While it is true that the increased use of machines will do away with 85 million jobs in the next five years, it is also true that 97 million new jobs will be created. However, the pace at which jobs will be created will be slower than the pace at which they are being lost, which may be a matter of concern.
A report brought out by the World Economic Forum points out that technological advancement, especially in the area of robotics and artificial intelligence will result in a net increase in jobs over the next five odd years. However, the job market will be disrupted in more ways than one. The ‘double disruption’ is due to the pandemic-induced economic slump and the increasing use of technology. Of the organizations surveyed, over two-fifths are seriously considering making their workforces leaner and opting for modern technology. On the one hand, about 85 million jobs will be lost to automation and on the other, 97 million new jobs will come up.
Technology and Digitalisation
There will be increasing adoption of technology, and more organizations will turn to cloud computing, big data, and e-commerce. Inclination towards encryption, non-humanoid robots and artificial intelligence has been observed. About 84 percent of employers are gearing for the digitalization of working processes, as well as considering remote working as a permanent option. Most feel that there is potential to move about 44 percent of the workforce to remote working. A significant one-third of the organizations are willing to work on ways to ensure a sense of community, connection, and belonging among remote-working employees via digital tools. About 41 percent plan to expand their use of contractors for specialized jobs and 34 percent intend to expand their workforce by integrating technology. In five years, the time spent on current tasks at work by humans and machines will be the same. A significant share of companies is looking at relocating, altering value chains, and reducing the size of their workforce due to reasons other than technology.
Inequalities in the job market will also increase because the aviation and hospitality sectors, were the most affected by the pandemic, and these sectors comprised mostly younger employees, with lower salaries, of which most were women.
not only will there be higher inequality in terms of income, but about 115 million people will be driven to extreme poverty.
The number of individuals seeking online courses has increased four-fold. There has been a five-fold increase in employers offering learning opportunities to their employees and a nine-fold hike in the number of learners accessing online courses via government programs. Employed individuals are seeking out personal development courses, the demand for which has grown 88 percent. Job seekers are opting to learn digital skills such as data analysis, computer science, and information technology.
Reskilling and upskilling
Given the labor market constraints, there is an urgent need to reskill and upskill workers. Training is required for those who are continuing in their present jobs as well as those whose jobs are threatened. About 50 percent of all employees will need reskilling and about 40 percent will witness a change in core skills in the next few years.
Human capital investment
An average of 66 percent of employers expect a return on investment in upskilling and reskilling within a year. Almost 17 percent are uncertain about enjoying any return on their investment. On average, only a little more than 70 percent of employees will receive reskilling and upskilling opportunities from their employers in the next five years. On the other hand, only about 42 percent of the employees are likely to opt for employer-supported reskilling and upskilling opportunities.
Reskilling and upskilling opportunities are the need of the hour in the public sector. Presently, only 21 percent are able to utilize public funds to support their employees through reskilling and upskilling.
With the rise in unemployment figures, governments across the world will have to look at expanding social protection and offer retraining facilities to displaced workers so that they can hope to get jobs in the future.
Environmental, social, and governance (ESG) metrics
The WEF report suggests that organizations invest in better metrics of human and social capital by adopting environmental, social, and governance (ESG) metrics, in combination with renewed measures of human capital accounting.
The awareness regarding the reskilling of employees, via industry coalitions and public-private tie-ups, as cost-effective and beneficial ways of training is quite high amongst organizations. Companies expect to internally redeploy almost half their workers displaced through technological automation and augmentation, instead of resorting to layoffs.