WHICH SKILLS WILL WENEED IN THE FUTURE?Which skills and expertise will we need in the future, to power the nation’semerging industries and be globally competitive? Where will skill shortagesappear throughout key Australian industries? And how do we bridge thisgap to lessen the impact on our economic growth?Forecasts from global management consultancy McKinsey & Company, show that thedemand for technology (between 2016 and 2030) is gathering pace. But that’s not the fullstory. “The increase in the need for social and emotional skills will similarly accelerate,” 1While IT skills and competencies based around Science, Technology, Engineering and Maths(STEM) will be highly valued, research from Australia and around the globe, continues to showan expanding need for “soft skills” like communication, entrepreneurship and adaptability.Research also demonstrates a corresponding scarcity of these skillsets.Without these soft or “human” capabilities, a business cannot empower its people to meetfuture market challenges or adapt to rapid change.For employees to work efficiently alongside automation, to be able to process informationand to make better decisions and progress in their careers, soft skills are non-negotiable.Businesses will need to cultivate both soft skills and hard, technical skills, as part ofa talent-first approach that prioritises the hiring, development and retention of highperforming talent.A talent-first mindset addresses imminent skills shortages across key roles, functions andindustries, by keeping employees motivated, productive and engaged. This in turn, keepsvaluable market insights and IP in-house, while helping to mould future business leaders.If employers want to stay competitive and grow their businesses,it is vital that they begin to understand rising skills demands andthe talent-first imperative - and start planning their responses today.12“Skill shift: Automation and the future of the workforce 2018”

A GLOBAL REVOLUTION IN SKILLSWhen World Economic Forum executive chairman, Klaus Schwab,coined the term ‘Fourth Industrial Revolution’, he was describing how acombination of technologies is merging with our physical lives, changingthe way we function and interact at home and at work.Those technologies include robotics, artificial intelligence (AI),nanotechnology, quantum computing, biotechnology, the Internet of Things(IoT), fifth-generation wireless technologies (5G), 3D printing and fullyautonomous vehicles, among others. 2The rapid and relentless advance of technology is inevitable, asare the changes that loom in its wake.The disruption brought on by digitalisation, customer-centric deliverymodels, big data and automation, when combined with rising customerexpectations and social change, are rapidly transforming the talent andskills market.According to the McKinsey paper, there will be sweeping changes acrossall industries and job functions between now and 2030.“While there may be enough work to maintain full employmentto 2030 under most scenarios, the transitions will be verychallenging, matching or even exceeding the scale of shifts outof agriculture and manufacturing we have seen in the past.” 1“The Fourth Industrial Revolution, by Klaus Schwab”233

The next ten years will see a shake-up of the mix of skills required by theAustralian workforce, with workers needing to deepen their existing skill sets,or acquire new ones.Some jobs will disappear altogether. The displacement of workers by automation is a genuinerisk across many industries.In her role as the TAFE NSW Head of SkillsPoint, Technology and Business Services, TrainingOperations, Dr. Geethani Nair reports that “the majority of workers in some industries willhave their jobs displaced or significantly transformed, or their roles will simply not exist inthe next five years.”Of course, new roles will emerge as a result of this transformation, but many will blendexisting skillsets, requiring capabilities throughout both hard and soft skills.Hard skillsSpecific, quantifiable knowledge orabilities required for a job. Increasinglythe most sought-after will be in AI,cloud computing, Internet of Things,machine learning algorithms, datascience, drone piloting, informationsecurity, mechatronics and remoteequipment management.Soft skillsOtherwise described as “human”,“social”, “emotional”, “interpersonal”,“people” skills. Includes communication,collaboration, customer service,ethics, creativity, complex problemsolving, critical thinking, digital literacy,adaptability/learnability, cognitiveflexibility, emotional intelligence,initiative, judgement, decision making,negotiation and persuasion, peoplemanagement and conflict management.While basic digital, advanced IT and programming are the high-demand skillsets of tomorrow,analysts predict the demand for “social and emotional skills” will grow significantly across allindustries from sizeable bases today.4

Forecast demand for skills 2016 – 2030 (US) 140%Creativity33%Leadership andmanaging others24%Adaptability andcontinuous learning33%Entrepreneurshipand initiative530%Interpersonal skillsand empathy27%Advancedcommunication andnegotiation skills91%Advanced IT skillsand programming69%Basic digital skills5

