Report: CEO Survey – the opportunity in the skills shortage

Key takeaways

  • Three-quarters of Australia’s CEOs are worried about the availability of key skills in the wake of technological change and automation.
  • Reskilling employees is front of mind with executives who feel the responsibility lies with them.
  • Understanding where your company is going will make defining – and filling – the gap easier.

According to PwC’s 21st CEO survey, the effects of automation and emergent technologies on staffing are top of mind when it comes to chief executives in Australia.

Evidenced by the data from the Australian responses to the survey, local CEOs are just as anxious when it comes to employees – their reskilling, access to talent and potential unemployment – as their global counterparts.

Unlike in previous years, where Australian chief executives were significantly less worried than global CEOs about the availability of key skills (65% and 58% concerned in 2016 and 2017 respectively compared to global concern of 72% and 77%), in 2018, that number has surged to 75%.

Interestingly, while one fifth of Australian CEOs say they are planning to reduce headcount as a result of automation and technological change in the next 12 months, a more optimistic 56% believe they will actually increase their number of staff.

This makes sense. While new technology may displace some roles, its implementation will also boost economies; PwC predicts AI alone will add US$15.7 trillion to global GDP by 2030. But its value won’t arrive through staff cost cutting, rather via the exploration of new business models that free up staff to deliver greater levels of value.

Sourcing those staff is another matter.

The skill deficit

In an environment where new skills are required to suit new ways of working and previous skills become obsolete, a potential scramble over talent is emerging. Reskilling employees may prove the answer to the shortage. In Australia, 54% of CEOs agree that it is their responsibility to retrain employees whose tasks and jobs are automated by technology, albeit behind the global average of 67%.

The shortage is a global worry, and in sparsely-populated Australia, it is true that many companies may need to turn to models of business that allow access to greater talent pools such as offshoring. Added to this numbers problem are larger global trends contributing to a skills deficit.

The World Economic Forum says that given the pace of change the world is experiencing, the changes in training systems needed to reskill simply may not be able to be made to do the job in time.1 Already, university degrees are filled with knowledge that will be outdated before students graduate.

While 74% of employees believe that it is their responsibility to update their skills, according to PwC’s Workforce of the Future report, leaving this solely up to the individual will be both confusing and time-consuming, at least in the short term. Businesses prepared to reskill employees will no doubt benefit from targeted reskilling in areas of need.

Moreover, this repurposing has additional benefits. PwC’s Ross Campbell posits that upskilling and reskilling staff will also bring about productivity gains in the forms of the retention of institutional knowledge that may otherwise be lost, reduced costs in redundancy payouts and less spent in the aforementioned talent fight.2

Campbell also believes that brand and purpose will both benefit, with lower risks of liability and PR-related lay-off damage, while on the flip side, proving a business to be an employer of choice where job security is a real promise in an increasingly insecure world.

Reskilling: “How to get from A…

How does a business go about reskilling a potentially large proportion of its workforce? It may save money not to have to replace an entire staff with differently-skilled people, but that certainly doesn’t make it any less daunting a proposition.

The first step is to embrace the trend. Nothing will stop the automation and digital transformation that is coming, and those that are prepared first will benefit over those who aren’t. It’s important to understand what is going on in the digital landscape and appreciate how it will transform your business or industry.

Second, as all of this is in the pursuit of value – how much might be lost, and more importantly, how much can be gained – its important to put the customer first in any strategic thinking. What will these changes mean for your customer? How can digital and automation increase customer value and thus, your bottom line. Knowing the direction the business is going in, will help to show what is needed to get from your current position to the future goal.

Perform an audit on your current workforce. What skills do your staff have – not roles, but capabilities? This will make it easier to see where the gaps are and remove the blinkers from job positional thinking. What systems does your company have and what will it need? Knowing where you stand currently, and being able to visualise what it will take for your business to get to that new vision is a big part of the solution.

Having now identified the gap, it’s time to close it.

“…to B”

Much of this gap can be broached by reskilling. Some of it will involve traditional training, via university courses, micro-skilling courses, external providers and your own internal training capabilities. Of the Australian CEOs surveyed in the annual report, 93% are implementing continuous learning and development programmes to attract and/or develop digital talent to various extents.

They are also partnering with external providers (81% to varying degrees), outsourcing training to external providers (83% to varying degrees)  and working with educational institutions (72% to varying degrees) to attract and develop digital talent.

It’s important to note though, before a business goes out and invests in an army of data scientists, that it isn’t necessarily digital skills that are need for the digital future. Findings from the Workforce of the Future study found that the key skills of the future will be soft in nature, including problem solving, leadership, emotional intelligence, empathy and creativity skills. Indeed, 87% of CEOS surveyed agreed they needed to strengthen their soft skills alongside digital.

Hiring and training for these capabilities will be important, especially for those business not wanting to retrain their workforce every few years as more skills become obsolete and others increase in importance.

21st Annual Global CEO Survey

Attracting new talent and keeping the talent you have

Repurposing a workforce to face future business challenges is not easy, and even identifying gaps and filling them doesn’t ensure that employees will follow. There are of course many other cultural and behavioural elements that need to be addressed. For instance, KPIs and incentives need to be reflective of future goals, not current systems.

Attracting new talent should be selective, especially as in-demand employees will demand high premiums. Not having to employ an entire new workforce should go a long way to help this. Being an attractive company, suited to the demands of agile new workers – with flexible working, casual dress codes, cutting-edge digital technology and the like – is of course another kettle of (important) fish.

CEOs are right to be anxious, if for no other reason than that they are human beings in charge of people. As the Workforce of the Future says, “Protect people not jobs. Nurture agility, adaptability and re-skilling. A third of workers are anxious about the future and their job due to automation – an anxiety that kills confidence and the willingness to innovate.”

At the same time, executives should be cautiously optimistic. Employees are a business’s greatest asset, and there’s no need to lose them just because they have the wrong skills.

At least not if you help them get new ones.

For all the insights from the PwC 21st CEO Survey visit the Australian results homepage, or view the global report.