In the News, Report

Reskilling and The Future of Work in US – $24,800 per displaced worker, with $4.7 billion from the private sector to reskill 25% of all workers in disrupted jobs

As the Fourth Industrial Revolution impacts skills, tasks and jobs, there is growing concern that both job displacement and talent shortages will impact business dynamism and societal cohesion. A proactive and strategic effort is needed on the part of all relevant stakeholders to manage reskilling and upskilling to mitigate against both job losses and talent shortages.

Through the Preparing for the Future of Work project, the World Economic Forum provides a platform for designing and implementing intra-industry collaboration on the future of work, working closely with the public sector, unions and educators. The output of the project’s first phase of work, Towards a Reskilling Revolution: A Future of Jobs for All, highlighted an innovative method to identify viable and desirable job transition pathways for disrupted workers. This second report, Towards a Reskilling Revolution: Industry-Led Action for the Future of Work extends our previous research to assess the business case for reskilling and establish its magnitude for different stakeholders. It also outlines a roadmap for selected industries to address specific challenges and opportunities related to the transformation of their workforce.

Key Findings

• The World Economic Forum’s Preparing for the Future of Work project seeks to provide a platform for collaborative action among industry and other stakeholders to develop futureproof workforce strategies and support at-risk workers with reskilling and upskilling. A key challenge in this regard is that there is currently very limited reliable information about the business case and the return on investment of such efforts. This report aims to demonstrate the existence of a quantifiable business case for a reskilling revolution led by business and government.
• Drawing from average reskilling costs, we find that the 1.37 million workers who are projected to be displaced fully out of their roles in the next decade according to the US Bureau of Labor Statistics, may be reskilled to new viable (similar skillset) and desirable (higher wages) growing roles at a cost of US$34 billion. On average this would entail US$24,800 per displaced worker.
• The report contains an innovative quantitative cost- benefit analysis for companies’ considerations on whether to reskill current workers or fire and hire different workers. If a company chooses to reskill, the costs incurred include the costs of reskilling, wages and lost productivity while the worker retrains; benefits include post-training gains in productivity. If a company chooses to fire current workers and hire new ones, costs include severance, hiring and wages and benefits include gains in productivity. The report shows that, in the US alone, with an overall investment of US$4.7 billion, the private sector could reskill 25% of all workers in disrupted jobs with a positive cost- benefit balance. This means that, even without taking into account any further qualitative factors or the significant indirect societal benefits of reskilling, for 25% of at-risk employees, it would be in the financial interest of a company to take on their reskilling.
• We find that this balance sheet could be significantly extended further through public-private collaboration— such as a pooling of resources or combining of similar reskilling efforts, leading to economies of scale and lowering reskilling costs and times, significantly impacting the number of workers who could be reskilled with a positive cost-benefit balance. For example, if industry-led collaboration could reduce reskilling costs and times by 30%, nearly half of the disrupted workforce could be reskilled by employers with a positive cost-benefit balance.
• When it comes to the government perspective, we also find significant evidence of a quantifiable return in addition to broader societal good. For example, with the set of assumptions applied and with an investment of US$19.9 billion, the US government could reskill 77% of workers expected to be displaced by technology into growing jobs while generating a positive return in the form of taxes and lower welfare payments.
• The report also outlines recommendations and innovative case studies based on more than 60 qualitative in-depth interviews and consultations with industry practitioners and experts participating in the Forum’s Preparing for the Future of Work Industry Task Forces. It presents industry-specific adaptation roadmaps to prepare for the future of work, including concrete information related to transition opportunities for displaced workers and options for filling key strategic skills gaps for companies.
• Several insights and solutions outlined in this report will be taken up by the Forum’s Preparing for the Future of Work project in the form of a commitment framework and a call to action to industries that seek to pilot collaborative reskilling and upskilling efforts to prepare workers and their organizations for the future of work.

Chosen excerpts by Job Market Monitor. Read the whole story at Towards a Reskilling Revolution: Industry-Led Action for the Future of Work | World Economic Forum

Related Posts

Skills Gap – 3 Approaches for funding reskilling and upskilling

The skills gap is widening as the battle for talent intensifies It is becoming harder and harder to find talent with key skills, while redundancies and severance expenses are mounting. Investment in internal training can help tackle these issues, but companies often do not prioritise such initiatives owing to cost, time, the unclear return on … Continue reading

Future of Work – The costs of reskilling and upskilling for occupational transitions

This work contributes to the “Jobs and Skills” module of the Going Digital horizontal project and to the Skills Outlook 2019 on Skills and Digitalisation. It results from the cooperation between the Directorate for Education and Skills (EDU) and the Directorate for Science, Technology and Innovation (STI). It proposes an experimental methodology and first time … Continue reading

Low Skills in Europe – The Upskilling pathways

In 2017, 15.7% of low-qualified young Europeans aged 15 to 29 were not in education, employment or training (NEET), compared to 9.6% of their better educated peers. In the same year, the unemployment rate of low-qualified adults of working age (25 to 64) stood at 13.9% in the EU-28 while that of their highly qualified … Continue reading

Upskilling for the Future – How SAP does it

SAP (a global software company based in Walldorf, Germany) digital-business-services (DBS) division, one of the main divisions in the company, with around 20,000 employees, began implementing a comprehensive workforce skills upgrade in 2017, to support shifts in its product portfolio toward more digital innovation and cloud products. The upgrade is a multiyear “learning strategy,” which … Continue reading

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Jobs – Offres d’emploi – US & Canada (Eng. & Fr.)

The Most Popular Job Search Tools

Even More Objectives Statements to customize

Cover Letters – Tools, Tips and Free Cover Letter Templates for Microsoft Office

Follow Job Market Monitor on WordPress.com

Enter your email address to follow this blog and receive notifications of new posts by email.

Follow Job Market Monitor via Twitter

Categories

Archives

%d bloggers like this: