What Does The Future Hold For Jobs, Skills And Pay?

What Does The Future Hold For Jobs, Skills And Pay?

 

Rapid technological advancements in this era have greatly increased productivity and improved our lives, but along with these positive elements of growth comes a slew of challenges in terms of the job security and income levels. According to McKinsey Global Institute’s latest report, “Jobs lost, jobs gained: Workforce transitions in a time of automation”, between 0% to 30% of the hours worked globally could be automated by 2030, depending on the speed of adoption. Tasks most susceptible to automation include operating machinery and preparing fast food, as well as tasks that involve data processing and collection, which will affect mortgage origination, paralegal, accounting and back-office transaction processing work. This does not mean, however, that jobs could be lost to automation, but rather workers may move on to take new roles and tasks.

 

Will there be enough jobs to go around in the future?

This would probably be the top question everyone has on their minds. And although it is a valid concern, history has shown that labour markets are surprising agile when it comes to weathering shifts in employment and sectors, and will naturally adapt to the changing level of demand for workers as a result of disruption. Also, it is expected that 8% to 9% of labour demand in 2030 will be for new occupations that have never existed. We can surmise from this knowledge that as long as there is sustained economic growth, innovation and investment across the globe, the impact of automation can be offset by the number of new jobs created. The bigger issue to solve would be to ensure that workers have the skills and support needed to transition to new roles – a failure to do so may well result in high unemployment rates and low wages.

 

How will the rise of automation affect skills and wages?

The shift to automation will inevitably mean that in the future, workers will take on roles and tasks that require the “human element” such as managing people, applying expertise and communicating with others. As such, we can expect that roles in the health and education sector such as nursing and teaching will be very much in demand and consequently, wages for these roles will rise accordingly. There will be little to no need for workers to carry out dangerous or exhausting physical activities in the line of their work, or focus on menial or repetitive work such as collecting and processing data. These are tasks that can be automated and the results produced would be far more accurate and precise than that produced by a human being. There will also be stronger emphasis on social and emotional skills and more advanced cognitive capabilities such as logical reasoning and creativity. And as with the basic economics of labour supply and demand, wages for roles that are no longer in demand will fall, while those that are will rise.

 

How do we manage the upcoming workforce transitions?

In a world where artificial intelligence and automation is widespread, it makes sense for workers of the future to acquire new skills that befit the nature and challenges of work in the Fourth Industrial Revolution and beyond. There is also a need to rethink the talents and capabilities you bring to the workplace and how you can remain relevant in the long term. According to the Report by McKinsey, there are four key areas that will need to be addressed:

  • Maintaining robust economic growth to support job creation – putting in place fiscal and monetary policies that ensure sufficient aggregate demand, encouraging business investments and supporting innovation across industries.
  • Scaling and reimagining job retraining and workforce skills development – encouraging lifelong learning and providing training for marketable new skills and mid-career refreshers for workers to upgrade their skills.
  • Improving business and labour-market dynamism, including mobility – this involves heightening the level of fluidity in the labour market and encouraging labour mobility through the use of technology, e.g. employing digital talent platforms to bring together workers and companies seeking their skills, and making new work opportunities accessible to those who are keen to take them up.
  • Providing income and transition support to workers – a successful transition to the new economy means nobody gets left behind. To do this, there must be financial, training and other forms of assistance to help displaced workers find gainful employment.