The Fourth Industrial Revolution — commonly referred to as Industry 4.0 or i4.0 — is the next stage in digital transformation. While it started in manufacturing, it is beginning to impact financial services, life sciences, and all other industries and sectors. It’s driven by big data, powerful analytics, a rise in computing power, increased connectivity, new methods of human-machine interaction and advances in transmitting digital directives to the physical world (see reference 1). Currently, it encompasses a wide range of advanced technologies including the Internet of Things (IoT), automation, artificial intelligence (AI), robotics and additive manufacturing.
Like the First, Second and Third Industrial Revolutions, Industry 4.0 is transforming not just our world, but also the world of work. As new technologies are increasingly adopted, companies will need talent with the skills to leverage them. Yet without a definite view of exactly what technologies will be developed and how they will impact work, how can companies prepare their workforces and ensure they remain competitive?
It is imperative to examine how 4.0 is causing such a widespread skills mismatch; discuss why timely reskilling of companies’ workforces is critical; and understand how companies can approach reskilling.
the looming skills mismatch: a threat to competitiveness
With technological advancements occurring at an accelerated rate, it’s increasingly challenging for employers to find talent with the right competencies. In effect, what is currently transpiring in the workplace is a growing skills mismatch between what companies need and what talent can offer. There are four reasons for this.
First, there’s the growing role of automation in existing occupations. Sixty percent of all occupations consists of at least 30 percent of tasks that can be automated (see reference 3). As a result, jobs are changing, with talent taking on more high-level and strategic roles. Consequently, workers will need reskilling to keep adding value to the company. Without reskilling, they will simply become displaced.
Second, there’s an acutely heightened need for talent with advanced technological skills to work with new technologies such as AI, data analytics, robotics and blockchain in settings ranging from smart factories to networked supply chains to training simulations for hospitals. However, since these skills are relatively new, they’re in low supply.
Third, as technologies become more advanced and machines become smarter, people will not only utilize machines in their current occupations; new roles will develop that have to do with programming, supervising, and troubleshooting interconnected machines. These roles will not only require skills that are already in low supply, but also likely new skills that we can’t predict.
Fourth, many more technologies are likely to be developed. Again, we currently can’t foresee which skills those technologies will entail. Nevertheless, by 2030, between 20 million and 50 million new tech jobs are expected to be created worldwide (see reference 5).
As a result of these factors, companies are facing two threats. If they don’t have the skills they need to operate effectively, they’ll lose their competitive positioning. In addition, if they can’t re-skill their current workforces, they’ll face the heavy financial burden of displaced workers. Experts predict that worldwide, between 75 million and 375 million workers could be displaced by 20306. Companies that fail to provide for their employees could potentially face a social backlash that could impact their business.
work with a forward-looking global workforce partner
The answer to the skills mismatch is to ensure workers have access to continued education throughout their careers in order to remain productive and innovative (see reference 7). Yet while several countries are trying to address this via labor and education policies and many workers are even willing to re-skill themselves, neither solution guarantees that companies will consequently be able to find precisely the skills their operations require.
Consequently, employers need to take responsibility for the re-skilling of their own workforces to ensure they have access to the exact industry-specific and occupation-specific competencies they need as i4.0 progresses.
And without any way to see over the horizon to predict exactly what (new) skills will be required, they’re best advised to seek external advice.
At Randstad, we’re continuously developing data-driven solutions to the skills challenges that i4.0 poses to our clients. By combining analytics, new technologies and our solid knowledge of the talent space, we help organizations across the globe determine where their skills vulnerabilities are and find effective ways to reskill their employees — whether that’s by means of external training, internal training, mentorships, job rotations, adult apprenticeships, or a combination of all the aforementioned. This results in agile workforces where continuous reskilling, as an integral aspect of versatility, becomes ingrained in the culture.
Unfortunately, it is inevitable that some workers will be displaced. Nevertheless, this is also an area where external expertise can help organizations create effective strategies that benefit both the company and the workers.
business benefits
Working with a global workforce solutions partner like Randstad to avoid skills mismatches and reskill the workforce has several benefits. First, it enables companies to be prepared for the changes that are coming, which will allow them to respond more effectively. Second, when companies invest in up- or reskilling their own workforces, they’re building an engaged workforce that already understands their missions and cultures. This increases the odds of employees being loyal and staying with the organization. And third, by having the required skills in-house when needed, companies can ensure the continuation of business and protect their bottom lines for the long term.
conclusion
Ultimately, i4.0 is already here, and it’s impacting the world of work in ways few imagined. As we progress into this new phase, the impact will become more widespread until it is felt by every business across the world. For this reason, building a relationship with a forward-thinking workforce solutions firm like Randstad in a timely manner is nothing short of a strategic decision that can define the future success of your company.
To learn more about skilling, reskilling and upskilling, and how these vital processes can help your organization succeed, take a look at our guide highlighting the latest statistics and research in this area.
References:
[1] https://www.mckinsey.com/business-functions/operations/our-insights/manufacturings-next-act
[2] Skill Development for Industry 4.0, BRICS Skill Development Working Group
[3] A future that works: Automation, employment, and productivity, McKinsey Global Institute
[4] Reskilling for the Fourth Industrial Revolution. Formulating a European Strategy, Jacques Delors Institut Berlin
[5] Jobs lost, jobs gained: Workforce transitions in a time of automation, McKinsey Global Institute
[6] Jobs lost, jobs gained: Workforce transitions in a time of automation, McKinsey Global Institute
[7] Accelerating Workforce Reskilling for the Fourth Industrial Revolution
Other Sources
www.randstad.ca/workforce360-trends/archives/workforce-2025-a-peek-at-the-future-of-work_577/