The accelerating pace of technological, demographic and socio-economic disruption is transforming industries and business models, changing the skills that employers need and shortening the shelf-life of employees’ existing skill sets in the process. For example, technological disruptions such as robotics and machine learning—rather than completely replacing existing occupations and job categories—are likely to substitute specific tasks previously carried out as part of these jobs, freeing workers up to focus on new tasks and leading to rapidly changing core skill sets in these occupations.¹¹Even those jobs that are less directly affected by technological change and have a largely stable employment outlook—say, marketing or supply chain professionals targeting a new demographic in an emerging market—may require very different skill sets just a few years from now as the ecosystems within which they operate change.

In this new environment, business model change often translates to skill set disruption almost simultaneously and with only a minimal time lag (Figure 8A). Our respondents report that a tangible impact of many of these disruptions on the adequacy of employees’ existing skill sets can already be felt in a wide range of jobs and industries today (Figure 8B).

Impact of Disruptive Change on Existing Skill Sets

During previous industrial revolutions, it has often taken decades to build the training systems and labour market institutions needed to develop major new skill sets on a large scale. Given the upcoming pace and scale of disruption brought about by the Fourth Industrial Revolution, however, this may simply not be an option.¹²

For example, current technological trends are bringing about an unprecedented rate of change in the core curriculum content of many academic fields, with nearly 50% of subject knowledge acquired during the first year of a four-year technical degree outdated by the time students graduate, according to one popular estimate.¹³A focus on the state of the talent pipeline for traditional formal qualifications and ‘hard skills therefore risks dramatically understating the scale of impending skill set disruption if a large part of the existing subject knowledge of the current workforce will be outdated in just a few years.

Beyond hard skills and formal qualifications, employers are often equally concerned about the work-related practical skills or competences that current employees (or prospective new hires) are able to use in order to perform various job tasks successfully.¹⁴Focusing on a core set of 35 work-relevant skills and abilities that are widely used across all industry sectors and job families (see Figure 9)—derived from the same classification as our occupation-level data¹⁵—the Report finds that these practical skills, too, will be subject to accelerating change and significant disruption in the immediate future. On average, by 2020, more than a third of the desired core skill sets of most occupations will be comprised of skills that are not yet considered crucial to the job today, according to our respondents. At an industry level, the highest expected level of skills stability over the 2015–2020 period is found in the Media, Entertainment and Information sector, already profoundly transformed in recent years, while the largest amount of skills disruption is expected to occur in the Financial Services & Investors industry.¹⁶

There are various reasons for such dramatic shifts in expected skills requirements. As noted earlier, in the face of rapidly rising computing power, an ability to work with data and make data-based decisions will become an increasingly vital skill across many job families as employers scramble to build a workforce with solid skills in data analysis and presentation (e.g. through visualization) and the amount of potentially useful digital information generated and stored keeps increasing exponentially. In the Consumer sector, for example, vast amounts of data will allow for increased sophistication in inventory management, customer segmentation and product personalization, involving some use and familiarity with technology by jobs at all levels, from retail assistant through to more senior positions.

Businesses in industry sectors such as Mobility, Energy, Financial Services & Investors and Information and Communication Technology are increasingly finding themselves confronted with new consumer concerns about issues such as carbon footprints, food safety, labour standards and privacy. From a skills perspective, they will need to learn to more quickly anticipate these new consumer values, to translate them into product offerings and to become ever more knowledgeable about the processes involved in meeting these demands and the impact this may have on their employees’ current skill sets and working practices.

While most jobs require use of a wide range of skills, somewhat different skill set combinations are sought after in different industry sectors. Our dataset allows us some generalized observations about the impact of various disruptive changes on skills demand at an aggregate industry level.

With regard to the overall scale of demand for various skills in 2020, more than one third (36%) of all jobs across all industries are expected by our respondents to require complex problem-solving as one of their core skills, compared to less than 1 in 20 jobs (4%) that will have a core requirement for physical abilities such as physical strength or dexterity. However, along with the impact of disruptive changes on these sectors, it is anticipated that complex problem solving skills will become somewhat less important in industries that are heavily technical today—such as Basic and Infrastructure and Energy—in which technology may automate and take on a bigger part of these complex tasks going forward, and will ascend in those industries, such as Professional Services and Information and Communication Technology, that are expected to become more complex and analytical due to these trends.

Overall, social skills—such as persuasion, emotional intelligence and teaching others—will be in higher demand across industries than narrow technical skills, such as programming or equipment operation and control. Content skills (which include ICT literacy and active learning), cognitive abilities (such as creativity and mathematical reasoning) and process skills (such as active listening and critical thinking) will be a growing part of the core skills requirements for many industries.

