James Johns, Head of Corporate Affairs, UK, Workday
Nations across the globe are feeling a squeeze on skills. One recent McKinsey study found that nine in ten executives or managers are having trouble hiring people with the talent they need – or that they expect to have that problem in the next five years.
Paradoxically, these shortages are becoming more acute despite the rapid rise in degree-qualified candidates in most developed nations. In the UK, student numbers have approximately doubled since the 1990s – and similar trends are seen across the OECD38 countries.[1] Meanwhile, a study from Dell predicts that 85% of the jobs which will exist in 2030 are yet to be invented.
With such shifts already taking place – and more on the horizon – it’s clear that ‘jobs for life’ are a thing of the past. What’s more, learning should no longer be limited to school and university. Instead, it must continue throughout our careers in a way that’s integrated into our work and which provides us with the evolving skills we need for a flourishing career and a strong economy.
Yet today we’re not nurturing a skills-based workforce in this way. From limiting business growth to driving inflation and stunting individual careers, the ramifications of the skills shortage are far reaching. Stakeholders across business, academia and government need new strategies for bridging the gap.
It’s positive to see the new Labour government prioritising the skills gap, with the introduction of the Skills England bill set to unite businesses, skills providers, unions, Mayoral Combined Authorities and national government to deliver a highly trained workforce. Initiatives such as this, alongside the strategic use of new technologies like AI, will be crucial in creating the skilled workforce the future needs.
Assessing the new government’s skills strategy
Announced in the King’s Speech, the Skills England Bill aims to “provide learners with the skills required to thrive in life, businesses with the trained workforce they need to succeed and local areas with access to the right skills to spur economic growth.” This will entail delivering skills ranging from the essential to the highly technical.
At the heart of the bill is an ambition to map the current skills landscape across England, identify critical gaps and work with stakeholders across the public and private sectors to address them. With research showing that the number of skills shortage vacancies doubled between 2017 and 2022 to a total of 531,200 this will be no mean feat. It will require the tracking, analysis and management of vast amounts of data. Such a process will also need to be ongoing – reacting to new demands and shifts in the workforce in real time to continuously address new skill requirements as the needs of the economy evolve.
Supporting the UK’s shift to a skills-based workforce cannot though solely be left to the Government, vital though their leadership will be. Employers also have a critical role to play. In both cases, AI and other innovative technologies can help. These tools are uniquely suited to the analysis of the significant pools of data that’s necessary for tackling a challenge as complex as nationwide skills shortages. What’s more, they can do so efficiently, without the need for costly investment in more manual work.
Applying AI to skills shortages
For more than a decade, Workday has been at the forefront of applying AI to human capital management (HCM). Our AI innovations have been built on an unprecedentedly clean and structured dataset informed by billions of transactions and tens of millions of users.
At the heart of our approach to AI in HCM is Workday Skills Cloud, which can analyse and map existing skills and identify key gaps. It does so by drawing on data sources that contain more than 200 million identified skills while using large language models to maintain a definitive taxonomy of skills in 16 different languages. From there, it provides a range of features – from recommended learning to bolster skills, toanalyticswhich allow employers to identify and tackle unknown skill gaps before they become critical. Already used by a quarter of Fortune 500 companies, it provides a clear example of how large organisations with complex and diverse workforces can effectively use technology to tackle skill gaps at scale. When employers understand skills, they can deploy the right people to the right projects, and tap into or build new talent pools, improving both agility and diversity. When employees understand skills, they can make more informed decisions about their work, better plan their career progression and access higher-paying, more fulfilling roles. As consulting firm Booz Allen Hamilton has stated, “Artificial Intelligence (AI) can help democratize access to opportunities […] Al can yield a greater, more diverse talent pool than old-fashioned networks.”
One business that’s harnessed the benefits of Skills Cloud is the aerospace and power leader Rolls-Royce, which first deployed the tool in 2020. The business was responding to reports from employees that they felt careers were siloed and that skills weren’t being transferred or nurtured effectively between departments.
During its rollout, Skills Cloud quickly took off. During the pilot alone, 60% of people completed a profile and a third of managers raised a ‘gig’ – a skills-based request for internal candidates for specific jobs or tasks. The first rollout ended with 4,000 people, and since then the business has continued to scale quickly, with 10,000 people onboard at the last count.
Thousands of Rolls Royce’s employees have been using the platform to develop skills and discover new opportunities. It’s not only helping the business to efficiently target skills where needed, but also enabling it to paint a clear picture of the overall skills (and shortages) across the organisation. As a result, leaders are able to make informed strategic decisions on workforce planning, while individual employees can cultivate and apply skills in a way that bolsters career development and satisfaction.
Moving to a skills-based future
The significant scale of Rolls-Royce’s deployment reveals how technology can aid the shift to a skills-based future.
New technology can rapidly map skills across different departments or even organisations, offering a bird’s eye view of gaps. It can empower individuals and teams to untap and nurture existing skills and direct human capital within an organisation to where it will have the greatest impact.
It’s through deployment of intelligent technology like this, combined with political will, that we’ll build a workforce that continuously nurtures skills and can meet the challenges of both today and tomorrow.
[1] Organisation for Economic Co-operation and Development, Education at a Glance 2022: OECD Indicators (Paris: OECD, 2022).
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