The Herman Trend Alert

June 27, 2018

The Shifting Future of the Workforce Part 1

By 2030, the demand for technological, social and emotional, and higher cognitive skills will actually rise. Workers must adapt, or their jobs will disappear; organizations have even more to lose. It's no secret that automation and artificial intelligence (AI) are fundamentally changing the nature of work. This Herman Trend Alert focuses on McKinsey's recent research on the impact of technology on the economy, business, and society with insights into the coming shifts in demand for workforce skills and how companies will need to transform as well.

McKinsey's Study Worth Considering

They looked at 25 core workplace skills in five sectors (banking and insurance, energy and mining, healthcare, manufacturing, and retail) today and in the future for the United States and five European countries.

Automation: accelerating the shift in workforce skills 

McKinsey found technological skills will see the strongest growth in demand. Though they represent the smallest category today, we will see a 55 percent increase; in fact, by 2030 technological skills will represent 17 percent of hours worked---up from 11 percent in 2016. This technological tidal wave will push demand for basic digital skills as well as advanced tech skills like programming. The need for social and emotional skills, including leading others, will increase by 24 percent. At the same time, the overall need for higher cognitive skills will continue to grow at a moderate rate, but demand for skills like creativity will rise sharply.

The demand for some more basic skills will decrease 

There will be a declining demand for some, mostly lower complexity skill categories. Lower order cognitive skills, including basic data input and processing, will drop by 15 percent. Demand for physical and manual skills, which include general equipment operation, will also fall, by 14 percent. In spite of this trend, these lower order skills will remain the largest category of workforce skills in 2030 in many countries.

Skill shifts will be different in different sectors

Some examples of these different demands include healthcare having an increasing need for physical skills, while demand for them in manufacturing and other sectors will decline. In the service sectors, we expect to see increasing demand for digital skills, as automation increasingly affects these industries, like the robo-restaurant, Spyce, we covered in our Herman Trend Alert of May 30, 2018 ( "High Tech meets Haute Cuisine").

Stay on top of these shifts to remain gainfully employed

In the developed countries, the worst hit will be low-skilled workers, as we will be using machines for these repetitive tasks. Workers who want to keep their jobs will need to keep up with advancing technology in their fields and remain computer/digital device-literate to ensure that they are valued in the workplace of tomorrow. Nurture your networks, even when you don't need them. Make it a point to watch what's going on in your own industry as well as related ones. Your efforts will be rewarded when there is the inevitable reduction in force (RIF) due to the reorganization that will take place.

Next week, we will feature the shifts that organizations must make to accommodate the changing landscape of work. To read the entire McKinsey study, visit here.

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