Technology has the potential to create considerable disruption to employment across a range of industries. A new report considers the current trend, as well as the kinds of skills that employers cannot automate. Many of those skills themselves remain difficult to find, pointing out that considerable social transformations may be on the horizon, with people strategies likely to adapt to the new normal.
In PwC’s latest edition of its 'Global CEO Survey', the 20th edition, the firm considers a range of factors affecting businesses across the globe. One key area of concern, from both the public as well as industry more widely, is the effect of automation on employment. A slew of recent studies have highlighted that robots, in a variety of forms, can already largely replace part, or all, of the jobs performed by humans across a range of industries – a McKinsey & Company report finding that if today's technologies are fully implemented, it would mean that 1.1 billion in FTE positions would be wiped out.
While the optimistic assumption remains that new jobs would be created, providing ample opportunities for those out of luck, key concerns remain – the industrial revolution resulted in wide spread income inequality as the new positions took a generation to materialise – as it is by no means certain that new positions will arise, nor that those new positions will be accessible to all or provide a living wage.
Robots rise up
According to the study, technology has been somewhat less impactful on business than projected by companies in the first study run by the firm. While the question then focused on e-commerce, the number of respondents that said it would completely change their industry has been relatively in line with expectations, at 20% in 1998 and 27% in 2017. Respondents in 1998 were much more likely to say that technology has had a significant impact, then at 59%, compared to new, at 33%. Today, around 30% say that technology has had a moderate impact, compared to 20% that predicted this in 1998.
One area that has seen considerable effects from automation is heavy industry, with the number of robots installed at plants increasing from 700,000 to more than 1.8 million today, which could soar to 2.6 million by 2019. Globalisation and automation have created a perfect storm for manufacturing employment in developed countries, with considerable number of employees – total sector employment falling from 25% of the US population in the 70s to 10% today – losing their manufacturing job.
A recent study of employees finds that that vast majority (79%) are concerned about the future of their role in the face of advancing technology. Experts point out that between 9% and 57% of jobs are likely to be automated within the next 50 to 100 years – just based on technology available today. PwC notes that “technology will have a disruptive impact on the workforce, and it will do so right across the skills spectrum.”
The effects of automation are likely to be gradual however, partly as a result of attrition and partly as a result of new technologies becoming cost effective due to scale effects. As it stands, the report notes that 16% plan to cut their company’s headcount over the next 12 months – and around 25% of those are doing so due to technology. There are considerable differences though, cautions CEOs are much more likely to cut headcount (46%) compared to confident CEOs (11%).
What is in demand
The report notes that companies are in general (52%) looking to increase their headcount in the coming months. Companies are, in particular, looking to fill positions with people capable of delivering a range of skills that robots currently lack. These skills tend to be difficult to recruit – pointing out a key concern for the future employability of those without at least merit on their master’s degree in a supply side excess meritocracy.
The most in demand skill is problem solving, which 61% of respondents cites as difficult or very difficult to recruit, this is followed by adaptability, also cited as at least difficult by 61% of respondents.
Leadership is harder to find still, and takes the number four spot as a skill in demand by companies surveyed. Creativity and innovation remains the most difficult skill to access, while taking the number four spot in terms of importance to employers. Emotional intelligence takes the number five spot, with 64% saying it is hard to attract.
To acquire the skills companies need to meet their recruitment needs, the study finds that companies are expanding their net. Many companies strongly agree (28%) or agree (50%) that they have change their people strategy to reflect the skills and employment structure we need for the future, with many also at least agreeing (77%) that they move talent to where it is needed. Companies are also increasingly focused on training their employees with digital leaning programmes (65% at least agree).
Around 60% of respondents say that they are rethinking their HR function in light of changing conditions, while 52% are exploring the benefits of having machines and humans work together. The areas of least concern – at this stage – relates to companies considering the impact of artificial intelligence on future skill needs, with around 40% looking into it. Few companies are increasingly relying on contractors, freelancers and outsourcing, with around 46% of respondents disagreeing that they are.