The Changing Jobs Market Over the Next Five Years

The Changing Jobs Market Over the Next Five Years

The Future of Jobs report by WEF 2023 provides insights into the changing nature of work and the impact of emerging technologies on the job market. It highlights trends, opportunities, and challenges individuals and organisations face. The report covers topics such as adopting automation and artificial intelligence, the skills required for future jobs, and the potential impact on employment and workforce dynamics.

The report emphasises the need for reskilling and upskilling to adapt to the evolving job market. This includes a discussion of soft skills, critical thinking, creativity, and emotional intelligence as complementary skills to technical expertise. The report also addresses concerns related to job displacement and the potential need for policies to support workers in transitioning to new roles.

Here we look in some detail at two priority areas covered by the report:

  • Skills outlook including:
    • Expected disruptions to skills
    • Reskilling and upskilling priorities in the next five years
  • Workforce strategies including:
    • Barriers to Transformation and workforce strategies
    • Talent availability and retention
    • Talent development

Changing winds disrupt the jobs market

Over recent years and globally, workers have experienced tremendous changes in their jobs and workplaces. Most people were impacted to some degree by lockdowns; eventual returns to work were tentative and partial; many industries failed with significant job losses. Close on its heels came the war in Ukraine with its concomitant disruptions, soaring energy prices and devastating inflation.

All this occurred in the wake of ongoing technological evolution, including the rollout of artificial intelligence (AI) and accelerating demands for a greener global economy.

While each change is a significant challenge, when they happen simultaneously, the degree of disruption is unprecedented, at least since the second world war. Uncertainty about the future is widespread, with many commentators and influencers expressing existential fears and concerns about the forward march of technology and AI.

According to the WEF, 23% of jobs will change significantly over the next five years. Many jobs (69 million) will be created, and many more (83 million) will be destroyed. That’s a global loss of 29% of the current workforce.

However, it’s not all doom and gloom. Green technologies and emerging markets will likely create high demand, translating into economic growth and new employment opportunities. The WEF estimates that around one million new sustainable engineering jobs will be created.

Jobs growth areas

The two sectors likely to see the highest growth in jobs are education and agriculture, with increases of 3 million and 4 million, respectively. The main drivers of this growth are demographics and new technologies. Past supply chain disruptions have affected how supply chain priorities are viewed, drifting away from supply chain efficiency to supply chain resilience. This shift in attitude is likely to create job growth, particularly for Asian and Middle Eastern economies.

The impact of technology and AI on jobs

Technological change, particularly AI,  will create considerable changes in the job market. While the exact consequences may vary across industries and job roles, AI is generally likely to impact the following areas.

  • Automation: AI will automate tasks that are repetitive, rules-based, and routine in nature. This will lead to the displacement of specific jobs, particularly those involving manual or repetitive tasks. Jobs in manufacturing, customer service, data entry, and transportation may be affected.
  • Job Creation: While automation will eliminate some jobs, it can also create new job opportunities. AI technologies require development, implementation, and maintenance, which can lead to the emergence of new roles in areas such as AI programming, data analysis, machine learning engineering, and AI ethics.
  • Augmentation: AI can augment human capabilities and improve productivity in various domains. It can assist professionals by automating specific tasks, providing data-driven insights, and enabling more informed decision-making. This can lead to increased efficiency and productivity in roles across industries.
  • Skill Shift: The demand for different skills may change as AI automates specific tasks. There may be a growing need for skills such as data analysis, programming, critical thinking, creativity, problem-solving, and emotional intelligence. Jobs that require these skills and involve human interaction may be more resilient to automation.
  • Human-AI Collaboration: The future of work is expected to involve increased collaboration between humans and AI systems. Workers may need to adapt to working alongside AI tools and systems, leveraging their strengths while complementing AI with uniquely human skills such as empathy, creativity, and complex problem-solving.
  • Socioeconomic Impact: The widespread adoption of AI may have socioeconomic implications. It could lead to income disparities, as individuals with skills in high-demand AI-related fields may have more opportunities and higher wages. There may be a need for policies and initiatives to address potential job displacement, retraining, and income inequality.

 

While AI will undoubtedly transform the job market, its impact is not uniformly negative or positive. Jobs are expected to evolve rather than disappear entirely, with new opportunities arising alongside automation. The successful integration of AI into the workforce will depend on effective reskilling and upskilling efforts, supportive policies, and proactive collaboration between various stakeholders.

Supply chain localisation

While supply chains will continue to be disrupted by advancing technologies and AI, a significant impact of recent supply chain disruption is the urgent need to localise supply chains in response to the realisation that supply-chain resilience out-trumps supply chain efficiency.