WHY ARE SOFT SKILLSSO SOUGHT AFTER?In this digital, hyper-connected world, information overload and its associated stresses, are thenew norm. Soft skills such as creativity, adaptability, time management and collaboration allowemployees to process new information better and to make better decisions.Initiative, persuasion and negotiation also make career progression easier. As TAFE NSW’s Dr Nairexplains, “people need the agility to be able to learn as they go, be able to change their tactics,and be in the moment as the technology and role changes.”“No matter how technical therole, it is the soft skills that willsort the good from the great.” 343% of APAC employeessay soft skills will helpthem adjust and retrainto keep their roles. 3Even though hard skills may be easier tomeasure and teach, soft skills will make peoplemore employable in their chosen industry,and capable of adding value. Soft skills willhelp employees disrupt their industries andcreate positive change. No matter how deepa worker’s knowledge is – whether in AI,blockchain or machine learning algorithms –the ability to collaborate with colleagues,be resilient, solve problems creatively andempathise with end users will be invaluable.These skills will only grow in importance astechnology gets smarter, more automated, andthe nature of jobs transforms. As tech breaksout of its silos, creativity, problem solving, andcritical thinking come into their own. 3New and existing roles will need people who can interpret data and turn it into useful insightsand measured decisions. Businesses will need marketers who can understand and sell the newtechnologies. The distinctly “human” skills of leadership and management, will also be crucialin the future. These skillsets will continue to evolve as leaders are required to drive and supportmore collaborative environments.Overall, these soft skills help to expand the application of new technology, and help employeesstay nimble enough to navigate more automation and AI in the workplace. 336“LinkedIn 2019 Future of Skills APAC ”

HOW WIDE IS THE SKILLS GAP?The gap between a current workforce and a future fit workforce, is vast.80 percent of CEOs surveyed by PwC are worried about the availability ofkey skills.4At least five industries – government services, construction, health, professionalservices and education – are set to face more than two million skills shortages attheir peak. According to a 2019 Deloitte report, two-thirds of jobs created betweennow and 2030 will be strongly reliant on soft skills. We already face significantshortages now, and that is forecast to worsen. 589% of executives say it is difficult to find people with soft skills. According toDeloitte, this is especially severe when it comes to customer service skills, themost in-demand skillset in the Australian economy.5Business leaders need to address this now; some already are. In the Software-as-a-Service(SaaS) industry, the new role of Customer Success Manager (CSM) has been designed to reducecustomer churn. CSMs use their soft skills to individualise the product and deliver the bestoutcome for clients based on their particular needs. 3Penguin Random House, Google, Ernst & Young(EY) and PriceWaterhouseCoopers (PwC) have alldeclared they no longer demand a university degreefor all roles. Instead, they’re reflecting anothertrend that demonstrates the perceived value ofhuman skills: recruiting based on a broad range ofeducation, life skills and experiences.In other areas, hybrid roles arespringing up to fill the gaps. A datascientist whose role once involvedmining and manipulating data, will nowalso need strong creativity and socialskills. HR managers won’t just use theirpeople skills, they’ll need data scienceskills to understand employees better,reduce hiring bias and to help manageattrition. The combination of hard andsoft skills also makes the role moreresistant to automation.4“The talent challenge: Rebalancing skills for the digital age”5“The path to prosperity: Why the future of work is human”7

HOW DOES THIS AFFECTDIFFERENT SECTORS?Overall, soft skills can be moreuniversally applied than hard, but willdiffer between fields and sectors.In infrastructure, for example, the complexity ofprojects is driving demand for communication,collaboration, problem solving and systemsthinking, i.e., the ability to understand the roleand interconnected function of different teamsacross the entire project.In the public sector, agencies are feeling thepressure to raise customer service standards inanswer to consumers’ rising expectations andthe wealth of choice in products and services.With the recognition that different functionsof government need to “break down the silos”and work more collaboratively to drive businessoutcomes. Demand has grown for agencyemployees who can communicate and buildeffective relationships and networks, empathisewith multiple perspectives, build trust andbroker solutions – a classic soft skill set.In the health sector, the McKinsey paper saysdemand for advanced IT and basic digital skills,entrepreneurship, and adaptability will see thelargest double-digit cumulative growthamongst industries.TAFE NSW’s Dr Geethani Nair adds that“workers will require more customer serviceand people skills including personal care.”Human-centred design, collaboration, listeningand responding with empathy are also high onthe list. 6In the manufacturing sector, Dr Nair says therewill be many jobs that won’t survive in theircurrent form. As production functions infactories are disrupted, we’ll see businessesseeking out people with social and emotionalskills, especially advanced communicationand negotiation, leadership, management,and adaptability.The transport and logistics industries will alsosee their share of change, with truck driversincreasingly acting as the interface betweenorganisations and consumers, making trainingin customer service skills even more important.But the biggest changes with regards to AI andautomation, could come in the retail and supplychain industries, with managers increasinglybeing asked to work with IT, engineering andmanufacturing, as well as being capable incollaboration, networking, relationshipmanagement, risk management andchange leadership.68“Skill shift: Automation and the future of the workforce”

