The AI-Powered Upskilling Revolution: Preparing for the New Future of Work

Bridging Today's Skills Gap While Future-Proofing Your Workforce

Aug 22, 2023

Overview

As companies fight within a tight job market and automation transforms roles across industries, the need for re-training & upskilling has become imperative. Employers surveyed by the World Economic Forum estimate that more than 54% of all employees will require significant reskilling or upskilling. Simultaneously, it is now easier and more cost effective than ever to re-train or up-level potential employees as new skills are needed. This shift puts significant pressure on companies to prepare employees for the jobs of tomorrow while simultaneously helping the current workforce upskill for the jobs of today.

The process of learning is no longer a straightforward development with a single diploma, but rather a consistent, iterative process that adapts to a shifting environment. Powered by Generative AI, a new wave of solutions will soon arise in this sector and are poised to capitalize on a number of large opportunities in the workforce of the future.

Themes

A Tight Job Market: Less Talent Available

COVID has enabled the so-called “Great Reshuffle” with millions of employees leaving their jobs in search of greater flexibility and fulfillment. This has led to high vacancy rates and an inability of companies to adequately fill their employment needs to meet demand. Upskilling and reskilling better enables companies to quickly fill vacancies at a lower cost - particularly those in hard to hire roles.

A Changing Job Market: Broader Acceptance of Certification

According to LinkedIn, the skill sets for jobs have changed by 25% since 2015 and are poised to double by 2027. Furthermore, the share of global English-language job postings mentioning GPT or ChatGPT increased 21x since November 2022. Skills-first hiring is gaining traction as companies look to expand their potential employee pool. A recent report from Harvard Business Review states that as the job market tightens, employers are now opting to remove degree requirements and instead hire based on demonstrated skills.

Learning in the Age of Artificial Intelligence: Augmenting Human Strengths

In an era of exponential technological change driven by AI, upskilling has become more critical than ever. As automation transforms roles across industries, learning new skills is essential for workers to stay ahead of disruptive shifts and harness emerging technologies to become more productive. Whether it’s salespeople leveraging AI to enhance lead generation, marketers skillfully deploying chatbots for customer engagement, or supply chain analysts using predictive algorithms to forecast demand, upskilling allows employees to work with cutting edge AI tools to drive enhanced performance. As technology progresses ever more rapidly, continuous learning is required to build capabilities that augment human strengths. Focused upskilling empowers people to work in harmony with transformative AI, supercharging efficiency and unlocking new possibilities.

Increased Importance of Learning & Development: Cost-Effective Alternative to Hiring

With the recent wave of resignations post-COVID, learning and development has increased in stature within large organizations. Recent reports indicate 79% of L&D professionals state that it is less expensive to reskill an employee than hire someone new and 72% of executives ranked the ability to reskill as their most or second-most important factor to avoid future business disruptions. Within the next few years, McKinsey has found that 87%+ of companies anticipate having skills gaps and given that the SHRM estimates onboarding & training new employees at over $4,000, corporations will need to focus on learning & development to enhance their bottom line and enable their organizations.

Renewed Focus on DE&I: Increased Need for Diverse Voices & Representation

As executives seek to address the lack of representation for numerous groups, they are searching for ways to bring diverse candidates into their pipeline. Upskilling and re-skilling offer a way for non-traditional candidates to acquire and master skills that they otherwise would not have access to. This large-scale shift in access will hopefully enable previously overlooked workers to apply for jobs based on skills, not on degree requirements.

Hybrid Work: Ability to Operate Remotely

The COVID pandemic changed the way America has had to work. Moving to a digital first offering has altered the way businesses operate and serve their consumers, requiring new skills from their employees to enable such offerings. After two years of operating in such an environment, companies have been able to learn what essential skills and tools employees need to be productive. As an example, according to LinkedIn’s recent Future of Work report, 92% of US executives now agree that people skills are more important than ever.

Ease of Training: More Vertical Solutions

The rapid advancement of AI is making enterprise content creation exponentially more efficient. This is freeing up more resources for education providers to develop tailored learning experiences that align to specific vocations. Rather than taking a generalized approach, firms can now leverage AI efficiencies to build training tailored to niche professional categories like nursing, accounting, software engineering and more. Equipping learners with skills specialized to their exact roles and industries drives greater engagement, outcomes and ROI. AI is empowering a shift from broad e-learning to hyper-targeted training aligned to specialized vocational needs and accelerating expertise development.

Future Needs

Numerous major initiatives have and will be launched including the “Reskilling Revolution” by the World Economic Forum, which seeks to drive worldwide collaboration to provide better skills to over 1 billion people. From an innovation perspective, however, there are a few key areas of focus that software can help fix this issue:

Skill Identification & Talent Mapping: The first step of closing the skills gap is identifying the skills your organization has and measuring them against the ones you need. New software & AI tools have enabled this to happen at a much more granular level and on a quicker timeline. These tools can take unstructured data and enable HR executives to have a much better understanding of their organization.
Diversification of Learning Experiences: Traditionally, L&D departments have used boring videos that are hard to follow and often times lacking in thorough content. New methods of teaching allow for Netflix quality content, more adaptive eLearning, and variety of other methods that have more proven success.
Vertical Specific Programs: As the skills gaps become more acute in specific industries and roles, there is a clear need arising for tailored up-skilling platforms that align training to the nuanced needs of different vocations. Rather than taking a one-size-fits-all approach, the next generation of up-skilling solutions will leverage AI and advanced personalization to provide targeted learning paths specialized for high-demand fields like nursing, software engineering, supply chain operations and more.
Focus on the Holistic Self: Conventional L&D trainings focus on technical skills that are tangible and easier to teach. Recent developments in soft-skill teaching and mental well-being allow for companies to enable holistic skill development and teach competencies that are crucial for the new digital age.
Measurement: Corporations have often found it tough to measure the success of various L&D initiatives. However, with more holistic assessments and smarter AI technology, executives can now more easily identify the direct effect on skill development and their bottom line from training sessions.
Real-Time & Dynamic Monitoring: Developments in Cloud computing and workforce data allows for real-time monitoring of skills. This ability, combined with AI modeling, allows dynamic, forward-looking decisions to be made about future skill development.

Final Thoughts

Skills are becoming the currency of the new job market. The gap stands to grow drastically as the established trends continue, leaving an enormous opportunity for disruption. A new wave of AI-based software solutions will capitalize on this shift and help lay the groundwork for the economy of the future.

The material presented on Glenn Borok’s website and blog are my opinions only and are provided for informational purposes and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Any analysis or discussion of investments, sectors or the market generally are based on current information, including from public sources, that I consider reliable, but I do not represent that any research or the information provided is accurate or complete, and it should not be relied on as such. My views and opinions expressed in any website content are current at the time of publication and are subject to change. Past performance is not indicative of future results.

References

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