WEF predicts loss of millions of jobs by 2020

The Future of Jobs, a survey of nine industries in 15 major economies, including South Africa, also found that women would be hit hardest by the labour disruption.

When it came to respondents’ outlook on how best to deal with these sweeping changes, the news was more encouraging. The most popular workforce strategy across every industry was investing in reskilling current employees.

Other practices, such as supporting mobility and job rotation, attracting female and foreign talent and offering apprenticeships, also scored high.

Hiring more short-term or virtual workers were much less popular responses. Indeed, the survey suggested that those companies that were treating future workforce planning as a priority were almost 50 percent more likely to invest in reskilling than those that did not. The report also indicated that those companies that reported satisfaction in their future workforce strategy were more than twice as likely to be targeting female talent.

The Fourth Industrial Revolution, which includes developments in previously disjointed fields such as artificial intelligence and machine-learning, robotics, nanotechnology, 3D printing, and genetics and biotechnology, was already causing widespread disruption to business models and labour markets with significant changes in the skill sets needed to thrive in the modern world.

The first of its kind, the Future of Jobs represents more than 13 million employees in nine industry sectors and 15 major developed and emerging economies. The report is based on a survey of chief human resources officers and senior strategy executives from companies across nine broad industry categories in 15 of the world’s largest economies, which together account for 65 percent of the global workforce.

In terms of overall impact, the report found that the nature of change over the next five years was such that as many as 7.1 million jobs could be lost through redundancy, automation or disintermediation. The greatest losses were expected to be in white-collar office and administrative roles. This loss was predicted to be partially offset by the creation of 2.1 million new jobs, mainly in more specialised areas such as computer and mathematical, or architecture and engineering.

According to the Industry Gender Gap Report, released alongside the Future of Jobs report, the burden of job losses seems to fall more or less equally on women (48 percent) and men (52 percent). However, given that men represent a larger share of the overall job market than women, this even spread translates into a widening of the employment gender gap, with women losing five jobs for every job gained compared with men losing three jobs for every job gained.

The main reasons given for the greater impact on women were the elimination of female-dominant roles and the low participation of women in high growth skills, such as Stem-related (science, technology, engineering and mathematics) fields, thus adding to pressure on leaders to address the chronic problem of getting more women into these fields.

Healthcare was expected to experience the greatest negative impact in terms of jobs in the next five years, followed jointly by energy and financial services and investors. The industry that stood to create the most jobs was information and communication technology, followed by professional services and media, entertainment and information.

“Without urgent and targeted action today to manage the near-term transition and build a workforce with future-proof skills, governments will have to cope with ever-growing unemployment and inequality, and businesses with a shrinking consumer base,” said Klaus Schwab, founder and executive chairman of the World Economic Forum.

The most significant driver of change – across all industries – was the changing nature of work itself. As new technologies made “anytime, anywhere” work possible, companies were breaking up tasks in new ways, leading to a fragmentation of jobs across many industries.

These effects were further compounded by the rise of mobile internet and cloud technology, enabling the rapid spread of internet-based service models. However, while the new “gig economy” may be one of the most visible and current manifestations of disruptions to the labour market, there was more change – both positive and negative – expected in specific industries, leading to new management and regulatory challenges.

Further unpacking the bundle of technological drivers of change in the Fourth Industrial Revolution, yielded a rather more optimistic picture on the job creation potential of technologies such as big data analytics, mobile internet, the internet of things and robotics.

However, by far the biggest expected drivers of employment creation were expected to be demographic and socio-economic in nature; in particular, the opportunities offered by young demographics and rising middle classes in emerging markets and the rising economic power and aspirations of women.

The results varied significantly across regions and sectors surveyed.

Employment outlook was net positive in only five of the 15 countries covered, but even in those countries there was significant job churn, with some functions becoming redundant as new ones emerge. The highest ratios of jobs created per job lost was expected to be in the Asean countries (3.72 jobs gained per job lost), Mexico (3.06), United Kingdom (2.91), United States (1.37) and Turkey (1.14). In all other countries covered by the Future of Jobs report, there was an expected net loss in jobs.

Skills instability was expected to impact all industries but was particularly pronounced in financial services where 43 percent of the top skills needed across the industry were expected to change by 2020. The least affected by 2020 were media, entertainment and information (27 percent) – unsurprisingly, as the industry was already in the midst of a major skills displacement and a lot of the pain has already been felt.

The research also explicitly asked respondents about new and emerging job categories and functions that they expect to become critically important to their industry by the year 2020, and where within their global operations they would expect to locate such roles. Two job types stood out due to the frequency and consistency with which they were mentioned across practically all industries and geographies.

The first were data analysts, which companies expect will help them make sense of the torrent of data generated by the technological disruptions referenced above.

The second were specialised sales representatives, as practically every industry would need to become skilled in commercialising and explaining their offerings to clients.

Other new specialties frequently mentioned include new types of human resources and organisational development specialists, engineering specialties such as materials, biochemicals, nanotech and robotics, regulatory and government relations specialists, geo-spatial information systems experts, and commercial and industrial designers.

“Our analysis reveals that upcoming disruptions to the employment landscape will be about much more than simply automation. It is essential that we act collectively now to prepare ourselves for the changes that we know the Fourth Industrial Revolution will bring,” said Saadia Zahidi, head of the Global Challenge on Employment, Skills and Human Capital at the World Economic Forum.

The report called on business to take more responsibility for upskilling, reskilling and collaborating rather than competing on talent. It added that it was imperative that governments put in place rapid and fundamental change in education systems to prepare for the new labour market.

“In this age of disruption, business models can best bring in fresh thinking through leveraging all available talent and expanding the diversity of voices in their workforce,” said Schwab.

“There is a unique opportunity at present to address long-existing gender divides in the economy. If we don’t take advantage of this, we will see more gender segregation in the workforce, affecting wages and livelihoods, not to mention greater economic inequality in society as a whole,” added Zahidi. - ANA

(File photo: Gallo Images)