The future of jobs

from PQ magazine, August 2023

A question for Tom

The World Economic Forum’s report on the future of the job market is out. So what is it predicting?

Almost a quarter of jobs (23%) are expected to change in the next five years, says the latest report from World Economic Forum. According to the estimates of the 803 companies surveyed for The Future of Jobs Report 2023, employers anticipate 69 million new jobs to be created and 83 million eliminated (among the 673 million jobs registered), a net decrease of 14 million jobs, or 2% of current employment.

Macrotrends, including the green transition, ESG standards and localisation of supply chains, are the leading drivers of job growth, with economic challenges including high inflation, slower economic growth and supply shortages posing the greatest threat. Advancing technology adoption and increasing digitisation will cause significant labour market churn, with an overall net positive in job creation.

“For people around the world, the past three years have been filled with upheaval and uncertainty for their lives and livelihoods, with Covid-19, geopolitical and economic shifts, and the rapid advancement of AI and other technologies now risks adding more uncertainty,” said Saadia Zahidi, Managing Director, World Economic Forum. “The good news is that there is a clear way forward to ensure resilience. Governments and businesses must invest in supporting the shift to the jobs of the future through the education, reskilling and social support structures that can ensure individuals are at the heart of the future of work.”

From ‘robot revolution’ to algorithm Armageddon?

While technology continues to pose both challenges and opportunities to labour markets, employers expect most technologies to contribute positively to job creation.

The fastest-growing roles are being driven by technology and digitalisation. Big data ranks at the top among technologies seen to create jobs, with 65% of survey respondents expecting job growth in related roles. The employment of data analysts and scientists, big data specialists, AI machine learning specialists and cybersecurity professionals is expected to grow on average by 30% by 2027. Training workers to utilize AI and big data will be prioritised by 42% of surveyed companies in the next five years, ranking behind analytical thinking (48%) and creative thinking (43%) in importance. Digital commerce will lead to the largest absolute gains in jobs: about two million new digitally enabled roles are expected, such as e-commerce specialists, digital transformation specialists, and digital marketing and strategy specialists.

At the same time, the fastest-declining roles are also being driven by technology and digitalisation, with clerical or secretarial roles including bank tellers, cashiers and data entry clerks expected to decline fastest.

The Future of Jobs Report 2023 suggests that tasks are seen as no more automated now than they were three years ago when the report was last published. About a third of tasks (34%) are currently automated, just 1% above the 2020 figure. Surveyed companies also revised down their expectations for further automation, to 42% of tasks by 2027, compared with 2020 estimates of 47% of tasks by 2025.

But while expectations of the displacement of physical and manual work by machines has decreased, reasoning, communicating, and coordinating – all traits with a comparative advantage for humans – are expected to be more automatable in the future.

Artificial intelligence, a key driver of potential algorithmic displacement, is expected to be adopted by nearly 75% of surveyed companies and is expected to lead to high churn – with 50% of organisations expecting it to create job growth and 25% expecting it to create job losses.

Rise of green, education and agriculture jobs

Investment in the green transition and climatechange mitigation, as well as increasing consumer awareness of sustainability issues, are driving industry transformation and opening new opportunities in the labour market. The strongest net job-creation effects are expected to be driven by investments that facilitate the green transition of businesses, with more than half of respondents expecting it. As countries seek more renewable energy sources, roles including renewable energy engineers and solar energy installation and systems engineers will be in high demand.

Investment will also drive growth in more generalist sustainability roles, such as sustainability specialists and environmental protection professionals, which are expected to grow by 33% and 34% respectively, translating to growth of around one million jobs.

However, the largest absolute gains in jobs will come from education and agriculture. The report finds that jobs in the education industry are expected to grow by about 10%, leading to three million additional jobs for vocational education teachers and university and higher education teachers. Jobs for agricultural professionals, especially agricultural equipment operators, graders and sorters, are expected to see a 15% –30% increase, leading to an additional four million jobs.

Leading recruitment company Indeed (part of the Recruit Holding company) found that while demand for social jobs such as those in health and education have grown faster during the pandemic, these job openings are harder to fill than others.

“At Recruit, we believe we must continue to embrace AI and technology to help job seekers and employers as we navigate near-term macroeconomic headwinds and long-term labour market challenges,” said Hisayuki Idekoba, President and CEO of Recruit Holdings. “We expect a labour shortage to remain for many years ahead, across many sectors and particularly as the population ages. Therefore, it is essential that we identify new ways to simplify the hiring process to support a thriving economy and society where everyone can prosper together.”

Increasing urgency for reskilling

Companies report that the skills gaps and an inability to attract talent are the key barriers to transformation, showing a clear need for training and reskilling across industries. Six in 10 workers will require training before 2027, but only half of employees are seen to have access to adequate training opportunities today. At the same time, the report estimates that, on average, 44% of an individual worker’s skills will need to be updated.

The gap between workers’ skills and future business needs puts the onus on companies and governments to enable learning and reskilling opportunities. Government funding for skills training would help connect talent to employment, according to 45% of businesses surveyed.

For example, while there is continued growth in green jobs in the past four years, as indicated by additional research conducted by LinkedIn for this year’s report, reskilling and upskilling towards green skills is not keeping pace.

“The sustained growth of green jobs is really great news, particularly for job seekers who are facing upheaval in the labour market,” said Sue Duke, Head of Global Public Policy at LinkedIn. “But LinkedIn’s data is clear that while there’s strong demand for talent with green skills, people are not developing green skills at anywhere near a fast enough rate to meet climate targets. There is an opportunity for everyone to help turn this around. Governments must champion the green skills agenda and businesses can and must do more to equip their employees with the skills needed to deliver genuine environmental change.”

In response to the cost-of-living crisis, 36% of companies recognise that offering higher wages could help them attract talent. Yet, companies are planning to mix both investment and displacement to make their workforces more productive and cost-effective. Four in five surveyed companies plan to invest in learning and training on the job as well as automating processes in the next five years. Two-thirds of companies expect to see a return on investment on skills training within a year of the investment, whether in the form of enhanced cross-role mobility, increased worker satisfaction or improved worker productivity.

Strong cognitive skills are increasingly valued by employers, reflecting the growing importance of complex problem-solving in the workplace. The most important skills for workers in 2023 are seen to be analytical thinking and creative thinking, and this is expected to remain so in the next five years. Technological literacy, and AI and big data specifically, will become more important and company’s skills strategies will focus on this in the next five years.

Faster reskilling is necessary – and possible. “Our research found that individuals without degrees can acquire critical skills in a comparable timeframe to those with degrees, highlighting the potential for innovative approaches such as industry micro-credentials and skills-based hiring to tackle skills gaps and talent shortages,” said

Jeff Maggioncalda, CEO, Coursera. “However, it will require collective action from public and private sectors to provide the affordable, flexible reskilling pathways at scale that displaced workers need to transition into jobs of the future.”

“The latest findings in the Future of Jobs Report renew calls for action from all labour market stakeholders,” said Sander van ‘t Noordende, CEO, Randstad. “Acceleration in digitalisation, AI and automation are creating tremendous opportunities for the global workforce, but employers, governments and other organisations need to be ready for the disruptions ahead. By collectively offering greater skilling resources, more efficiently connecting talent to jobs and advocating for a well-regulated labour market, we can protect and prepare workers for a more specialized and equitable future of work.”