If skills demand is evolving rapidly at an aggregate industry level, the degree of changing skills requirements within individual job families and occupations is even more pronounced (Figure 10).

For example, the increasing ubiquity of mobile internet combined with the coming-of-age of the Internet of Things promises to transform the daily routine of many frontline roles in the Sales and Related, Installation and Maintenance, and Manufacturing and Production job families across all industries, requiring a much higher level of technology literacy than in the past. As an ancillary characteristic to increased automation in these fields, employees are expected to have more responsibilities related to equipment control and maintenance and problem-solving skills, as well as a broader general understanding of the work processes of their company or organization.

Many formerly purely technical occupations are expected to show a new demand for creative and interpersonal skills. For healthcare practitioners, for example, technological innovations will allow for increasing automation of diagnosis and personalization of treatments, redefining many medical roles towards translating and communicating this data effectively to patients. Similarly, Sales and Related jobs may see an increased demand for creative skills and ideas for promoting a memorable shopping experience, as brick-and-mortar retail has to reposition itself in relation to e-commerce and online competition.

Overall, our respondents anticipate that a wide range of occupations will require a higher degree of cognitive abilities—such as creativity, logical reasoning and problem sensitivity—as part of their core skill set. More than half (52%, the bright blue part of the bar in Figure 10) of all jobs expected to require these cognitive abilities as part of their core skill set in 2020 do not yet do so today, or only to a much smaller extent. In another 30% of jobs (the dark blue part of the bar in Figure 10), demand for these skills is currently already high and will remain so over the 2015–2020 period. Only 18% of jobs requiring high cognitive skills today are expected to do so less in the future (the grey part of the bar in Figure 10).

At the other end of the scale, among all jobs requiring physical abilities less than one third (31%) are expected to have a growing demand for these in the future, about as many as the proportion of jobs in which physical abilities are anticipated to decline in importance (27%). The skills bundle with the most stable demand across all jobs requiring these skills today or in the future are technical skills: nearly half (44%) of all jobs requiring these skills today will have a stable need for them in the coming years.

Understanding Current Skills Supply

Today’s job markets and in-demand skills are vastly different than the ones of 10 or even five years ago, and—as demonstrated in this Report—the pace of change is only set to accelerate. Governments, businesses and individuals alike are increasingly concerned with identifying and forecasting skills that are relevant not just today but that will remain or become so in the future to meet business demands for talent and enable those that possess them to seize emerging opportunities.

In light of technological trends such as the ones outlined in this Report, in recent years many countries have undertaken significant efforts to increase the amount of STEM (science, technology, engineering and mathematics) graduates produced by their national education systems (Table 8A). While the employment trends identified by this Report certainly corroborate the importance of these efforts, it is nevertheless also clear that the potential net job creation in absolute terms in the STEM field alone will not be sufficient to absorb strains on other parts of the labour market. What we have found instead is that disruptive changes will have a significant impact on skills requirements in all job families and that they are creating a range of opportunities and challenges in all industries, not just narrowly related to ‘hard knowledge’, technical skills and technology. In order to manage these trends successfully, there is a need for potentially reskilling and upskilling talent from varied academic backgrounds in all industries (Table 8B).

This Report has focused on shifts and disruptions to skills requirements as perceived by CHROs. It is clear that even if today’s skills base would conform exactly to today’s perceived skills requirements, the looming skills instability challenge would be substantial. In practice, however, there are already today large mismatches between the actual supply and demand of key work-related skills (Table 8C), with 38% of employers reporting difficulties in in filling jobs in 2015, according to ManpowerGroup’s most recent Talent Shortage Survey.¹⁷

Skills mismatches may therefore emerge not just between the supply and demand of existing skills today, but also between today’s skills base and future skills requirements. Efforts aimed at closing the skills gap will increasingly need to be grounded in a solid understanding of a country’s or industry’s skills base today and of changing future skills requirements due to disruptive change. For example, efforts to place unemployed youth in apprenticeships in certain job categories through targeted skills training may be self-defeating if skills requirements in that job category are likely to be drastically different in just a few years’ time. Indeed, in some cases such efforts may be more successful if they disregard current labour market demands and past trends and instead base their models on future expectations.

Across industries, geographies and job families, an ability to understand the current skills base in near-real time and to accurately forecast, anticipate and prepare for future job contents and skills requirements will be increasingly critical for businesses, labour market policymakers, workers’ organizations and individuals to succeed. Drivers of change to job markets such as Big Data analytics may themselves become useful tools in managing this process.