Future of Work: 4 Ways to Empower our Workforce [2020]

The nature of work and jobs are changing rapidly:

In about 60% of occupations, at least one third of the constituent activities could be automated (source: McKinsey).

So whether you are a business leader, a HR professional, an innovator or a startup founder, you are probably wondering:

How can I better adjust to and be prepared for these changes?

In this article, you will learn about 3 key challenges in the future of work and 4 technology-enabled areas to empower your workforce. 

Let’s dive in…

Future of Work: 4 Ways to Empower our Workforce

Table of Contents

Introduction

The change of the nature of work has started long before the 2020 COVID-19 pandemic.

This can be seen from the reports on the future of work and jobs published in recent years by the United Nations’ agency International Labor Organization (ILO), The World Bank, World Economic Forum (WEF), the Organization for Economic Co-operation and Development (OECD) and other non-profit organizations such as the Council on Foreign Relations (CFR).

An example of the change is the rise of the gig economy across the globe.

Flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees. 

Let’s take a look at the numbers. 

According to data aggregated by gigworker.com, In 1995, 10% of the US workforce worked in the gig economy. This number increased to 34% in 2017. It is projected that 60% of the US workforce will become independent professionals by 2027.

For OECD countries, 1 in 7 workers was self-employed and 1 in 9 employees was on a temporary contract in 2019.

As a result, employment is being redefined by lawmakers and governments to try to protect the rights of those who have a job or engage in work that is not full-time. For example, since January 1st, 2020, gig workers in California have been treated as employees instead of independent contractors under the AB-5 state law. 

The gig nature and sharing characteristics have also inspired traditional full-time job employers and technology innovators to create new models and solutions for working across teams, organizations, and industries.

This includes task-specialized work with in-house talents and/or external contractors, remote staffing / remote working, and new human-machine frontier beyond communicating and interacting into reasoning, decision-making, administering, and receiving job-related information tasks.

What is Workforce?

According to the U.S. Bureau of Labor Statistics, “Workforce”, or otherwise known as “labor force”, is made up of the employed and the unemployed people except for those who have no job and are not looking for one.

What is Human Capital?

It is almost impossible to discuss the workforce without talking about human capital. “Human capital” consists of the knowledge, skills, and health that people accumulate throughout their lives. Investing in people through nutrition, health care, quality education, jobs and skills helps develop human capital. 

Whether it is at the societal, municipal, communal, organizational, or individual level, the goal of empowering the workforce is to increase human capital. Economic growth and development in a society depend on both human capital and physical capital.

Productivity improvement and revenue increase in an organization or a company heavily rely on human capital. Human capital increase can help individuals to unlock potentials for higher human capabilities.

To help you gain insights, let’s focus on the non-health related components of human capital (education, training, jobs and skills) to define challenges and seek opportunities to empower the workforce.

Health and wellness related components of human capital are equally important and merit discussion.

Three Challenges the Workforce is Facing

Challenge 1: Skills Mismatch Inhibits Workforce Potential

Skills mismatch is a discrepancy between the skills that are sought by employers and the skills that are possessed by individuals including job seekers and employees, according to Brookings and ILO.

1-1.3 billion people in the world are experiencing skills mismatch (source).

For individuals, skills mismatch takes one of the 3 following forms:

  • Skills gap
  • Skills obsolescence
  • Over/under skilling

For employers, skills mismatch leads to skills shortages.

The Harm of Skills Mismatch Occurs at Multiple Levels

  • Missed opportunities
  • Uncertain income and employment prospects
  • Limited career development for individuals
  • Hidden productivity tax risk for employers
  • Tension for the society
  • Uneven economic growth and global divisions of labor
  • Decrease of global productivity growth

3 Major Problems Behind Skills Mismatch

First, the lack of accessible educational opportunities that are clearly and transparently linked to the changing demands of the jobs and work is a big obstacle to improving work outcomes for the workforce, according to CFR.

It remains a challenge for governments, educational institutions, and companies to design, implement and manage up-to-date content and evolving curriculum for the workforce.

Second, the job-seeking and hiring process is largely text keyword based and has inherent biases due to search and filtering algorithms. 

Third, once the workforce enters employment, the existing dominating full-time fixed-role model discourages optimization of skill reallocation among employees for task-oriented work.

While emails, instant messengers, and co-working chat apps enable cross-team communications, these communication channels can’t help deciding task assignment and project completion based on the individual employee’s skills.

