to become AI and data science experts. Senior leaders review key results of the program quarterly. In just three years, Ericsson has upskilled more than 15,000 employees in AI and automation.
To design and implement ambitious reskilling programs, companies must do more than just train employees. They must develop a winning organizational ethos by creating the right mindset and behaviors among employees and managers. In other words, reskilling is a complex change management initiative that requires a simultaneous focus on many different tasks: understanding supply and demand, recruiting and evaluating employees, training middle managers, learning skills on the job, and matching reskilled employees with new jobs.
Many of the leaders we spoke with mentioned that one of their biggest challenges is persuading employees to reskill. But workers may be more willing to engage in reskilling than executives think. Two-thirds of workers are aware of the coming disruption in their fields and are willing to reskill to remain competitively employed. Our interviews suggest that companies that treat their workers respectfully and lay out the benefits of reskilling initiatives will have an easier time. As one of our interviewees explained, “The secret to scaling up reskilling programs is to design a product your employees actually like.”
Companies have tended to think of reskilling as a challenge they must overcome by themselves. But many of the companies we looked at recognize that reskilling requires partners. Governments can incentivize reskilling investments; industries can team up with universities to develop new skill-building techniques; and NGOs can connect corporate talent needs with disadvantaged and marginalized populations. Coalitions of companies may be more effective at meeting the reskilling challenge than individual organizations on their own.
Many companies understand the need to embrace reskilling, but they have been hampered by a lack of rigor in measuring and evaluating what actually works and by a lack of understanding about how to scale reskilling programs. In today’s rapidly changing environment, companies will have to develop new ways to learn that are systematic, rigorous, experimental, and durable. Only then will the reskilling revolution really take off.
Read more on this topic in Harvard Business Review.
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