Human-centric skills development

The world economy could lose $5 trillion from inadequate training of workers, a BCG report warns

Governments and employers need to look for new ways to address the growing skills crisis and boost economies, according to a new report by the global management consultancy Boston Consulting Group (BCG), WorldSkills Russia and the energy company Rosatom.

Concerns are increasing around the world about how to address the dramatic shift in employment caused by new technologies and business models, as well as rapid and continuing urbanisation, said the report, called “Mission Talent — Mass Uniqueness: A Global Challenge for One Billion Workers”.

The skills mismatch is already affecting more than 50% of employers. By 2030, 1.4 billion workers will not have the right skills for their jobs, said the report, which was presented at the WorldSkills Conference this week in Kazan, Russia.

A third of all existing professions are expected to change by 2035 with the expansion of information technology, artificial intelligence and robots. The increasing gap between the skills the current workforce has and the skills businesses need represents a loss of 6% of world GDP, or US$5 trillion, every year, according to a recent International Monetary Fund study.

The BCG research assessed the conditions affecting the skills mismatch in 30 countries including the United States, India, Singapore and South Africa. Employment systems that were more “human-centric” were found to show both a lower level of skills mismatch and higher productivity.

For example, the United States has a highly human-centric system and thus has a skills mismatch that affects less than a third of the workforce. It also has one of the highest levels of productivity of the countries assessed.

Meanwhile South Africa, which was classified as a labour workforce exporter, had a skills mismatch of over 50% and the lowest productivity.

The report found that adopting a more human-centric approach to human capital development could accelerate GDP growth in a given country by between 0.5% and 2%. Achieving this improvement involves addressing three priorities: workforce capabilities, motivation and access to training.

To improve workforce capabilities, the authors of the study recommended developing educational and training programmes in co-operation with employers, and improving teacher training and personalised teaching aids. To address employee motivation, the best strategic solutions are promoting the benefits of personal development and offering a system of incentives.

To encourage access to opportunities, the recommended approaches include developing domestic demand, increasing the talent available locally, and maintaining adequate supply and demand balance in the labour market.

“Mass standardisation, one education and one profession for life no longer works in today’s world, neither for the employees themselves nor for the economy and the country as a whole,” said Vladislav Boutenko, managing director, senior partner and chairman of BCG Russia.

“The old system still exists by inertia, but the conflict with the real demands of society and business is obvious and will only worsen if nothing is done.

“We need to move to a new concept of human-centricity, which looks at the workforce not just as a resource, but at individuals with their own needs, aspirations, capabilities and potential. Countries that focus on human-centric principles demonstrate much higher labour productivity rates than those where the skills mismatch has reached its peak.”

But employees too must do their part to ensure that they will remain valued contributors, said Robert Urazov, director-general of WorldSkills Russia.

“Until a person takes responsibility for their own professional development in life, the support tools that are given to them won’t work for them,” he said.

“You can put all sorts of opportunities in front of them, at colleges, universities, with apprenticeships and so on, but as long as a person believes that they do not need this, or thinks that this isn’t their responsibility, then the support tools available in the market won’t work. Thus, for institutional partners and market players, the key task is to create tools of ‘mass uniqueness.’”

‘‘

Mass standardisation, one education and one profession for life no longer works in today’s world.

VLADISLAV BOUTENKO BCG Russia