Comparing Top 10 Skills Demand, 2018 vs. 2022

Skills required for most jobs will have shifted significantly by 2022.


Source: World Economic Forum.

Challenge 2: Skills Outdatedness due to New Technology Adoption

We are in the fourth industrial revolution (Industry 4.0). 

Technological advance and adoption occur faster than ever. Among different technologies, five have been identified by the WEF as the drivers to dominate business growth in the next two years: ubiquitous high-speed mobile internet (such as the 5G mobile network), artificial intelligence (AI), big data analytics, cloud computing, and green energy.

54% of all employees will require significant reskilling and upskilling by 2022.

It is estimated that the skills required to perform most jobs will have shifted significantly by 2022.

However, out of ten adults from the 37 OECD countries, mostly developed countries, lack basic information and communications technology (ICT) skills or have no computer experience.

It is safe to assume that the number will be much lower when developing countries are included. In the absence of mitigating policies and supportive strategies, these technologies are likely to exacerbate inequality and leave most of the workforce behind. according to CFR.

Projected (2022) Strategies to Address Shifting Skills Needs, By Proportion of Companies (%)

A quarter of the employers are less likely to retain existing employees and two thirds expect employees to resklll or upskill themselves. Graph source: World Economic Forum.

Challenge 3: Companies and Organizations Fall Behind in Reskilling or Upskilling Employees

Given the widened skills gap that comes with technological advancement and adoption, companies generally have three strategies: 

  • Hire new full-time staff who already have the skills relevant to new technologies
  • Automate the work tasks completely
  • Retrain existing employees

A 2018 WEF report found that nearly 25% of companies are undecided or unlikely to pursue the retraining of existing employees, and two-thirds expect workers to adapt and pick up skills themselves in the course of their changing jobs. 

Over half the employers said they prioritize reskilling and upskilling efforts on employees who are currently performing high-value and frontline roles using relevant new technologies, and 41% of employers would focus their reskilling provision on high-performing employees. 

However, only 33% stated that they would prioritize at-risk employees in roles expected to be most disrupted by technology adoption. 

The challenge is not just the inequality where the workers most in need of reskilling and upskilling are least likely to receive training. Companies and organizations also lack strategies and tools to reskill or upskill employees. 

The centre of all these challenges is the people. With a human-centric emphasis in mind, there are clear opportunities to tackle these challenges.

Four Ways to Empower the Workforce

Workforce empowerment extends employee empowerment to cover the workforce that are job seekers, the under-employed and a part of the unemployed.

Empowerment provides the workforce with the resources, opportunity, motivation and authority to own their careers and own their work.

Here are four ways to empower the workforce.

1. Align and Pre-Qualify Job Seekers

From job seekers’ point of view, there are a lot of ways to find new jobs over the Internet: 

Career page of an organization’s website, job boards, job search engines, and social media. 

A 2015 Pew Research survey showed that researching and applying for jobs online was universal among the job seekers in the US. A 2018 survey by CareerBuilder and SilkRoad showed that 70% of survey takers used mobile phones for job seeking. 

Networking and referral are the most effective ways to landing a new job. Up to 85% of people found their present job through networking (source: Linkedin) and job seekers rank social and professional networks as the most useful job search resource (source: Careerarc). 

Employee referrals only make up about 7% of potential candidates, but these referrals lead to a conversation rate at nearly 40%, according to Jobvite

The effectiveness of networking and being referred to in landing a job is because they enable early alignment and even pre-qualification for jobs. 

Technologies and Tools Can Enable Automated Alignment and Pre-qualification to Help Online Job Seekers During the Application Process

Employee reviews and characteristics of previously hired employees, or even general trends of job demand by geographic locations, industries, and required skills may be used to provide insights for job seekers.

Here is an example:

Glassdoor launched two tools i.e. Collections and Company Compare in January 2020, to help job seekers to stay organized and compare two potential employers side by side with employee reviews.

A more advanced scenario could be that, with job seekers’ permission, their own online activities, social and professional networks information may be used by AI algorithms to automate job alignment. 

Another scenario could be using natural language processing (NLP) beyond keyword frequency counting on resumes, job descriptions, employer websites, and employer news to help with alignment and pre-qualification.

Talent Acquisition Optimization Would Help Employers Find the Most Suitable Talent in a Time and Resource Efficient Way

As part of a broader optimization of human capital management (discussed separately below), talent acquisition optimization may be done in a number of ways. 

