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.

The post Cultivating the skills Australia needs to become future-ready appeared first on HRM online.

In an era of rapid technological advancement, with the demand for certain skills rising and others becoming obsolete, preparing for the future of work requires foresight and adaptability. 

In this episode, Ravin Jesuthasan, global thought leader and Senior Partner and Global Leader for Transformation Services at Mercer, talks about how HR practitioners can navigate the evolving skills landscape and prepare their organisations and employees for these changes. 

You’ll learn how to take advantage of the shift towards skills-based hiring, how artificial intelligence might reinvent the graduate-level position, and discover models and frameworks to think about skills and job design as a small, medium or large-sized business.

Skip to the section that interests you most:

• 3:40 minutes: Three things HR can do to prepare for the evolving skills landscape
• 6:09 minutes: How to effectively map skills
• 12:51 minutes: The most crucial skills for businesses to focus on
• 16:03 minutes: How AI might change (or remove) graduate level positions
• 22:24 minutes: How to get started as a skills-based organisation
• 29:24 minutes: How to apply these skills as a small to medium-sized business
• 40:44 minutes: Jesuthasan responds to a scenario about a company that is moving towards a skills-based approach and has created agile teams working on project-based assignments.

View the podcast transcript here.

Extra resources:

For more conversations to inspire HR, listen to season one of Let’s Take This Offline here.

If you’d like further information and resources to help put Jesuthasan’s insights into action, check out the links below:

Learning opportunities

• Sign up to AHRI’s National Convention and Exhibition⁠ in Melbourne on 20-22 August to hear more from Ravin Jesuthasan.

• Sign up for AHRI’s new short course, GenAI Integration Essentials.

Further reading

• Learn more about Jesuthasan’s books.

• Read HRM’s article where Jesuthasan talks about the future of leadership skills.

Member-exclusive content

• Join the AHRI LinkedIn Lounge to connect with your peers and for access to a bonus episode later this week.

Subscribe so you never miss an episode. You can follow the podcast on Spotify, Soundcloud or Apple Podcasts. AHRI members receive exclusive bonus content via the LinkedIn AHRI Lounge.

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Australia’s ongoing skills gaps are hampering productivity for over half of employers (57 per cent), according to a recent report from AHRI.

The report, based on insights from 607 senior business decision-makers across a range of sectors, also found that almost one in five workers (19 per cent) are considered “not proficient” in their role by their employer, a statistic which is consistent with AHRI’s most recent Quarterly Work Outlook report. 

This problem is more significant in the public sector, where 24 per cent of employees aren’t fully proficient, compared to 18 per cent in the private sector.

With the integration of AI and other complex technologies moving at a rapid pace, it’s unsurprising that employers are lacking essential capabilities within their workforces. 

Skills and qualifications that previously sustained a career spanning 40 years or more now demand continuous updates and to remain relevant, posing significant challenges for learning and development teams to keep up with the speed of change. According to the World Economic Forum, the half-life of a skill is currently about five years. 

With that said, AHRI’s findings demonstrate that employers are not resting on their laurels. More than three quarters (77 per cent) are taking active steps to strengthen their talent pipelines. 

Below, HRM unpacks AHRI’s key findings on the driving forces behind Australia’s capability gaps, and how employers are responding.

Common causes of skills gaps

Employers identified a range of driving forces behind current skills gaps, mostly related to the rapid evolution of skill and business needs.

Figure 1 shows that evolving business or strategic needs are cited by 44 per cent of employers, while 42 per cent point to the constantly evolving skills landscape as a significant factor.

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Will there be a recession in Australia this year, or won’t there? It’s a question that has been bouncing around boardrooms, break rooms and newsrooms for months, with little in the way of a definitive answer.

Whether a full-blown recession is on the horizon or not, the pressure is on for business leaders to trim remaining fat from their expenses. Rising interest rates are already driving some global organisations to extreme measures.

In early January, Salesforce said it would be cutting about 10 per cent of its workforce, or 8000 employees. Shortly afterwards, Amazon announced more than 18,000 job cuts, the biggest workforce reduction in its history. Many other companies have followed in their footsteps – especially in the technology sector.

