While the future of work is human, Australia faces a major skills crisis

In BICSI Bytes, Newsby info@bicsi.com.au

With skills increasingly becoming the job currency of the future, a new Deloitte report found that the future of work has a very human face. Yet Australia is challenged by a worsening skills shortage that requires an urgent response from business leaders and policy makers.

The report, entitled ‘The path to prosperity: Why the future of work is human’ seeks to:

  • dispel some commonly held myths around the future of work;
  • uncover big shifts in the skills that will be needed by the jobs of the future;
  • reveal that many key skills are already in shortage, with the national skills deficit set to grow to 29 million by 2030;
  • recommend businesses embrace, and invest in on-the-job learning and skills enhancement; and
  • get Australia’s approach to the future of work right, which could deliver a AU$36 billion national prosperity dividend.

According to Deloitte Australia CEO, Richard Deutsch: “In spite of current global uncertainty, Australia has a record run of continuous economic growth. But our future economic standing isn’t guaranteed, and we certainly shouldn’t take it for granted.

“There is clearly some anxiety about the future of work. Will robots send unemployment soaring? Will the advance of automation mean we lurch from one insecure job to another? Will new technologies keep our wage growth fixed to the floor?

“We say there’s no need to be scared, and that businesses need to be brave, not afraid. These myths aren’t just wrong, they’re potentially damaging if we allow them to lead us to making wrong choices.

“People, and their unique interpersonal and creative skills, will be central to the future of work, and how we structure this future and prepare our workers, will say a lot about us as a society. Our decisions now will be a key driver of our economic success. After all, for every problem there’s a job, and the world isn’t running out of problems.”

Lead report author, David Rumbens added: “We don’t face a dystopian future of rising unemployment, aimless career paths and empty offices. Yes, technology is driving change in the way we work, and the work we do, but it’s ultimately not a substitute for people.

“Technology is much more about augmentation than automation, and many more jobs will change in nature because of automation, rather than disappear altogether. We can use technology to our advantage to create more meaningful and productive jobs. And making better choices to facilitate this, could boost national GDP by $36 billion a year.”

The report dispels three myths that tend to dominate discussions around the future of work:

Myth 1: Robots will take jobs. Technology-driven change is accelerating everywhere, yet unemployment is close to record lows, including in Australia (the lowest since 2011). New technologies will have the capacity to automate many tasks, but also create as many jobs as they kill, and employment is growing in roles that are hardest to automate.

Myth 2: People will have lots of jobs over their careers. Despite horror headlines, work is becoming more secure, not less, and Australians are staying in their jobs longer than ever. Nor is the ‘gig-economy’ taking over. Casual jobs are a smaller share of all jobs than 20 years ago, while the rate of self-employment has been falling for almost 50 years and is at a record low.

Myth 3: People will work anywhere but the office. The office isn’t going away any time soon, and city CBDs will remain a focal point for workers. More people are working flexibly, but on a given day only one in 25 workers work remotely, even though almost one in five Australian employers offers the ability for staff to work from home. Being physically close to other creative people is becoming more important, not less, and working together helps us collaborate and socialise, and provides infrastructure and support.

The big skills shift ahead: from hands…to heads…to hearts

“That today’s jobs are increasingly likely to require cognitive skills of the head rather than the manual skills of the hands won’t be a surprise,” continued Rumbens. “But there’s another factor at play. Employment has been growing fastest among less routine jobs, because these are the ones that are hardest to automate.”

More than 80% of the jobs created between now and 2030 will be for knowledge workers, and two-thirds of jobs will be strongly reliant on soft-skills.

“Yet something new is also happening,” Rumbens said. “Jobs increasingly need us to use our hearts – the interpersonal and creative roles, with uniquely human skills like creativity, customer service, care for others, and collaboration that are hardest of all to mechanise. Demand here is set to soar for decades, and this is actually a liberating trend. Much of the boring, repetitive work will be taken care of by technology, leaving the more challenging and interesting work for humans.”

Critical skills and the multi-million gap

As work shifts to ‘skills-of-the-heart’, Rumbens said the research reveals that Australia already faces skills shortages across a range of key areas critical to the future of work: “These new trends are happening so fast they’re catching workers, businesses and governments by surprise.

“At the start of this decade, the typical worker lacked 1.2 of the critical skills needed by employers seeking to fill a given position. Today, the average worker is missing nearly two of the 18 critical skills advertised for a job, equating to 23 million skills shortages across the economy.

“This skills gap is significant, and it’s growing. If we continue as we are, our national skills shortage will grow to 29 million by 2030, and the bulk of those ‘missing skills’ will be those of the heart.”

The report looks at 35 skills, and found that today:

  • Of the three that require work of the hands, none are in shortage;
  • Of the 23 under work of the head, 16 (70%) are in shortage; and
  • Of the nine classified as required for work-of-the-heart, 8 (89%) are in shortage.

“Skills of the head and, increasingly, the heart are going to be in strong demand in the future, but we face significant under-supply now, and we forecast that this will only get worse,” Rumbens added. “For example, employers would prefer 3 million more people with digital literacy than what’s available. But this shortage is dwarfed by customer-service skills, the most demanded skill in the Australian economy and where the shortage in these skills is already severe, representing around 5.5 million workers. The extent of skills shortages, and how long until this peaks, will vary by industry but be felt throughout the economy.

“They will be most prolific where people are key to driving how businesses create value, and five industries – government services, construction, health, professional services and education – are set to face more than two million skills shortages at their peak.”