First, data analytics of existing employees for similar roles or in the hiring team may help describe the characteristics of the desired new hire. 

Second, natural language generation may help with generating the best job description, while NLP of submitted resumes, job descriptions, and websites could help identify the shortlisted candidates. 

Third, signal and image processing and AI could help phone, video, or technical interviews with automatic grading and evaluation of technical skills, human skills and soft skills.

It would not only enable a more efficient and seamless hiring process for HR departments and hiring teams to acquire the most suitable employee, but also guarantee talent acquisition is primarily based on skills rather than higher education degree credentials.

Ethical AI is a key issue that needs to be actively addressed along the way of designing, developing, and using these technologies and tools, as discussed in the MIT Sloan Management Review and Forbes

From a technical point of view, this absolutely requires accurately labelled data, unbiased datasets that represent people from all backgrounds, and explainable AI algorithms from both tool developers and employers that use the tools.

From the perspective of implementation and operation, this requirement for tool providers and employers goes beyond being responsible and compliant to laws and regulations, to actually and periodically prove it (such as for workforce diversity) with metrics and explanation.

Startup Solution

Scouted provides a platform that uses AI to help early to mid-career candidates to get landed on the right job, enabling companies to hire and manage talent based on abilities and potential. Compared to most job boards or job search engines, Scouted added the function of general video questions and answers to provide job seekers an opportunity to share their stories and thoughts through their Scouted Virtual Interview so that companies can get to know the real person. 

HireVue is a Runway-accelerated startup (who got acquired by the Carlyle Group through a limited buy-out in 2019). The company provides a talent interaction platform for digital screening and video interviewing of job applicants. It basically empowers hiring managers to make smarter hiring decisions, leaning on predictive analytics, video interviewing and coding challenges tools to provide AI-driven assessments of talent success. 

2. Assist not Replace the Workforce with Augmented Intelligence

There has been a societal unease for decades about automation taking away people’s jobs. 

According to an OECD estimation from 2019, 14% of the existing jobs were at high risk of automation and 32% of the existing jobs could be radically transformed. 

This estimation is significantly lower than what some researchers have argued previously. It illustrates a more harmonic and viable future where humans work together with automated machines and algorithms to improve productivity and drive higher revenue. 

Depending on the level of intelligence, automation can be roughly grouped into 3 broad categories (source: KPMG):

  • Rule-based Robotic Process Automation (RPA)

  • Data-based machine learning

  • Contextual and cognitive AI

RPA will replace many repetitive, rule-based tasks, since that is exactly what it was designed for. As a result, it is on many HR departments’ agenda to eliminate such repetitive roles. 

In contrast, the current wave of machine learning adoption and the future maturity of contextual and cognitive AI intend to do things that are unlikely to replace human beings, such as:

  • Optimize workflow

  • Provide further insights

  • Assist decision-making

This will provide opportunities to empower the workforce by maximizing a positive and safe work experience

Examples of such work experience include individual AI assistants, management of teams of AI, quality assurance with AI, and addressing emotional intelligence or other complex issues.

Grand View Research estimated that the global augmented intelligence market size was US $ 4.75 billion in 2018 and is expected to register a Compound Annual Growth Rate (CAGR) of 25.2% from 2019 to 2025.

To help the workforce to prepare for and transition to human-AI teams with augmented intelligence, employers should have strategies and use tools to orient and train their workforce to engage and work side by side with augmented intelligence. Employers which do so will gain competitive advantage and investment opportunities in the near future (source: Forbes).

Startup Solution

Memory, another Runway-accelerated startup based in Oslo, Norway launched a free individual virtual assistant tool called DeWo in 2019. Dewo uses machine learning to dissect individual employee’s productive patterns and output tailored ways of working. It automatically blocks notifications, optimizes an employee’s calendar for deep work (30 minutes at least), and advises how to work smarter. Memory has raised over US $ 11 million venture funding.

3. Optimize Human Capital Management

In the future of work, Millennials, Gen-Zs and even future generations will be the major workforce. Task-specialized gig work will rise and full-time fixed roles will decrease. All these trends demand human capital management (HCM) to be not only implemented but also optimized. 

HCM was coined at the latest in the 1970s, but it was not until the past decade that HCM started to gain increasing adoption by businesses and governments.