These mass cuts by companies that prospered during the pandemic might raise a red flag not only for employers considering their growth prospects this year, but also for a workforce that is fatigued by crisis and in desperate need of job security.

With the added pressure of retaining staff amid skills shortages, HR professionals are once again being asked to do more with less.

Angela Knox, Associate Professor of Work and Organisation at the University of Sydney Business School, says striking the balance between cost optimisation and preservation of the employee experience will require a human-centric approach.

“Although we are facing economic challenges, it is important to remember how reliant we are on our staff, and how critical they were on the front lines dealing with COVID-19,” she says. 

“It will be especially important to manage the psychological contracts that employees have with their organisations to ensure that their attitudes and behaviours remain positive. If we breach psychological contracts, employees will disengage, negatively impacting performance and productivity and potentially increasing absenteeism and turnover costs. 

“To avoid this, it will be really important for leaders to remain fair, transparent and honest when dealing with their workforce.”

“How can we call ourselves human resources if, when push comes to shove and business pressure gets applied, we turn people back into elements in a spreadsheet?” – Marcus Buckingham, Head of People and Performance Research, ADP Research Institute

Strategic business cuts and investing in HR

While organisations look for places to bring down their expenses in the short term, Knox stresses that leaders must not repeat the poor decisions that resulted in the skills shortage.

“Our domestic workforce hasn’t been provided with the kinds of firm-based learning and development opportunities that existed in decades gone by,” she says.

“Many organisations only became fully aware of this skills shortage once our borders closed [during COVID]. As our borders closed and temporary immigrant workers left Australia, the lack of skills in our domestic workforce became impossible to ignore,” says Knox.

If employers neglect investing in learning and development in difficult times, they could end up “jumping out of the frying pan and into the fire” in the future if crucial skills have not been developed in the internal labour market.

On top of this, periods of economic difficulty highlight just how reliant businesses are on the HR department; HR is critical both in preparation for tough times and in recovery efforts. A strong case for investing in HR during unstable times was made by a 2021 report from ADP Research Institute, which demonstrated a positive correlation between interactions with HR and employee engagement. 

The first-of-its-kind study, based on surveys of 32,000 employees globally, found that a single touchpoint with HR made employees twice as likely to value their company and five times as likely to recommend it as a place to work than those with no direct HR contact. 

It also found that if an employee finds their company’s HR services valuable, they are 3.7 times more likely to stay with their employer. 

According to Marcus Buckingham, Head of People and Performance Research at ADP Research Institute, the most crucial area where HR adds value during a recession is in preservation of the employer brand.

“We felt that the simplest way to measure the effectiveness of the HR function was whether or not it was value-promoting to your talent brand, or value-detracting from your talent brand,” he says.

“We’re going to have companies fighting for fewer and fewer people, and that’s not going to change for a long time. And so if you’re [making cuts], the manner in which you do that will affect your talent brand one way or another.

“It will all come down to whether or not you can attract the best talent after this initial dip. Because we will come bouncing back and we’re going to need people.”

Despite the fact that the economy will eventually bounce back, short-term cost-cutting initiatives will be inevitable for some organisations. HR plays a crucial role in ensuring the strategy is considerate of both the business and employees’ best interests, and clearly communicated to them as such.

Without the support of the broader workforces, cost-optimisation strategies are prone to backfiring if employees feel their job security and satisfaction are compromised.

A recent report by Gartner, based on a survey of over 10,000 employees globally, found that 49 per cent of people weren’t sure if cost-optimisation efforts actually worked, and employees were more likely to leave an organisation that engaged in cost-cutting.

The research also showed both managers and employees agree that employee resistance is the biggest barrier to cost-reduction efforts.

Gartner’s Director of HR Advisory, Neal Woolrich, suggests a strategy called ‘open-source change’ to ensure cost-optimisation efforts do not have an adverse impact on engagement and retention.

“As the name suggests, open-source change is all about involving employees in the change process as early as you can, and as openly and as transparently as you can,” he says.

He suggests putting the employees who will be most impacted by the changes in an active role when it comes to executing the change management process, especially when it comes to re-establishing their goals and how they align with business objectives. 

Open-source change also includes being transparent about the decision-making process when it comes to more severe cuts.

