McKinsey reveals skills needed to survive automation

01 June 2018 4 min. read

In-demand workforce skills are set to shift towards cognitive and technological abilities as AI and automation transform the nature of work. New analysis from McKinsey assesses this trend and identifies the types of skills employees will need to compete in the 2030 workplace.

Published by the McKinsey Global Institute (MGI), the report ‘Skill shift: Automation and the Future of the Workforce’ highlights five key types of skills which together account for almost all the tasks facing a modern employee. These are physical/manual skills; basic cognitive skills; higher cognitive skills; social & emotional skills; and technological skills.

Cross-industry analysis and evaluation of US and European economic trends over the past 15 years sees the McKinsey authors conclude that automation and AI are set to drive a drastic change in the workplace demand for each type of skill. Technological skills, for instance, are surprisingly still the smallest category despite recent advances. They account for 11% of hours worked in 2016 but demand will rise considerably so that they comprise 17% of a working day by 2030.

Automation and artificial intelligence will accelerate the shift in skills that workforce needs

By contrast manual skills, which still make up the largest proportion of working hours in the US and Europe, will see demand plummet by 14% in the next 12 years. The number of hours dedicated to basic cognitive skills will fall by 15%, from 115 billion total hours in 2016 to 97 billion in 2030. Higher cognitive, social & emotional, and technological skills are all set to see demand increase

In terms of percentage of time, these more ethereal skill sets will continue to eat into the piece of the pie occupied by manual effort. While in 2002 physical work accounted for 33% of total working hours, by 2030 this will have fallen to 26%. Technological skills meanwhile will rise from 9% to 16% over the same period.

Automation and AI will accelerate skill shifts

Although the pattern is clear, the evolution in skill categories isn’t as dramatic as many tech evangelists might expect. Rather than digital skills dominating manpower in the near future, the McKinsey analysis presents a more balanced picture, with each of the five skill types occupying similar proportions of working time. Despite their precipitous drop, manual skills will still be the largest of the five.

National focus

Interestingly, although there are substantial differences between the US and European countries assessed by McKinsey, each economy remains broadly consistent in its division of skill types. For example Spain devotes 38% of its working hours to manual skills in 2016, compared to 31% in the US. But by 2030 the drop in time spent on manual tasks will be sharper than that witnessed in the US, while the demand for tech skills will rise faster.

Skill shifts will play out differently across countries, depending on economic structure, sector mix, and level

There are also, of course, differences across functional sectors, with those in manufacturing facing an entirely different future landscape than workers in healthcare or retail. But, as with country variations, McKinsey identifies a unifying pattern of tech, social, and higher cognitive skills outpacing or replacing manual and basic cognitive abilities.

Only in healthcare will demand for all types of skills increase by 2030, with demand for tech talent demand set to skyrocket. In banking & insurance, retail, manufacturing, and energy & mining, demand for manual and basic cognitive skills will fall. The sharpest contrast in skill demand over the next 12 years will be in manufacturing as the rise of Industry 4.0 encourages more collaboration between man and machine.

Skill shifts will vary across sectors as automation and AI are adopted

Survival skills

The consequences of this transformation in demand for different skills are unclear. The McKinsey authors do offer some predictions and general advice for workers and business leaders hoping to survive the disruption unscathed.

Workers are advised to get ahead of the curve by developing their higher cognitive, social & emotional, and technological skills. Examples of these respective skills include quantitative & statistical skills; teaching & training skills; and advanced IT skills & programming.

Leaders are encouraged to redefine jobs and develop agile workforces that are more flexible and independent. With competition for highly skilled workers set to heat up, organizations need to be at the forefront of adopting new technologies to attract the talent they need to both survive and succeed.