The distinction between HCM and all other concepts related to HR is nicely summarized in an article from Oracle. In short, HCM moves beyond payroll, time, and benefits to workforce performance analysis, development, learning and more. It is estimated HCM as a market will grow to US $ 24.3 billion by 2025, according to MarketsandMarkets.

To empower an employed workforce, a company or an organization may optimize their human capital management (HCM) in a number of ways. We focus on two main approaches below.

a) Workforce-Centered Talent Mobility with an Internal Talent Marketplace

An internal talent marketplace will be needed for the challenge of talent mobility, which is increasingly important for innovation and digital transformation. Companies will have to experiment with new organizational structures to get the best out of their people. 

The goal is to let all the talent work together in a continuum for a certain product or project (source: MIT Sloan Review).

The Deloitte Human Capital Trends 2019 report shows that 76% of C-Suite-level executives believe internal talent mobility is important, with 20% stating it’s one of their company’s three most urgent issues. The 2020 version of the same report shows that less than a third of the global business leaders and HR professionals had information on talent mobility. 

HCM systems are required for organizations to better understand their workforce beyond payroll, time, benefits etc. The traditional model where business leaders and HR professionals lead internal talent mobility needs to be changed (source: Gloat). 

With a human-centred approach to empower the workforce, employees and talents need to be maximally engaged and a marketplace platform is one of the most efficient and friendly ways for engagement.

A number of large companies have already built their internal talent marketplace platform, where employees can build their profile and they can join task-specialized work found by themselves or matched by the platform. This may be extended to employee sharing programs or platforms for cross industry talent sharing, such as what some companies did during the peak of the COVID-19 pandemic (source: Harvard Business Review). 

Startup Solution

Workday (NASDAQ: WDAY) acquired Rallyteam, a Runway accelerated startup, in June 2018. The acquisition enabled Workday with an internal talent mobility platform that helps employees share their interests, skills and connections and automates matching them with relevant jobs, projects, tasks and people based on key variables including interests, skills, expertise, location and availability.

This automation enables companies to better understand and utilize their employees. Workday Ventures also joined the investment in Topia, a San Francisco based startup for a talent mobility platform for enterprise’s international workforce, which has raised nearly US $100 million venture funding.

Topia’s platform has received approved integration with Workday in April 2020. According to Topia’s own estimation, talent mobility has the potential of becoming a more than a US $30 billion market.

b) Workforce Reskilling and Upskilling with a Learning Management System

A learning management system (LMS) with up-to-date content and user-friendly guidance, tracking, and reporting will enable the workforce to reskill or upskill in response to accelerated technological advance and adoption. 

According to the WEF 2018 report, skills continuing to grow in prominence by 2022 include analytical thinking, innovation, technology design, programming as well as creativity, originality and initiative, critical thinking, persuasion and negotiation, attention to detail, resilience, flexibility and complex problem-solving. This is a combination of soft skills, thinking skills, digital and technical skills.

An effective internal talent marketplace would help mobilize skills for task-specialized work. 

That requires employers to experiment with new software and systems outside those currently recommended by the IT department. Some of the solutions may require in-house development of tools (source: MIT Sloan Review). Luckily, more external LMS vendors are becoming available to address this need.

From an investment perspective, LMSs have reached a mature stage which has seen a number of mergers and acquisitions (M&A) of the largest LMS providers in the recent three years. 

For example, VERTEX Solutions was acquired by TCC Software Solutions on April 18, 2017; Grovo was acquired by Cornerstone OnDemand (NASDAQ: CSOD) for approximately US $22.9 million on November 9, 2018; Instructure (NYSE: INST) was acquired by Thoma Bravo through an approximate US $2 billion public-to-private LBO on March 23, 2020; 

When using an LMS for reskilling and upskilling workforce, it is important to address the aforementioned issue of the most in need are the least likely to receive education and training, and making sure learning opportunities are equally available to all the workforce in the organization.

In terms of the format of learning, a combination of virtual, in-person, on-demand, and blended learning provide options for the workforce to receive the best learning outcomes.

Technologies such as conversational AI, virtual reality and augmented reality could be used to improve the learning experience.

Credentials That Will Be More Important to Hiring Practices in the Coming Years

Certifications and digital badges will be more important than degrees to organizational hiring, providing the opportunity for personalized lifelong learning. Graph source: AACSB.

4. Personalize Lifelong Learning

Massive open online courses (MOOC) and other education technologies are now available for individuals for free or at a relatively affordable cost.

