A new global PwC report reveals that 84% of Irish CEOs believe that a lack of essential skills in their workforce is threatening the future growth of their organisation.
The report Talent Trends 2019: Upskilling for a Digital World shows that this sentiment compares to just 69% in 2014, suggesting that concerns over skills has risen in line with the advent of new technologies over the past five years. At the same time, nearly a third of Irish CEOs are focusing on upskilling and significant retraining as the most important way to close the skills gap in their organisation.
Of those who are most worried, 70% said the lack of available key skills is pushing up their people costs faster than expected; 45% said it is impacting quality standards and customer experience and 34% said their business is not able to innovate effectively as a result.
The survey finds that CEOs are shifting how they fill talent gaps. Almost a third, 30%, of Irish CEOs say significant retraining or upskilling is the most important initiative to close a potential skills gap, against just 12% who say it’s hiring from outside their industry.
This is in contrast to previous years of surveys, which have shown CEOs exploring the idea of hiring from other sectors—particularly industries that are further along the innovation journey—and using 'gig economy' workers.
Ger McDonough, Partner with PwC Ireland’s People and Organisation group said, "Although reskilling employees requires investment, when set against the alternatives—such as severance payments for workers who are let go and the cost of finding new workers with in-demand skills—reskilling is the more attractive option."
This focus on reskilling resonates with employees according to PwC research. A global survey of more than 12,000 workers found that employees are happy to spend two days a month on training supplied by their employer to upgrade their digital skills.
This refocusing on upskilling is taking place against a background of rising use of automation and artificial intelligence (AI). While these technologies will inevitably displace some workers, CEOs' opinions vary on the scale and speed of that shift. 48% of Irish CEOs believe that AI will displace more jobs than it creates in the long run. Yet a large majority (84%) of Irish CEOs are concerned about the availability of key skills.
What's clear is that investment in digital upskilling is just one part of what's needed to create the workforce of the future, because engaging workers to acquire new skills also requires a strong learning culture to be inextricably woven into a high-quality workplace.
Ger McDonough added, "Employers need to satisfy the growing desire for 'good work': a fulfilling, rewarding experience that meets a set of high-quality values. Technology brings opportunities for efficiencies and cost management, but it also brings the opportunity to make working lives more productive and fulfilling."
To create good work, organisations will need high-quality workforce data and while 83% of Irish CEOs say the right people data is vital, only 23% believe the data they currently receive is adequate.
CEOs are also aware that automation's impact on the workforce has implications for public trust. Nearly four out of ten (38%) of Irish respondents see a lack of trust in business as a threat to growth and they know that how they handle automation will publicly test that narrative.
In light of this, CEOs are divided on where the responsibility for workers displaced by automation and AI should fall: over half (54%) believe the Irish Government should provide incentives for the development and use of AI, while 43% think Government should provide a safety net for displaced workers. This debate clearly has much further to run. The report also says that 48% of Irish CEOs say that AI and automation will displace more jobs than it will create in the long run. (global: 49%).
Ger McDonough concluded, "The workplace model is moving from the relative stability that has been in place for decades to a time of constant change, with no final agreed destination. Organisations will face many obstacles on this journey. To navigate it successfully, building and maintaining trust will be key, both among employees and with governments and society as a whole."
'Talent Trends 2019: Upskilling for a Digital World' is part of PwC’s 22nd Annual Global CEO Survey trends series. PwC conducted 3,200 interviews with CEOs in more than 90 territories including 235 in Ireland.
Related piece: from PwC Irish report Nov 2017: Economic Impact of AI
Irish GDP could be 11.6% higher in 2030 as a result of Artificial Intelligence (AI); the equivalent of an additional €48 billion, according to new research by PwC. This makes AI one of the biggest commercial opportunities for Ireland is today’s fast-changing economy.
The adoption of 'no-human-in-the-loop' technologies (those technologies that remove humans from the process and decision-making) will mean that some jobs will inevitably become redundant, but others will be created by the shifts in productivity and greater consumer demand. The analysis concluded that it is likely that the effect on jobs in Ireland in the long term will at least be neutral, if not net positive.
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with over 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
© 2019 PwC. All rights reserved