4IR will widen the skills gap chasm and reduce the need for full-time employees

Industrial psychologist Phiona Martin on the impact this will have on HR leaders and their talent management efforts.

The Fourth Industrial Revolution (4IR) is here and impacting countries, industries and jobs at varying degrees. The key, for HR leaders, is to synthesise the plethora of emerging 4IR data and localising it within the context of their talent. This article looks at two key themes (among many) on 4IR and their implications for talent management. The first theme considers the potential polarization between skilled and non-skilled workers, which can lead to deeper social inequalities. The second point addresses the implications of the changing nature of work and an increasing prevalence towards “gig work”.

Widening skills gap

The Future of Jobs Report published by the World Economic Forum (WEF) highlights that, if the manner in which the transition of work performed by machines versus humans is not adequately managed, it can lead to the widening of skills gap and inequality among workers. The research revealed that most re-skilling and upskilling efforts by companies were focused on greatly skilled and highly valued employees in contrast to their semi and unskilled counterparts. Furthermore, only a third of employers in the report indicated prioritising “at-risk employees” who were in roles expected to be most affected by technological disruption. In other words, those most in need of reskilling and upskilling were least likely to receive such training. This threatens to exacerbate the skills gaps further as Industry 4.0 transforms business and jobs faster than workers can adapt.

Implications for talent management: The point of departure for HR leaders concerns if their organisation has systematically assessed the skills or roles that will likely be significantly affected by technology in the coming (3-5) years. Having an informed view of “at risk” employees is integral in formulating any business workforce transition plan. If, as the WEF report states, most Learning and Development efforts in companies are “elitist” and skewed towards highly skilled employees, how can business help son-to-be-displaced workers notwithstanding bottom-line concerns? 

Directionally speaking, supporting workers in job transitions is a matter that must be addressed at the organisational level and beyond if it is to have the mass impact that is required.

It necessitates a macro-level approach which includes policy makers and other stakeholders.  HR leaders remain imperative in directing these conversations as custodians of human capital within the business. A great illustration of a talent management response to 4IR is that of ManpowerGroup in France which implemented an initiative to help its redundant workers through their career transition by developing their skills for in-demand sectors. They ran four-month long programmes comprised of skills assessments and training in both hard and soft skills. This was followed by a “bridging” program that redeployed unemployed people to fill in-demand positions with a placement rate of 90%. Talent strategies need to be strategically 4IR aligned and training should go beyond a “tick box” exercise to fulfil talent requirements in the age of rapid automation and AI disruption.

Reduction of full-time employees

The emergence of 4IR has ushered in different and new ways of wor. It has created a new economy of gig-based independent contractors who are blurring the traditional definitions of employment. The speed at which employees need to be reskilled has created a market for highly skilled “gig workers” to fill in the gaps. The WEF report illustrated a strong trajectory of most companies reducing full-time workforce engaging more workers on a flexible basis. Companies are moving towards filling their skills gaps through the engaging contract, freelance and temp workers rather than upskilling internally. 

Implications for talent management: With companies moving towards increasing the use of gig workers, particularly in the more developed economies, what are the considerations for workforce planning? Talent strategies need to examine the parts of their businesses that are better served by gig employees or deconstructing work in the roles that are difficult to fill or where the costs exceed the value in the long run.  Engaging gig workers provides companies access to scarce skills and market segments they may not otherwise be able to attract in a full time employment context. The inverse of is this, from a talent management perspective, is the risk companies may face by losing some of their skilled workforces to the freelance and gig market. 

HR leaders should be at the forefront of contextualising their talent needs in the scope of 4IR. Given the unprecedented pace of change taking place, the management of talent needs to integrate with the emerging trends caused by 4IR. With a skills landscape that significantly differs from more developed countries, how do we ensure our organisations are equipped to deliver on goals with the right skills. This is notwithstanding the managing of transitions of soon-to-be-displaced workers.