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Understand your workforce skills gaps before you rush to bring in AI

Changing skills needs are causing unprecedented talent shortages but AI can help meet demand 

Published by Oliver Shaw 

A window in an office, with data visualizations overlaid on top

In today’s constantly changing business environment, companies are facing numerous challenges, including competition for talent, changing skills needs, and difficulty in anticipating future skills demand accurately. 

ManpowerGroup’s latest annual talent shortage survey reveals a significant shift in skills demand, which until recently was dominated by science, technology, engineering, and mathematics (STEM). Now softer skills such as communication, collaboration, and decision making are more in favor. 

This shift has been accelerated by the explosion of artificial intelligence and cognitive technologies, which are fundamentally reshaping the nature of jobs and work. Research suggests that AI will impact 70% of jobs, although only 30% of the work in those jobs is likely to be affected. It’s worth bearing in mind though that statistics like these are based on a number of assumptions, so we can’t really know for sure how this will play out. 

But rather than displacing people, AI is a significant opportunity to address talent shortages and skills gaps. AI can take on work it does better than humans, leaving workers to concentrate on higher-value work that requires the soft skills technology can’t replicate. A good example here is how reporting in banking has largely been automated, yet employment in the sector has grown fivefold. 

That said, if we are to bring AI into the workforce productively and profitably, businesses will need to change focus from people and positions to work and skills to be able to spot and close future skills gaps with the best combination of people and technology.  

Generational change and the future of the workforce

Gen Z will make up almost 30% of the global workforce by 2025, according the World Economic Forum. And yet research shows that this generation is the most disengaged at work of any generation (54%) and doesn’t feel a close connection with the organizations they work for

Still, it’s important to recognize that Gen Zers bring a unique combination of creative thinking, problem solving, entrepreneurial thinking, analytical and communication skills to the workplace. The challenge for business leaders like myself is to understand how these skills align with our future organizational needs. 

And if there are gaps in that alignment, we can look to bridge them with AI, at the same time as identifying those skills Gen Zers have that AI can’t provide. Having a more accurate view of skills supply and where the gaps are will enable businesses to develop a clearer investment strategy to round out their current supply using AI.   

Changing focus from people to skills

The conventional approach to workforce planning is periodic and focuses on headcount but when you’re looking to split roles between people and AI, this is no longer appropriate, which is why we need a change of focus from people to skills. 

Businesses can begin the move to skills-based planning by drawing up a skills inventory that documents the current skills supply in their workforce. Leaders can then use this data to identify gaps between demand and supply. 

Workforce demand planning becomes much more complex when changing demographics, changing attitudes to work, and AI as a new skills resource are taken into account. There’s also the question of upskilling workers with skillsets that are closest to those organizations anticipate they’ll need in the future for roles that don’t exist yet.  

This is where competency analysis comes into its own. Analyzing competencies in your organization means understanding the skills, behaviors, and other abilities your workforce has today, the ones you need to achieve your business strategy, and the gap between the two, so you can inform your workforce strategy and manage risk. 

The starting point is to set competency targets for what the business needs to achieve its objectives. This helps you understand the skills you need on an individual level and for each proficiency. Then analyze your actuals by bringing together skills and competency data, so you can visualize where you are today. 

How to determine the right human-AI workforce supply

As companies change focus to work and skills, they’ll be able to evaluate how work itself is evolving in response to the changing business environment. And AI can plays a pivotal role in optimizing workforce productivity. Interestingly, recent research has found that a combination of AI and human skills working in collaboration produces consistently better work outcomes and an average 40% improvement in productivity. 

AI can complement and enhance human skills by automating routine tasks and data analysis, so that employees can focus on tasks that require those uniquely human skills. There’ll be tasks and processes that AI can augment, where technology works alongside people. Elsewhere, partnerships between people and AI will highlight where training and upskilling will better support employees. 

In doing this, data insights are essential in fully understanding skills demand and supply, and being able to model a workforce that combines human and AI skills effectively. Analyzing tasks and activities will reveal where work is being done productively, whether it’s fragmented or being duplicated, and whether it could be automated, consolidated, or centralized. 

As well as effectively collaborating with AI, workers have a role to play in optimizing the work AI does through prompting and quality control. AI is entirely reliant on data sources to be effective and so is subject to any inconsistencies, omissions, or inaccuracies in that data. 

In short, AI shouldn’t be left unsupervised. There are many examples where AI has produces outcomes that are damaging to business objectives and operations. Businesses will need to identify and equip the human workforce with the skills to effectively oversee the work that AI does, so that it boosts productivity rather that detracts from it.  

AI is a game changer for the future workforce

To sum up, it’s clear that, as business leaders, we’ll need to be deliberate and informed in how we use AI to replace humans for certain tasks. But it’s also important to realize that business differentiation won’t come from the technology alone but how you use it. 

Human ingenuity and creativity will have a huge bearing on the outcomes AI produces. Just having the technology will not be enough, because everyone will have access to it. In many ways, AI will level the playing field but it’s human creativity that will deliver competitive advantage. 

In this modern journey of workforce transformation, there’s no doubt artificial intelligence is a game changer. But adopting a new approach to workforce planning that’s sensitive to changing skills needs, and the preferences and attitudes of the incoming workforce, will make this transformation as effective and productive as it can be. 

 

AI and workforce transformation

Redefining the work and skills required for your business to thrive.

Oliver Shaw

Chief Executive Officer, Orgvue

Oliver is an experienced leader of fast-paced, sales-led organizations across numerous products, industries, and distribution channels. He has a strong track record in delivering shareholder value by executing strategies that drive growth in revenue and profit, while delivering world-class service to customers. Oliver began his career in sales and marketing roles in consumer financial services, helping to build fast-growth brands like Capital One and Ageas Insurance. He moved into the technology sector in 2009 when he joined IRIS Software. He has spent the last 10 years in executive roles including Divisional CEO and Merger & Acquisition Director, helping to build one of the largest privately owned software companies in the UK with a valuation in excess of £1 billion. Oliver joined Orgvue as Chief Executive Officer in January 2023 from retail analytics platform, Kalibrate. He holds a degree in Business Studies from Humberside University and an MBA from Nottingham Trent University.

Photograph of Oliver Shaw

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