Automation and AI will speed change sin skills demand, according to the MGI.

The report, Skills shift: automation and the future of the Workforce, the latest research developed by the McKinsey Global Institute (MGI) on the impact of technology on the economy, business, and society. It quantifies the time used in 25 basic skills of the current and future labour market in the United States, France, Germany, Italy, Spain, and the United Kingdom. The report analyzes the economy as a whole, but also delves in the next skill shifts in five sectors: banking and insurance, energy and mining, healthcare, manufacture, and retail.

The growing adoption of automation and AI process at the workspace will deliver significant changes in the skills demand of the workforce. A survey by McKinsey Global Institute (MGI) considers that changes in the skills demanded will have major consequences for business and the economy, as well as for workers, who should train and re-train in order to adapt to the upcoming world of work.

The report shows that the demand of technological skills –including basic and advanced digital skills- will grow 55% by 2030, while the demand of socioemotional skills, such as leadership and people management, will increase 24%. High cognitive skills, such as creativity and complex information processing and interpretation will also undergo greater demand.

In addition, the report highlights that the demand of basic cognitive skills, and physical and manual skills will decrease as the use of automation and AI grow in the workspace. However, physical and manual skills will remain the largest category in 2030 in several countries. “Skills shifts will pose major challenges for millions of workers all over the world”, claims the report.

The study also points out that skills shifts will develop in different ways in different sectors. For instance, in the healthcare sector, there will be a greater demand of physical skills, while in manufacture and other sectors, the demand of these skills will decrease.

According to Jacques Bughin, director of the McKinsey Global Institute and main partner of the McKinsey & Company, “preparing and managing growing shifts in the demand of different skills will be one of the most significant challenges of the next decade”.

The challenge will be shared by every worker, as they will need to strengthen their skills or learn new ones. This will also demand large scale education and recycling initiatives, and companies will play a key role in this process. The report highlights certain case studies of companies that are already working on this area quite successfully, implementing internal and external training initiatives, working along with education institutions. Nevertheless, businesses are not the only actors that will have to take part on this.

Susan Lund, partner at MGI and the person in charge of running the investigation, says that “companies will assume the responsibility of training their own future workforce, but every shareholder –educators, foundations, business associations, unions and policy makers) will have a role to play”.

Finally, the report also points out that, in order to remain competitive, companies will have to develop “profound organizational changes and make strategic decisions on how to develop the future workforce.” Besides, due to a survey performed among over 3,000 business leaders in seven countries, MGI points out that companies are focusing on continuous learning and changing towards a more multifunctional approach on work, based on teams.

Moreover, business claim they must become more agile, and acknowledge the fact that leadership and human resources will also need to adapt. As a matter of fact, almost 20% of companies state that their executive team lacks the knowledge required to lead the implementation of automation and AI. Furthermore, basically one out of three companies are concerned about the fact of lacking the skills needed to adopt automation and prevent damages in their future financial performance.

“While they work on developing the workforce needed for a future of automation and AI, companies expect greater competition when hiring and retaining highly qualified workers. Poorly qualified workers will continue to be the most affected, a trend that has deepen income inequality and average income jobs”. The document finishes with a number of possible paths for the parties involved, including educators, business associations, unions and governments.