What is workforce transformation?
Peter Thomas director of FORWARD — The RMIT Centre for Future Skills and Workforce Transformation — writing with development partners Pete Cohen, Jane Howie, Sally McNamara, Inder Singh and Kate Spencer on some of the current issues around workforce transformation.
The notion of ‘workforce transformation’ is nothing new.
The workforce is transforming and has constantly been transforming. This has been true since the industrial revolution and long before it.
Aside from the transformations wrought by economic change, technology, the pandemic, shifting geopolitical alignments, changing demographics and generational attitudes or the changing definition of competitiveness to include managing the transition to a sustainable economy or increasing equality of opportunities, workforce transformation is intimately tied to the skills needed for people to engage in economically and socially productive activity.
Here, of the many dimensions of workforce transformation, an enormous amount of effort is being expended by governments, industries and companies.
For workers, in the face of what has been called ‘The Great Resignation’ (or maybe ‘The Great Re-Evaluation’ or ‘The Great Re-think’), perhaps the topic that is most top of mind is career paths. People have recognised that thinking short-term about their career is of no advantage as they have seen how the pandemic has wrought its effects on the economy.
This is an enormous challenge to employers.
The ‘War for Talent’ is now not about employee benefits, as it was in the 2010s, but about providing personal and professional pathways for growth, meaning that employers must find ways to identify future skills and then help their workers acquire them. Those companies that make strategic investments in understanding future skills needs and who commit for the longer term to upskilling programmes — augmenting the knowledge, skills, and competencies that help employees advance their careers — will reap the benefits in terms of employee engagement and retention in addition to increased productivity.
Many organisations, faced with an urgent demand for new skills, take a reactive approach — building reskilling solutions based on demands from the business. This approach may be too slow as the business has changed by the time this is done, and so reactive organisations may be too slow to get the skills to employees when they’re needed the most. One study suggests that employees apply only 54% of the new skills they learn after 12 months.
Another approach is predictive — to try and determine future skills needs. However, prediction is risky and may lead to investments in outdated skills, which are hard to undo.
An alternative is to spot and close skills gaps using skills-sensing networks: regularly bringing together input from employees, leaders, and customers by facilitating a network of stakeholders who can report on the specific skills needs in their areas. These networks may be better able to monitor changing skills needs.
Of course, one response to evolving skills needs is more training. But according to Gartner’s 2018 Shifting Skills Survey of more than 7,000 employees worldwide, there is no significant relationship between the time employees spend in formal (virtual or classroom) training and the percentage of skills they use.
Instead. Gartner proposes skills accelerators that leverage existing resources and expertise to provide just in time reskilling. This is done by identifying skills adjacencies (building shortcuts to in-demand skills by identifying adjacent, stepping-stone skills that already exist); training skills disseminators — a cohort of motivated and influential employees who coach their peers; and by using data to tailor upskilling at the moments when skills needs occur.
All of this is happening against the backdrop of economic change.
The Australian economy has experienced over three decades of uninterrupted growth. Employment in occupations that require an undergraduate degree or higher qualification has increased by ten percentage points over the twenty years to 2018, while the share of jobs requiring year 12 or lower qualifications has fallen. According to OECD data, only half of people found their training very useful for their job, only 40% of workers in jobs with a significant risk of automation participate in training and almost 50% of adults neither train nor want to train.
We can expect these trends to continue, driven party by digital and automation technologies — the internet of things, artificial intelligence, automation and robotics and the metaverse — meaning that the skills needed will continue to change, and the workforce will need to continue to transform.
There will, of course, remain areas of the economy where there is a continued need for traditional technical skills — including construction, ICT, or health and social care — and many of these occupations will remain essentially unchanged and some may suffer from labour shortages: for example, in public infrastructure occupations, labour shortages are anticipated to be three times greater than in 2017–2018, peaking at a likely shortfall of 93,000 workers in early 2023 — 48% higher than projected supply.
The challenge for companies in these sectors is to adopt forward-looking, longer-term workforce strategies such as re-analysing skills needs, creating new recruitment strategies or mixing apprentices and trainees with existing workers. These longer-term strategies should aim to cultivate skills development cultures that can have an impact not only now — by addressing current skills gaps — but in the future, aligning workforce capability to business strategy.
In particular — and has now been widely recognised through the pandemic — digital learning and development systems are of crucial importance.
While embedding social learning platforms or developing in-house systems is one part of the solution, building closer partnerships with education and training providers for flexible qualifications is essential. And while much upskilling and reskilling is likely to have a digital backbone, mixes of face-to-face and remote learning, coaching, social learning platforms, cross-functional teamwork, agile processes and learner input to learning content are also valuable — as are combinations of short courses, work-integrated learning, microcredentials and full qualifications.
As the needs of industry change to recognise the demands of workforce needs, the learning opportunities provided by the vocational education sector will also change. The demand is for flexibility and speed, which has led to companies bypassing the formal education system and implementing company-specific competency frameworks, embedding social platforms, awarding digital badges and creating e-portfolios.
The qualifications sought by industry need to be designed differently, combined differently, and accessible across contexts in many more ways. An example is Atlassian’s scholarship programme with Melbourne-based education technology company HEX that provides short courses on leadership, basic financial literacy, innovation, ethics and workplace technology. While intended as primarily a way to give talented youngsters from low socio-economic backgrounds access to opportunities, it also primes the STEM pipeline from which Atlassian draws talent.
The issues are also echoed in an Ai Group survey of 115 Australian CEOs on their skill needs and workforce development plans. The survey revealed that the nature of work is evolving in an unprecedented way and that learning should be immersed in work environments. The report also suggested a need for broad digital skills development that integrates human capabilities for work-based learning and flexible qualifications that blend short-form training with other forms of learning.
‘Workforce transformation’ is complex and sits in a larger context.
Organisations need to not just upskill and reskill but need to be creative in how they think about their workforce by, for example, creating talent pools based on flex and hybrid work and continually monitoring and renewing their workforce strategies — including their learning strategies, as shown by Unilever’s Flex Experiences platform.
And in all of this, organisations need to ensure cultural alignment and inclusivity to be better able to access, align, assess, engage, reward and lead their workforces using human-first strategies that ensure people are empowered by new technologies.
But, as many commentators have noted, the future of work is now. That means that companies and their workforces need to pull off the trick of living in the future.
At its heart, workforce transformation is about change — at whatever pace it happens. And here, too, there is nothing new. As the Greek philosopher, Heraclitus (535 BC- 475 BC) said, “There is nothing permanent except change.”
FORWARD is the RMIT Centre for Future Skills and Workforce Transformation.
Our role is to build an innovative learning ecosystem at scale, create new collaborative applied research and invent next-generation skills solutions that will catalyse workforce development in the future-oriented industries crucial to Victoria’s economic renewal.
We lead collaborative applied research on future skills and workforce transformation from within RMIT’s College of Vocational Education, building and scaling the evidence and practice base to support Victorian workforce planning and delivery and acting as a test lab for future skills to develop and pilot new approaches to skills training and education through digital transformation and pedagogical innovation.
We leverage RMIT’s multi-sector advantage to translate research insights into identifying workforce requirements and the co-design of practice-based approaches with industry.
Contact us at forward@rmit.edu.au