However, what would empower the workforce the most is a LMS that not only provides courses and learning content but also offers personalized guidance and management based on skill demand and supply. 

The workforce wants to know what skills are needed based on what he or she already has in order to get to a certain job or career goal the quickest.

While an employer-offered LMS as a part of the HCM will be able to provide reskilling and upskilling opportunities for some employed workforce, strategies and tools are also needed for:

  • Unemployed workforce
  • Workforce who do not have access to an LMS
  • Workforce whose LMS does not offer the learning sought
  • Youth and those with significant barriers to employment

These are usually offered by government-funded programs or initiatives.

The Workforce Innovation and Opportunity Act (WIOA) Was Signed in the US to Strengthen and Improve the Workforce System

The Workforce Innovation and Opportunity Act (WIOA) was signed into law on July 22, 2014. 

Under WIOA, local workforce development boards (WDBs) administer the core workforce programs offered, with guidance and oversight from state workforce agencies (source: the Urban Institute). These WDBs are primarily funded by federal, state and local governments.

According to the US National Association of Counties, the federal funding for WIOA for fiscal year 2020 was US $2.82 billion, an increase of US $30 million from fiscal year 2019.

Many WDBs are looking for new sources of funding and resources, such as foundation grants and employer-led initiatives.

 

Despite the challenges with limited funding, fragmented governance and priority conflicts when multiple stakeholders are in the local workforce development, some successful programs have shown the importance of supply-demand assessment, close ties with employers, and being adaptive to the participants’ specific situation.

The challenges and success factors, as well as the high unemployment rate caused by the COVID-19 pandemic, requires workforce development programs to use every dollar wisely. 

Certifications and digital badges will be more important to organizational hiring in the coming years. LMS offers learning tracks for certification, certificates or licenses.

They appear to be equally if not more valued than academic degrees in hiring, according to a 2018 survey done by the Association to Advance Collegiate Schools of Business (AACSB) and a 2019 survey done by ellucian.

Another way is to choose an LMS that offers personalized guidance and management of the workforce development path, from education and skills development to being hired. Existing LMS for lifelong learning has a good amount of courses and filtering functions, but lacks personalization and optimization. 

Startup Solution

The LMS from Metrix Learning, used by the California Alameda County WDB, relies on self assessment of skills to attempt to personalize. The assessment included 25 skills, and for each skill, five scales could be selected to indicate the level. Based on that assessment, a list of possible learning paths are generated for a number of industries and roles.

This is a good starting point with self-assessment that serves more as filtering than personalization. However, the resulting long list of suggested courses are not optimized for a workforce who is not a full-time learner or who may lack the knowledge to choose the most efficient path to learn.

Additional information such as skill supply and demand based on geographic location would also be very useful for the workforce.

CareerWaze is a California-based startup that offers personalized LMS. Its skills training platform harnesses machine learning to more precisely identify and suggest educational opportunities for users looking to hone their technical prowess. Although in its very early stage, products like this could help individuals understand and acquire in-demand skills to survive and thrive in the future of work.

Conclusion

The global workforce faces 3 major challenges in the future of work:

Skills mismatch, skills outdatedness, and lack of reskilling or upskilling.

These challenges are mostly driven by the rise of the gig economy and the rapid advance and adoption of technologies (such as 5G mobile network, AI, big data analytics, cloud computing, and green energy).

Instead of being left behind, the workforce can be empowered by governments, organizations, enterprises, startups and educational institutions:

  • Align and pre-qualify job seekers

  • Assist not replace the workforce with augmented intelligence

  • Optimize human capital management with an internal talent marketplace and a learning management system

  • Personalize lifelong learning

The four ways identified in this article can help empower the workforce for a bright future, and create an opportunity for both social and business growth. Written by Liyu Wang, Ph.D., Senior Innovation Researcher.

End note 

Runway is a Silicon Valley-based innovation company that provides strategic consulting, all-inclusive workspace and virtual office memberships to a global community of global enterprises and tech startups.

We have a strong track record in providing early acceleration, support and assistance for startups that have created solutions for the future of work, and for helping our corporate clients identify and engage with high-quality startups to achieve their business goals. 
 
Our new ecosystem fund launching later this year, invests in the empowered workforce.
 

We believe the workforce technology, sustainable digital solutions, and companies promoting holistic wellness are crucial to make our cities more livable. If you’re interested in becoming a limited partner (LP) in the fund or receiving investment, contact our innovation team

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