The world is facing a global workforce readiness gap, driven by skyrocketing demand for digital skills, especially AI, according to new SkyHive by Cornerstone research presented by Sean Hinton, founder of SkyHive by Cornerstone, and Mike Bollinger, VP of Strategic Initiatives at Cornerstone, at the annual HR Tech conference.
“The ways we work are changing, and the skills required to perform are moving faster than people and organizations can prepare for it,” said Sean Hinton.
The 2024 Annual State of the Skills Economy report leverages SkyHive’s Knowledge Graph of more than 40TB of data covering more than 200 countries and territories, including job postings, resumes, government data, and other data points in 11 languages. The report which is unique in that it covers a 5 year period (2019-2023), examines the skills employers seek—and the skills workers highlight—around the world. The unique insight demonstrated from the expansive data set were highlighted in Hinton and Bollinger’s session at HR Tech.
The report covered four key areas: the exploding need for digital skills, including GenAI, coupled with the continued need for human skills (or soft skills) and how those are differentiated by generation.
The research found that demand for Generative AI skills has exploded, rising 411 percent since 2019, with most of the growth coming after the introduction of ChatGPT-4 in 2023. Demand for other digital skills in job postings has also grown, with data analytics increasing by 52 percent, machine learning by 65 percent, and augmented reality/virtual reality rising 155 percent.
“We need digital skills, particularly GenAI, and fast,” Mike Bollinger said. “But don’t underestimate the need for human skills, or how those human skills need to adapt across different generations.”
Human skills, most notably leadership, communication, and collaboration are vital for innovation, and managing change. In North America, human skills are demanded 2.4 times more than digital skills, and in the European Union human skills predominate 3-to-1.
“True innovation requires both human and digital skills. While technology makes us more efficient, it's the human qualities like leadership, creativity, and ethical judgment that turn any technological potential into real-world success,” Bollinger said.
There’s another factor affecting the supply of human skills: generational change. For the first time in history, there are five distinct generations in the workforce, each bringing different skills and expectations. Baby Boomers and Gen X offer extensive experience and strategic insights but may face difficulty with rapidly evolving digital technologies. Millennials and Gen Z, who have grown up with technology, bring a digital-first mindset (91 percent of Gen Z says the technology offered by employers influences their job choice).
However, these younger generations often struggle with human skills such as networking, conflict resolution, and effective communication. “As Baby Boomers approach retirement, it is crucial for organizations to prioritize mentoring relationships, ensuring that this experience is effectively passed on to younger workers within the evolving workplace models,” Hinton commented.
The impact of the workforce readiness gap is considerable: innovation slows, employees leave, and businesses fall behind. In fact:
- 57 percent of HR leaders say skills shortages undermine corporate performance.
- 63 percent of enterprise leaders don’t believe their workforce is adaptable to change.
- There’s an estimated $8.5 trillion in unrealized revenue due to the inability of businesses to quickly pivot.
Workforce agility, defined as the ability to respond to change and turn those changes into opportunities, is the key to closing the readiness gap, Hinton and Bollinger explained.
“Research has shown that dynamic organizations enjoy increased motivation for learning and growth from their people. They also experience improved communication between employees and managers, driving transparency, accountability to goals, and the ability to prioritize decisions and react quickly," said Bollinger.
Skills are the key to workforce agility, because they are specific, measurable, equitable, and can be developed in a targeted way.
Hinton and Bollinger had specific advice for organizations looking to implement a skills-first approach:
- Don’t make skills a science project. Getting lost in intellectual and technical discussions regarding skills strategies is easy, particularly for HR and IT teams. Don’t get overly focused on these items, and opt instead for more practical questions, such as how to get leaders to champion skill development, or how to get hiring managers to prioritize skills when identifying candidates.
- Learn to crawl before you can run. Start simple. Instead of launching company wide initiatives, it may be more manageable to identify a handful of business-critical skills for a single function, build from there, and then employ the lessons learned.
- Get started! Learn along the way. Waiting for the perfect strategy or answers to every question can lead to missed opportunities. Even the most mature organizations, well on their way in their skills journey, will tell you they are still figuring things out.
- Always start with your business problem. Answer the “why” first. Organizations that are successful with leveraging skills to create business value don’t start with a broad ambition to become ‘skills-based.’ They are laser-focused on how addressing skilling needs can help solve a specific business challenge.
“It’s about progress, not perfection,” said Hinton. “Organizations don’t implement skills for the sake of it; they do it to solve a specific problem. That means continually adjusting your strategy based on results, so you can move closer and closer to a solution for your organization as it faces this major, global problem.”
For more details, read SkyHive by Cornerstone's 2024 Global State of the Skills Economy Report.
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