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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

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