In a world of work where change is the only constant, how can employers ensure they are developing the right skills to future-proof their workforces?

Fifty-four years ago, best-selling American futurist Alvin Toffler wrote: “The illiterate of the twenty-first century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.”

Today, his prediction seems remarkably prophetic. The skills landscape employers are facing in Australia and globally is dynamic, unpredictable and rife with opportunity.

According to the World Economic Forum (WEF), the average half-life of a skill is currently about five years. Skills that would have carried previous generations through a career of 40 years now require endless updates and expansions to keep pace with technological advancement. 

As a result, the importance of technical skills has been eclipsed by the importance of skills adaptability, says Ravin Jesuthasan, author, Senior Partner and Global Leader for Transformation Services at Mercer.

“The only thing that will keep us relevant is the ability to keep reinventing ourselves,” he says. 

“The skills where the premium is going to go up exponentially will be things like learning agility, curiosity, the willingness to look around corners and anticipate, the ability to see connections across two or more disparate domains – those are the skills that are really going to stand us in good stead.”

Building skills security

While much has been made of the potential negative impact of new technologies on job security, the WEF’s Future of Jobs Report 2023 found the majority of technologies being implemented across organisations are anticipated to create more jobs than they will displace over the next three years.

Artificial intelligence, arguably the defining aspect of the Fourth Industrial Revolution, is expected to generate a net increase in jobs of 26 per cent by 2027. Meanwhile, big data analytics is set to create a net 58 per cent increase.

The only technologies forecast in the WEF’s data to have a net negative overall impact on employment data were robots; both humanoid (designed to mimic human behaviour) and non-humanoid (machines devised for specific tasks, such as drones and industrial automation).

In light of this, future-proofing the workforce will mean focusing less on job security and more on skills security.

“It’s much easier and more important to understand how work is changing, rather than looking at what new jobs are being created,” says Jesuthasan, who will be a keynote speaker at AHRI’s National Convention and Exhibition⁠ in August. 

“A job is a blunt instrument. It contains so many different things. But if you can understand how the work is changing, that gives you a precise view into the types of skills that are going to be in demand because it’s much easier to map skills to tasks than to understand the myriad of different skills that might underpin a job.”

“The only thing that will keep us relevant is the ability to keep reinventing ourselves.” – Ravin Jesuthasan, Author, Senior Partner and Global Leader for Transformation Services at Mercer

Shifting towards skills-based hiring and mobility

When organisations are facing skills challenges, employers often assume that targeting candidates with qualifications from familiar institutions will be their safest bet, says Jesuthasan.

“In my industry, there’s an old adage, ‘No one ever got fired for hiring McKinsey,’” he says. “If you think about how talent is resourced today, it’s largely based on credentials and what you’ve done previously. Those two things reduce the risk to an employer that a person can’t do the job. 

“But if we move to a skills-based approach, it takes us from competing for the five per cent of people we might have traditionally looked at to looking at the 20, 30, 40 per cent of the population who could actually do the work.”

Rather than adhering to rigid roles, a skills-based approach breaks down the individual capabilities required to perform a given task and assigns them to employees with the appropriate skills and capacity, regardless of whether it’s part of their job description.

With skills shortages increasing in severity and complexity, this approach is likely to grow in popularity over the coming decade. We’re already seeing companies becoming more flexible in the qualifications they consider, says Jesuthasan. For example, in 2021, IBM announced it had stripped bachelor’s degree requirements for more than half of its US openings. At Google, job postings requiring a bachelor’s degree fell from 93 to 77 per cent between 2017-2021. 

At banking and financial services company ANZ, the benefits of a shift towards skills-focused hiring and mobility are already beginning to shine through. 

“I think that job roles will persist as a means to organise work, but now we’re getting a deeper skills-based view of what’s behind each role,” says Arun Pradhan, General Manager of Learning at ANZ, who will also be speaking at AHRI’s Convention.

“We’re developing the frameworks and investigating the technology that will allow us to look at a role and see that it’s 40 per cent adjacent to that role over there, even though it doesn’t look like it. And we’re trying to provide a faster way for people to match up those skills.”

Ravin Jesuthasen and Arun Pradhan will both be sharing their insights on future-ready HR practice at AHRI’s National Convention and Exhibition in August. Don’t miss the chance to hear from inspiring thought leaders and master practical strategies for now and the future. Secure your spot today.

Planning for the skills needs of the future

During the past decade, we have witnessed immense shifts in our ways of working, from mass digitisation to the proliferation of hybrid working. With the pace of change accelerating, it’s safe to assume future decades will bring even more transformative developments. 

For many employers, this begs the question: If we don’t know what tomorrow will look like, how can we equip our people to succeed when it arrives?

According to Adina Leu FCPHR, Director of Workforce Strategy and Planning at the Australian Public Service Commission (APS), the difficulty of answering this question deters many employers from investing enough strategic thinking into their skills development. 

“Across the economy, there is little incentive for employers and managers to look at longer-term skills planning and invest in their current workforce to build the skills they’ll need, or that the sector or Australia will need, in five to 10 years’ time. Because of the high levels of turnover, they think, ‘Why should I? They’re not going to be here anyway.’”

As a result, future-focused employers must find ways to convince leaders to plant trees under whose shade they might never sit.

“It’s about moving away from [the mindset of], ‘I’m going to look after my own interests,’ and towards being part of a bigger ecosystem – whether it’s at an industry level or in the Australian economy,” says Leu.

As a government organisation with a workforce of over 170,000, the APS recognises the strategic imperative of mapping future skills needs by conducting in-depth scenario planning based on a variety of potential workforce futures.

“Of course, there’s a need to prioritise, because you’ll be generating 10s of scenarios, but you can’t plan for all of them,” says Leu.

In order to identify and plan for the most likely outcomes, the APS refers to the ‘megatrends’ published by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the long-term insights briefs developed by the Department of the Prime Minister and Cabinet.  

From digitisation to the global push to reach net zero, these trends are predicted to be the main drivers of evolving labour markets and skills demand over the coming decades.

“We are building out the workforce implications of some of those scenarios,” says Leu. “For example, we’re looking at the green transition, and the skill sets we’ll need in government to progress that transition and the green economy agenda for the country and globally.”

The APS is also actively engaging with educational institutions and early career programs to address skills shortages from the ground up. 

Exposing young people to career pathways available to them is particularly important to ensure skills pipelines are as diverse as possible, says Leu. “For example, we know there are shortages in some occupations and roles which are highly male-dominated – [things like] construction, engineering, cybersecurity and so on,” she says. 

“We also know that the seed for some of those career decisions is planted with kids as early as five. So, we need to have more interventions to get girls passionate about occupations like these ones in early childhood.”

“Learning is most effective at the point of need. The opportunity to immediately and constantly apply learning provides a reality check, learning reinforcement and a feedback loop.” – Arun Pradhan, General Manager of Learning, ANZ

An upskilling strategy fit for the future of work

One challenge that often arises with big-picture upskilling and reskilling strategies is push-back from employees asked to take part in them. 

In recent years, the speed of transformation has left some employees experiencing varying levels of ‘change fatigue’. According to Gartner, employees’ willingness to embrace change has dipped sharply, from 74 per cent in 2016 to 38 per cent in 2022.

To avoid employees feeling overwhelmed by the magnitude of upskilling and reskilling required, getting the timing right is crucial, says Pradhan.

“Strategic workforce planning can mean developing three-year modeling, but we need to consider an overlay of how early we can initiate upskilling before those skills become relevant,” he says. 

“Learning is most effective at the point of need. The opportunity to immediately and constantly apply learning provides a reality check, learning reinforcement and a feedback loop to accelerate learning.”

To provide this opportunity, ANZ will be rolling out a new Academy for foundational skills around data, digital and human skills.

“The ANZ Academy has team-based learning at its core, so people can apply what they learn immediately in their work with their peers,” he says. “It’s getting away from having a learning bubble over here and a work bubble over there, which forces busy people to make their own connections.

“Instead, we’re using blended experiences, team activities and contextualised stories to reduce the friction of on-the-job learning.”

In order for HR to formulate and deliver upskilling and reskilling strategies effectively, it’s imperative that they lead by example. 

“Use every opportunity to build a new skill,” says Pradhan. “Be that curious person who collects skills from work, parenting, hobbies or anywhere else, and is creatively combining those skills to deliver your unique value proposition and greater adaptability.”

A longer version of this article first appeared in the June/July 2024 edition of HRM magazine. Sign up to become an AHRI member to receive a bi-monthly copy.

Hear more from Ravin Jesuthasan on the shift towards skills-based hiring in the latest episode of AHRI’s podcast, Let’s Take This Offline. Listen to the episode below.