McKinsey reveals skills needed to survive automation

01 June 2018 Consulting.us

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.

×

Ohio-based consultancy Change 4 Growth launches UK office

12 April 2019 Consulting.us

Westerville, Ohio-based transformation consultancy Change 4 Growth (C4G) has launched its first location in the UK.

C4G specializes in transformational change services, and has developed a strong client roster within the retail sector, supporting notable firms such as American Eagle, Abercrombie & Fitch, and Eddie Bauer. C4G delivers consulting offerings in the areas of organizational change management, culture alignment and engagement, instructional design and e-learning, leadership development, and project delivery support.

With the retail sector being hit by violent waves of disruptive e-commerce and shifting consumer preferences, massive organizational change is increasingly in the cards, whether as a preventative measure for healthy future growth or as an “it’s probably too late” restructuring initiative. 

C4G was founded by CEO Beth Thomas, a veteran consultant with 25 years of experience supporting organizations through major transformations, organizational change, and employee engagement initiatives. Before founding C4G in 2017, Thomas was managing director of consulting at human resources outsourcing and advisory firm Sequent, and senior vice president and head of retail training and development at banking giant JP Morgan Chase.

Ohio-based consultancy Change 4 Growth launches office in the UK

C4G's new location, at London LABS House, will be helmed by managing director David Lucas, who will lead the firm’s change management offerings in the UK.

UK-based retail consultancy Thought Provoking Consulting (TPC) Group made a significant investment in C4G last year. The investment allowed TPC to expand its retail sector offering into the area of organizational change management. C4G’s London office will be at the same location as TPC’s London headquarters.

The UK retail market is currently an attractive target for change consultants (and insolvency and restructuring specialists, for that matter). The UK High Street has been battered by e-commerce incursion, Brexit pressures, and stagnating real wages, with PwC reporting 2,692 retail store closures versus 1,569 openings in the first half of 2018.

As the UK braces for the fallout of a potential no-deal Brexit and the looming end of the business cycle, C4G will likely find fertile ground for its retail-focused transformation services.

"Many of our clients are global organizations who have facilities and employees around the world, and as an avid admirer of Britain's innovative retail community, it has long been my intention to open a Change 4 Growth office in the UK," Thomas said. "Now, with David Lucas, who brings a proven track record of transformational change at the helm and our sister company, Thought Provoking Consulting, also located in London, we're more excited than ever to explore the synergies to be discovered in having a UK powerhouse to support not only the retail sector but all industries."

Related: US healthcare consulting firm Vynamic expands into UK
Digital talent marketplace Catalant opens an office in London