FILLING THE SKILLS GAPIn the future, a strategy based on scouring the market and acquiring skilledindividuals or teams of people, might not be an option for all companies: the talentsupply simply might not be there.An alternative solution is to evolve the skills of current employees, to adapt to new roles, redesign workprocesses, or redeploy workers with specific skills to other tasks or entities within the organisation. 6Many of the world’s most successful companies are already learning to adapt.In fact, 55% of leaders from companies with 1 billion or more in annualrevenue said they would laterally move more people into different orbrand-new roles than they would release. 6As an example, TAFE NSW was involved in a project that worked with one employer in SouthAustralia’s automotive industry at a time when many workers were at risk of losing their jobs.“The employer recognised that many staff in danger of displacement had great problem-solvingskills, great customer service skills,“ said TAFE NSW’s Dr Nair. “Even though the job-for-life theywere trained for no longer existed, they had skillsets that were transferable from one area toanother. TAFE NSW helped the employer do a skills analysis, put a plan together and identify thejobs they could put these workers into.”Training is the other great hope, despite the myth that says soft skills are inherent – “you either havethem or you don’t”. Researchers at US business school, MIT Sloan School of Management, provedthat not only can you teach soft skills, but that they can bring a substantial ROI to employers.The MIT team worked with a Bangalore garment manufacturer, to introduce an in-factory soft skillstraining program. Within eight months of its conclusion, it had returned roughly 250 percent oninvestment; much of it through improved worker productivity. 7An obvious benefit of training rather than recruiting, is that re-trained employees already haveknowledge of in-house processes and an understanding of company culture, and thisknowledge is preserved. The choice for companies then becomes whether you use in-houseresources and programs tailored to the company, or partner with an educational institution. 6If Australian businesses embrace and invest in on-the-job learning and skills enhancement,and get the approach to the future of work right, we could lift national income by 36 billion peryear from 2030; a figure based on a more highly-skilled workforce achieving an uplift in wages,a less-stressed workforce improving productivity and a more flexible workplace increasing thehours people would be prepared to work. 57“Soft skills training brings substantial returns on investment”9

TALENT-FIRST THROUGH TRAININGInvesting in talent requires the same detailed attention asinvesting in new technology. Rather than thinking of talentas the last step in a business strategy, conversations abouttalent should be at the core of defining the business strategy. 3Businesses need to be planning and preparing for the future, now. They shouldstart by predicting where their skills gaps will be, determining what skills will beneeded and by implementing appropriate training.Yet, learning and development need not be a complete overhaul of skills, or a prescriptive andextended program. Many organisations recognised that shorter, targeted and achievable coursesthat equip talent with skills they can use in their work, are typically the most valuable for talentand organisation alike. These might include micro-credentialling, e-learning and on-the-jobdevelopment such as secondments and job pairing.What is the change most needed for developing the workforce of the future,as ranked by companies in most sectors? Providing continuous learningoptions and instilling a culture of lifelong learning. 16TAFE NSW’s Dr Nair describes the micro-learning opportunities already being provided byTAFE Enterprise as “the skillset that is immediately required to do that job or will be, in theimmediate future. An example of where a micro-learning opportunity is useful, might be anautomotive worker who wants to get retrained in the aged care industry.”Understandably employers are keen for new, lessdisruptive methods of skills development alongsidetraditional accreditation, given the high cost of retraininglarge segments of the workforce, and of having largenumbers of staff unavailable at any one time.1010

YOUR TALENT-FIRST FUTURELOOKS BRIGHTDespite the inevitability of widespread automation and the upheaval in jobsand skills, technology will never be a substitute for people.In many cases, technology’s role will be to augment the work people do, and most analystspredict more jobs will be created than lost.77% of business leaders in the US and Europe, expect no net change inthe size of their workforces as a result of adopting automation and AItechnologies. More than 17% expect their workforces to grow. 5Increasingly, jobs will need those interpersonal and creative capabilities. “Demand here isset to soar for decades,” says Deloitte’s David Rumbens. “This is actually a liberating trend.Much of the boring, repetitive work will be taken care of by technology, leaving the morechallenging and interesting work for humans.”TAFE NSW’s Dr Geethani Nair agrees: “Soft skills learned through work-integrated training areequipping people to retain employment in the future, to be able to think on the go, come upwith solutions in their workplace, embrace the opportunities created by automation andtechnology - and enjoy a rewarding career.”11

Finding a training partner with the requisite expertise andflexibility, is critical to a talent-first approach. Finding apartner that you can work with to develop a customisedtraining program that drives your strategy forward andalign with your industry’s future directions is invaluable.TAFE Enterprise offers on-site, off-site and online training options inleadership and management, business, technology, workplace healthand safety and more, helping to make your business future ready.To transform your business into a leading, talent-first organisationwith soft skills firmly on the agenda, visit call 1300 045 737RTO 90003 CRICOS 00519E HEP PRV12049

Overall, these soft skills help to expand the application of new technology, and help employees stay nimble enough to navigate more automation and AI in the workplace. 3 “No matter how technical the role, it is the soft skills that will . sort the good from the great.” 3 . 43% of APAC employees . say soft skills will help them adjust and .