2. Failure to address the demands of shifting skills could exacerbate social tensions and lead to rising skill-and-wage bifurcation. hereLearn more about cookies, Opens in new In our survey, greater use of various types of freelancers and temporary workers is one of the top organizational changes; 61 percent of respondents expect to hire more temporary employees. At the same time, a range of higher-education institutions and other experts have called for universities, colleges, and other educators to play a more active role in filling the needs of the labor market, including by increasing data-science and other high-tech courses. The share of predictable manual jobs, such as driving, packing, and shelf stocking, will substantially decline. collaboration with select social media and trusted analytics partners To measure skill shifts from automation and AI, we modeled skill shifts going forward to 2030—and found that they accelerated. We also see successful companies scaling automation across the organization. But before employees can work effectively with automation technologies, they must be taught how to do so. The three imperatives for successful automation shouldn’t be looked at separately but rather as parts of the same automation mandate. Demand for higher cognitive skills will grow, driven by the need for greater creativity and complex information processing. Companies will need to choose from the following five main types of action as they build their future workforce: Geography also plays a role in determining which workforce-skill decisions to make, with a net difference between European and US companies. For example, in our survey, only 37 percent of respondents considered it important to build partnerships with educational institutions for effective retraining, compared with 47 percent who planned to perform retraining internally. Companies, too, will need to rethink how work is organized within their organizations. Some jobs will shrink after automation, while others will expand. Press enter to select and open the results on a new page. The decline will be in nearly all sectors as machines increasingly take over straightforward data-input tasks. McKinsey & Company 3 Last 50 years of growth, 1964-2014 CAGR for G19+Nigeria % Next 50 years of growth CAGR for G19+Nigeria, % … Nearly all business leaders we surveyed (88 percent) said they believe HR functions will need to adapt at least moderately. McKinsey_Website_Accessibility@mckinsey.com About 77 percent of the respondents in our survey expect no net change in the size of their workforces in either Europe or the United States as … The increase in the need for social and emotional skills will similarly accelerate. They also suggest that successful organizations continue to focus on employees as much as technology—and that they have instituted new ways of doing so in which employees work alongside the new technologies. Fifty-five percent of respondents at successful smaller companies say their organizations have established key perfor­mance indicators to track the impact of automation efforts, compared with 37 percent of respondents at other smaller companies. A survey of more than 3,000 C-suite executives in seven countries—Canada, France, Germany, Italy, Spain, the United Kingdom, and the United States—that we conducted as part of our research confirms our quantitative findings. We define “large companies” as those with annual revenues of $1 billion or more, according to respondents. The most commonly deployed technologies, according to respondents, are business-process-management platforms and robotic process automation (Exhibit 2). hereLearn more about cookies, Opens in new Just over half of respondents at these companies say their leaders clearly understand the total costs, compared with one in five at other relatively small companies. It will also have an impact on product development and on marketing and sales. While some of these skills, such as empathy, are innate, others, such as advanced communication, can be honed and taught. Implementing automation programs typically requires creation of new roles as well as modification of existing ones. This has been emphasized by a recent survey from McKinsey, which showed that whilst many companies are dabbling with AI and automation, a relatively small number are actually achieving … Companies … Between 2016 and 2030, demand for these skills will fall by 11 percent overall in the United States and by 16 percent overall in Europe. From the results of our survey, we can already see the beginnings of intensified competition for top talent. McKinsey Global Institute partner Michael Chui explains how automation is transforming work. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. For example, while social and emotional skills will be in growing demand across all five sectors, the need for basic cognitive skills will decline in banking and manufacturing, stay flat in healthcare, and only fall back slightly in retail. The mix of physical and manual skills required in occupations will change depending on the extent to which work activities can be automated. At a time when companies are increasingly embracing technologies such as robotic process automation, natural language processing, and artificial intelligence, and as companies’ automation efforts mature, findings from our second McKinsey Global Survey on the topic show that the imperatives for automation success are shifting. cookies, McKinsey_Website_Accessibility@mckinsey.com, Making collaboration across functions a reality. Financial services have been at the forefront of digital adoption, and the banking and insurance sector is likely to see significantly shifting demand for skills through 2030. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. As we look ahead, leaders can take the following steps to capitalize on the potential of automation. We define “large companies” as those with annual revenues of $1 billion or more, according to respondents. The survey, conducted just before the COVID-19 pan­demic, suggests that while more companies are pursuing automation, there hasn’t been a significant change in the share achieving success over the But at smaller companies, unlike large ones, another factor—taking a tactical approach and setting tangible objectives for automation initiatives—is also significant. 5 While the demand for technological skills has been growing since 2002, it will gather pace in the 2016 to 2030 period. In the survey, automation did not include the use of automation that was custom built (for example, Excel macros and custom scripts) for organizations. Please click "Accept" to help us improve its usefulness with additional cookies. This finding holds true across almost all sectors, with the notable exception of manufacturing, in which skill mismatches are expected to be largest in production and manufacturing operations. 4 The need for finely tuned social and emotional skills will rapidly grow. Learn about In 2018, 56 percent of respondents said their efforts were successful or very successful at meeting their targets. However, demand for skills such as inspecting and monitoring patient vitals and medical equipment will stagnate, despite the overall growth in healthcare, as machines take over more routine tasks. Forty-six percent of respondents who report automation success at larger companies say their leaders understand very well or completely the total cost of ownership for their automation efforts. but those that have done so are seeing a higher success rate than larger organizations. tab. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. 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