This has been bubbling and forming for a number of months for me, I’ve listened, I’ve talked, I’ve read, I’ve debated, I’ve researched, I’ve rested, I’ve exercised, I’ve baked, plus a load of other stuff ..so here it is.
Ever since the impact of the Coronavirus, there has been a tidal wave of help, support, ideas and endless news about what the HR/L&D/OD profession is doing at this critical time. However, I’m somewhat more interested in the wider economic opportunities and how we (companies and Learning/OD/HR Professionals alike) start to really address them from a different angle than before. If not now?..when?…
So, let’s start at the beginning, way back in the distant past of October 2019. UK productivity fell at its fastest annual pace in five years. Let that sink for a moment. Our “UK Plc” output was running at the lowest rate since 2014 (the figure in its simplest form is output per hour per employee). The profit numbers seemed alright mind. That’s OK I hear you cry, we were wrestling with a thing called Brexit (remember that) and we’d be in such a different place once that was sorted either way…
A report at the time added that productivity since the economic downturn in 2008 was “growing more slowly than during the long period prior to downturn”… we were working harder, longer, for little improvement and or pure economic benefit. You can access the report here
Right, so we are busy, doing alright but what else? Well, I’m confident many of you will have read or heard this “stat”: in the next five years more than half of all workplace tasks will be performed by machines. The robots are coming! You are all doomed! Many, many jobs, as we know them, just won’t exist. One of my favourite papers by the World Economic Forum has warned of this and made some potential assumptions on what this means across sectors and countries. It was first shared back in 2018, you can find the full report here It was discussed again at Davos in January 2019. In short, many roles and people require significant change, upskilling and the time is now.. let me share an extract from the conclusion written before the full impact of Coronavirus was known –
“The new labour market taking shape in the wake of the Fourth Industrial Revolution holds both challenges and opportunities. As companies begin to formulate business transformation and workforce strategies over the course of the 2018–2022 period, they have a genuine window of opportunity to leverage new technologies, including automation, to enhance economic value creation through new activities, improve job quality in traditional and newly emerging occupations, and augment their employees’ skills to reach their full potential to perform new high value-added work tasks, some of which will have never before been performed by human workers.”
Wow! I buy that! I’m sure every Davos attendee and many CEO/CFO/CTO understood and bought into that vision. We are going to invest and help our people, driving real benefit back into our own local economic climate, brilliant I’m in. It’s not dreamland, it’s not years and years into the future but now, like right now… But hold on, remember, UK productivity is still at the low ebb…we have known for a while about our skills challenge that seems to be holding us back. Here’s what our Government report pointed out back in 2016 on our Digital Skills Crisis –
“The evidence is clear that the UK faces a digital skills crisis. Although comparative nations are facing similar challenges, only urgent action from industry, schools and universities and from the Government can prevent this skills crisis from damaging our productivity and economic competitiveness…”
Hold on a moment, you’ve repeated this story Simon I hear you say! We know this, it’s 2020 but things are worse despite the billions of cross Government and Private sector funding spent to try and address this “skills crisis”…
A great little FT article from October 2019 calls this out nicely here It stated “…if the UK’s skills mismatch were brought in line with our best-practice peers, this could boost productivity by at least 5 per cent. Yet, these shortages and mismatches are set to widen, rather than shrink…”
Don’t worry, the “kids” have got this. A new, smarter, tech savvy generation, blazing a new path. We have roughly 800,000 people about to leave education this year in the UK…then the virus landed front and centre. The issue is now amplified further still, those in the 16-24 age bracket, could potential reach 1 million unemployed as a result of the virus impact (current unemployment figure approx. 400,000). You do the math.
A potential addtional scenario, if they do land work, it may not align with the newer skills we so desperately need as a nation. A recent report from the Resolution Foundation is calling for much more support on this growing issue of youth unemployment. Those effected at the early career stage could also be scared and impacted for years to come.
So, there you have it. A simple but powerful formula that’s just been given the biggest kick in the behind by the potential lasting impact of the virus. Remember, it’s been quietly growing for years…
UK Productivity x Skill Gap x Youth Unemployment ÷ Cost pressure =?
Look, I fully understand and appreciate City pressure on large companies at this time. I also have many great insights into smaller SME companies trying hard to get going again during this next phase. I get it, we need real cash, in the bank to pay people, suppliers, buy things and keep our economy moving. That can’t just be brought up in thin air so to speak! Having worked through the financial crisis in 2008, trust me, I really do understand the pressure that this loss of revenue/profit can put on a company. But! And another for effect, but! This is not the place or time to repeat our mistakes (I am not laying blame for what I have shared above), I fully believe and will fight for, now is the time to invest in your people, make smart decisions about your continued investment/transformational shift and really make a huge impact to drive the next period forward for the better, for your employees, shareholders and all alike.
I don’t profess to have all the answers and understand each sector or industry is different. Yet we don’t seem to of learnt from the past, something has to change and not just because of the virus but it can be the final push. I don’t feel it’s all doom and gloom but a real chance to make change, take some real action to transform and upskill in a way you may never have thought possible before. Don’t let this be your “what if we moment?”…. You can’t hire yourself out of the challenge, it will cost too much and there are not enough people to go around. Be brave, adopt a true people centred transformation approach to your company, be honest about how you will help them and be prepared to be amazed. Your time is now!
What do you think? If not now?…When?…
About the author – Simon Gibson:
Adaptable and experienced People Leader. Drive to deliver meaningful commercial Change, Transformation and Learning/Organisational Development. A varied history and experience of working in differing sectors and economic climates. From start-up to large multi-national Corporate including fields such as Finance (b2b and b2c), I.T., Sales, SaS, Solar Energy, Distribution, Media & Digital.
Specialising creating and evolving the “Modern” or “NextGen” Organisational Development/Learning/Talent function, creating improved Outcomes/Cultures/Climates/Mindsets/Skills that will help the business transform for the better commercially whilst also helping its people succeed.
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