The world is fretting about the looming “skills gap” and its potential impact on economic output. Again. “The [UK] government, of course, is well aware of this threat,” wrote the Financial Times — in 1968.
This is a chronic problem, in other words. But it is entering an acute phase, thanks to the pandemic. Like coronavirus, the skills gap is mutating, in potentially dangerous ways.
The first and most obvious fissure in the future of work is still the one identified in that 1968 report: a dearth of workers (engineers, in that case) with the skills for the jobs of the future. Today’s problem is summed up by a new report from the World Economic Forum: 40 per cent of the core skills in the average job will change in the next five years, it concludes.
Beneath this chasm lurks a second skills gap, between lower-educated, lower-paid, and younger workers, who are disproportionately worse hit by the crisis, and better-paid, older professionals. Outcomes for women are also worse than for men. US data show peak unemployment hit 21.2 per cent in April for workers educated to lower than secondary level, falling only to 12.6 per cent by end of August. In each case that was more than double the rate for workers with at least a degree.
What looks like good news for the more highly educated, though, may only be relative. The UK government’s Industrial Strategy Council last year estimated an additional 7m people, or 20 per cent of the workforce, would be under-skilled for their jobs by 2030, but another 1m would be over-skilled.
The pandemic will potentially widen this third gap. I click-and-collected my groceries the other week from a man who had lost his job managing shop refits for a retailer. He was philosophical about the turn in his fortunes. “It’s the first time for a while I’ve had no responsibility,” he told me. Similarly, Tom De Silva, who hoped to go into advertising before Covid-19 hit, earned viral fame with a recent mordant tweet about his part-time supermarket job: “4 years ago I was doing trollies at Sainsburys on a Monday night. I left, worked hard and got a degree from the University of Sheffield. Now I’m doing trollies at Waitrose on a Friday night. Never give up”.
Through no fault of their own, people who have to downshift in this way worsen the qualifications gap, and take roles that might otherwise have been open to a less educated candidate wanting to get a foot on the jobs ladder.
Conventional wisdom suggests digital skills are the hole in the future jobs market. True, data analysts and specialists in artificial intelligence, big data, and digital marketing top the list of jobs in increasing demand, according to the WEF report. (Its jaunty video about the challenge ahead even offers hope for Mr De Silva, illustrating the need for “customer success specialists” with an animation of supermarket trolleys.) But the top skills required for 2025 are broader — such as analytical thinking, complex problem-solving, and creativity — and expose a fourth potential rift in the jobs market.
Top five skills for 2025
Analytical thinking and innovation
Active learning and learning strategies
Critical thinking and analysis
Creativity, originality and initiative
source: Future of Jobs Survey, 2020, World Economic Forum
“There’s going to be a point where all the technology has been built and you no longer need a gazillion software programmers and data scientists,” says Julian Lambertin of KRC Research, who has worked with Microsoft on recent reports about the future of work. Instead, “you will need people who work with the technology” and apply their human, personal and leadership skills.
Companies, governments and educational institutions need to act fast and in a co-ordinated fashion to plug these holes. More than half of working adults fear they will lose their jobs in the next 12 months, according to an Ipsos survey for the WEF.
More optimistically, two-thirds think they can retrain with their current employer. To fulfil such hopes, companies have to meet their side of the bargain and commit resources to valuable on-the-job training even as they are under fierce financial pressure. Saadia Zahidi, co-author of the WEF report, points out that the return on investment in reskilling is fast, “so you would think that the business case is there”. But “businesses are having to take short-term decisions because of the downturn”.
Here, a final skills gap looms — one of the hardest to close. The “things that are easiest to teach and test have also become the easiest to digitise”, Andreas Schleicher of the OECD warned the WEF’s Jobs Reset summit last week.
Yet companies need staff with core social and emotional capabilities — misnamed “soft” skills — that can best be acquired, cultivated and assessed at work. Once out of a job, candidates may find it harder to prove to employers their “active learning” capacity, second on the WEF’s list of top skills for 2025. If they cannot bridge this gap, policymakers, business leaders and educators will still be wringing their hands about the skills shortfall decades from now.
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