“If there is that difficult decision to be made around reducing headcount, make it clear that everyone is subject to the same criteria,” he says.  “That is, how important is the role to the future strategy of the business? And how well have people performed in the past?

“Then overall, as an organisation, think about what you can do to make each employee feel more valuable in the role they’re doing as they go forward.”

In order to minimise the cultural and reputational risks of conducting layoffs, says Woolrich, there are a number of measures employers could take to let employees go in the most ethical way possible.

“We need to think about how we can support them through the last weeks and months of their job. The focus should be on what we can do as an organisation to add to the value of this employee in the labour market. Can we give them some short-term projects in the lead up to them being made redundant? Can we help them find their next job? Can we leverage partners in our supply chain, or other organisations we have strategic partnerships with, to find them jobs? Those are some ways to conduct layoffs ethically.”

To protect your talent brand long-term after laying staff off, Buckingham suggests creating an alumni network similar to those offered by schools and universities. 

“We feel connected to places that helped us grow,” he says.

“The best companies realise that when somebody leaves their employer, they don’t vanish, they don’t cease being human. And by creating [an alumni association], HR can say, ‘Look, we’ve had an economic downturn, we over-hired, and we’re going to have to cut back on our costs to make sure that our stock maintains its level. But we know you, and we do care about you. And even if we can’t have you right now, we want you back someday.’”

Learn strategies for success during economically challenging times by signing up for AHRI’s webinar.
Leading HR through challenging times on 26 April at 12pm.

Lessons from the past

According to Knox, leaders must look to the challenges of the past to inform their approach to the latest wave of financial instability. 

“For the last couple of decades, a lot of organisations have shifted strongly toward a shareholder-based model,” she says. 

“That’s a very short-term approach, because you might be maximising shareholder benefits, but long-term, you’re not necessarily optimising outcomes or creating the policies and practices that will harness the best capability of your workforce.”

Instead, Knox suggests taking an ‘ecosystem-based’ approach that aims to benefit employees, customers and other stakeholders more broadly, rather than making decisions based purely on what’s best for shareholders. Over the longer term, what’s good for stakeholders is also good for shareholders.

“The organisations that endured COVID and the global financial crisis well were those that worked with their employees to understand their preferences, and explored the options that would allow the organisation to reduce costs and headcount while also meeting the needs of their workforce. In these situations, it’s our frontline employees who are in the best possible position to provide insights about where it’s possible to create efficiencies.”

By consulting with employees about their preferences before initiating a cost-cutting strategy, leaders might escape the need for layoffs, says Knox. There may be inefficient policies, practices or work systems that can be designed more effectively, for example. 

Other options to consider include working with staff to develop more efficient arrangements that better suit their needs and preferences, including voluntary redundancies, job-sharing, early or phased retirement or a period of unpaid leave.

“The organisations that endured COVID and the global financial crisis well were those that worked with their employees to understand their preferences.” – Angela Knox, Associate Professor of Work and Organisation, University of Sydney Business School

A moral commitment

Buckingham says investing in HR means taking a step back and reevaluating the way it incorporates technology into its services. The aim of these conversations should be to ensure that HR can use tech to maximise efficiency without jeopardising the psychological contracts between employers and their people.

“We’ve tried to get tech to do a whole bunch of stuff that only humans can do. And the best HR functions will very, very soon realise the distinction,” he says.

“We’ve dehumanised HR over the last 15 years in service of efficiency, because we thought of ourselves as a cost. But you can’t dehumanise HR without destroying its value.”

Buckingham says the two key functions technology should bring to HR’s table are accuracy and availability. The right software can provide an instant and reliable source of knowledge and an efficient way for employees to check and update their details. However, he says, where some HR departments tend to fall down is by using technology as a replacement for genuine human connection.

“Often, when [employees] have any sort of interaction with HR, they are emotionally vulnerable. For example, maybe your mum got sick and you called up HR to get family leave. But if, for whatever reason, your company outsourced that to a call centre or a chatbot, the first question that would be asked is, ‘What’s your employee number?’ This is a human. They don’t need a bot [or a stranger]; they need to talk to a person who knows their name. And that person could hand them off to specialists.