Supply chain localisation, which refers to the shift from globalised supply chains to more localised or regionalised ones, can significantly impact jobs positively and negatively.

Positive Impact on Jobs:

  • Job Creation: Localising supply chains often create new jobs within the region or country.
  • Reshoring and Job Repatriation: Supply chain localisation may incentivise companies to bring back manufacturing operations from overseas, a process known as reshoring.
  • Economic Multiplier Effect: A localised supply chain has the potential to create a ripple effect throughout the economy.

Negative Impact on Jobs:

  • Job Displacement: While supply chain localisation can create new jobs, it can also lead to job displacement, particularly in regions heavily reliant on imported goods or outsourcing.
  • Skill Mismatch: Localisation efforts often require a different skill set than globalised supply chains. Workers with specialised skills for global manufacturing processes may find it challenging to transition to localised supply chain roles.
  • Increased Costs and Competitiveness: Localising supply chains can potentially increase production costs, including labour, raw materials, and logistics.

Reskilling and upskilling

It is clear from the above that vast amounts of reskilling will be necessary. The WEF estimates that 44% of skills will need to change. There will be growing demands for skills such as analytical and creative thinking. The WEF also sites a growing demand for skills involving technological literacy, curiosity and lifelong learning, resilience and flexibility, systems thinking and AI and data analysis. This goes alongside a decreasing need for global citizenship skills, manual and sensory dexterity, endurance and precision.

Preparing for the future workplace

It is clear from the WEF report that all stakeholders would be advised to prepare for the future jobs market. In the technology-dominated greener deglobalising new world that will likely emerge in the coming years, local skills development will be the highest priority. This finding impacts multiple areas:

  • Soft,  interpersonal and general skills will become as important as technical skills.
  • For workers in declining fields, reskilling should be a top priority. For those in growth sectors, upskilling and constant learning are needed.
  • Governments have a significant role in navigating this new territory and providing needed resources and guidance.

The role of employers

Employers play a crucial role in reskilling and upskilling their workforce. In this rapidly evolving job market, where technological advancements and changing skill requirements are common, employers are responsible for investing in their employees’ development and ensuring they have the necessary skills to meet emerging challenges. Some critical aspects of the employer’s role include:

  • Identifying Skill Gaps: Employers need to assess their workforce’s current skill sets and identify any gaps or areas that require development.
  • Training and Development Programs: Employers should design and implement comprehensive training and development programs to address identified skill gaps.
  • Collaboration with Employees: Employers should actively involve employees in identifying their development needs and career goals.
  • Supporting Further Education: Employers can help their employees pursue further education or advanced degrees by providing financial assistance, flexible scheduling, or study leave.
  • Encouraging Learning Culture: Employers should promote a learning culture within the organisation. This involves creating an environment that values curiosity, promotes knowledge sharing, and provides opportunities for employees to learn from each other.
  • Embracing Technology: Employers should leverage technology to facilitate reskilling and upskilling efforts.
  • Monitoring and Evaluation: Employers need to monitor the effectiveness of their reskilling and upskilling initiatives.

A mismatch between needs and upskilling strategies

There appears to be a mismatch between the skills companies claim to be of increasing importance and those covered by corporate upskilling strategies. The highest-rated skills are AI, big data, leadership and social influence, with companies planning to invest 9% of their reskilling budget in these. However, their most highly ranked skill is creative thinking, a full 12 places higher than AI, which will receive a significantly small allocation of the reskilling budget.

Other vital skills emphasised by business and ranking higher than AI include design and user experience, environmental stewardship, marketing and media and networks and cybersecurity.

Developing current workforce

While businesses appear confident in developing their current workforce, they are less optimistic about finding new talent in the next five years. Thus, the main barriers to industry transformation are the ensuing skills gap and the scarcity of new talent. Nearly half of the companies consider better talent progression and promotion crucial in increasing talent availability and more critical than increasing wages, reskilling and upskilling.

Finally

Over the next five years, the jobs market is poised to see unprecedented disruption, at least according to the WEF’s report, which reflects current business thinking. While predicting the future has always been dangerous, the shift in world politics, advancing environmental challenges, and the ruthless advance of technology and AI could have an unprecedented impact. Hiding heads in the sand is an unreasonable response – employers, individuals, governments and other stakeholders must prepare for what lies ahead. Taking the right actions now could turn these current challenges into exciting opportunities.

 

 

Latest Post

Insights To Your Inbox

Sign Up to Receive the latest news and leadership insights.

Sign up to receive the latest news and leadership insights

Sign up to receive the latest news and leadership insights