“I’m not saying we should go back to the generalist days of 30 years ago, but if I’m a person who has an HR issue, I need a person who knows me [to help].” 

Based on ADP Research Institute’s findings, Buckingham suggests that leaders look at every interaction between employees and HR as a potential value-creator, rather than a transaction that should be removed or streamlined.

“It starts with the moral commitment,” he says. “How can we call ourselves human resources if, when push comes to shove and business pressure gets applied, we turn people back into elements in a spreadsheet?”

Knox, Woolrich and Buckingham agree that, faced with the challenge of balancing short-term cuts with long-term resilience, leaders must implement cost-cutting measures with empathy at their core. By refocusing HR on its key objective – to act in the service of the individual – leaders can ensure that HR does justice to the ‘human’ in its name. 

A longer version of this article was first published in the April 2023 edition of HRM Magazine.

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The answer is by upskilling and reskilling. 

“We’ve started some reskilling programs in areas where we have high demand, such as data and analytics, risk and business banking. So far, we’ve had 200 of our employees go through that program and 100 of them got jobs in the area they reskilled for,” says Sian Lewis, Group Executive Human Resources at Commonwealth Bank of Australia.

With over 850 million members, LinkedIn has an unparalleled insight into this market.

In 2021 alone, 286 million skills were added to LinkedIn Learning profiles globally. Plus, nearly half of recruiters are using skills data to fill roles, a practice that is increasing year-on-year.

LinkedIn’s new Skills Evolution report unpacks how skills have changed since 2015 based on the skills that members are adding to their LinkedIn profiles. LinkedIn has learning courses to help with these skill sets, which you can access for free until 30 September 2022.

Here are the top skills in 2021 and the LinkedIn Learning courses that can help with upskilling and reskilling:

1. Customer Service – Serving Customers in a Continuously Changing World with David Brownlee
2. Time Management – Leadership Tips, Tactics, and Advice with Elizabeth Lotardo & Lisa Earle McLeod
3. Communication –  Unlocking Authentic Communication in a Culturally-Diverse Workplace with Jonathan Wilson
4. Sales – Asking Great Sales Questions with Jeff Bloomfield
5. Business Development – Business Development: Strategic Planning with Meridith Powell
6. Problem Solving – The Secret to Better Decisions: Stop Hoarding Chips with Seth Godin
7. Interpersonal Skills – Be the Manager People Won’t Leave with Laurie Ruettimann
8. Business Strategy –  Business Analysis for Busy Professionals with Christina Charenkova
9. Marketing – Marketing Foundations: The Marketing Funnel with Brad Batesole
10. Leadership – Time Management Fundamentals with Dave Crenshaw

What are the current skills that employers are seeking?

There will always be a demand for hard skills, but soft skills are on the rise due to their transferability across industries. Soft skills include, but are by no means limited to, leadership, problem-solving, communication, critical thinking and time management.

To further understand how skills across different industries are changing, LinkedIn examined specific industries worldwide and the top skills that employees in these industries are prioritising in order to future-proof their careers.

They include:

Marketing

With our ever-shortening attention spans, it is unsurprising that the top three skills the marketing sphere is crying out for are digital marketing, social media marketing and SEO (search engine optimisation).

Project Management

In these times of rapid change, an agile project manager could not be more crucial. Understandably, the top skills sought in project management are centred around pivoting, planning and coordination. This industry has seen a 70 per cent change in its requirements since 2015.

IT

No stranger to change, this industry is very agile. However, even the IT sphere has experienced massive disruption,and like project management, has seen a 70 per cent change in requirements since 2015. There is significant demand for cyber-security knowledge, network and system administration.

Engineering

New technologies dominate when it comes to in-demand skills for  engineers. The top three of these skills are AutoCAD, JavaScript and Java.

Finance and Accounting

This industry recorded the same three top skills as the engineering field. Bank reconciliation, journal entering, and financial planning are also recommended.

As we ride the waves of change, now is an opportune time to upskill and future-proof your career.

Click here to uncover more detail on the top 10 skills across industries globally and access the free LinkedIn Learning courses to get started on your skills journey.

Request a free demo to learn how LinkedIn Learning can keep your team learning and benefit your business.

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