Reskilling in the AI era

ARTICLE | May 27, 2023

Reskilling in the AI era

Companies are no stranger to the need for new skills in the face of new technologies. But the pace of AI’s impact brings new urgency

By Betsy Streisand, Workflow contributor

When cloud storage heavyweight Dropbox recently announced it was laying off 500 workers, the main culprit was a technology that is dominating news headlines around the world: AI, particularly the new pressures from generative AI that are speeding up tasks and bringing the potential to change the way people work. “The AI era of computing has finally arrived,” wrote Dropbox CEO Drew Houston in a memo to employees. Given the head-spinning pace of change from new AI technologies, the Dropbox CEO said, the company wasn’t set up with the right mix of talent. “Our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development,” he wrote.

Dropbox is by no means alone: IBM recently announced it would replace nearly 8,000 mostly back-office jobs with AI and eliminate hiring on many thousands more, within the next five years. Companies are seeing AI’s impact on jobs.

Every advance in technology results in a call for new skills. And while many experts agree generative AI will eliminate some jobs, particularly for knowledge workers, it will also create new opportunities for businesses. In the era of AI, companies will need to prepare and train existing workers for different roles in order to stay competitive.


Future proof your workforce

Companies that get reskilling right have a better shot at futureproofing their workforce and can more easily negotiate rapid technological change. Those that don’t get it right risk being left in the dust—and paying the price. According to IDC, by 2025, 90% of organizations will be beset by IT skills shortages, at a cost of $6.5 trillion globally due to delayed product releases, diminished customer satisfaction, and loss of business.

“The failure to reskill will increasingly impact an organization’s bottom line,” said Lloyd, since it will lead to higher turnover, which is costly on multiple levels. It’s not just about the additional costs of recruiting and training new hires, or the potential for roles to stay open if a position isn’t quickly filled, but also the time it takes for new employees to ramp up and be fully productive.

Instead, says Bryan Seegmiller, a finance professor at the Kellogg School of Management at Northwestern University, “firms can better invest in teaching people how to work with these tools and develop skills because they already have relationships with their coworkers and their company. It’s very costly to bring someone in and teach them everything on top of how to work within this particular company.”

Many of the people in today’s jobs have incredible foundational skill sets that will help them be successful in the jobs of the future.

Tanyth Lloyd, global vice president of technology and transformation at Korn Ferry, agrees. “Reskilling is absolutely critical to retain highly skilled workers,” she says. What’s more, “organizations with a demonstrated track record of reskilling will have a significant edge when it comes to attracting new talent.” 

Once reskilled, employees can successfully tackle new work challenges. That’s important because lack of career growth is a big driver of turnover across industries. Employees who feel they have the potential for growth and advancement are less likely to leave an organization, according to the US Chamber of Commerce.

Seeing into the future may be a fool’s errand, but it’s clear that AI will play a central role, at least for the longer-range near-term if not for the long haul. According to an analysis of global workforce data conducted by ServiceNow and Pearson, 23.5 million US workers are in jobs that will be affected by AI by 2027, requiring them to be retrained or reskilled. The study found that  AI’s impact on jobs in certain industries will be greater, resulting in the need to reskill more than others: finance and insurance sectors; professional, scientific, and technical services; and the education, travel, retail, and telecommunications industries.

In this evolving context, which roles should evolve and which ones be given to the machines? It’s important for leaders to keep the huge potential for productivity gains top of mind. Northwestern’s Seegmiller, who expects to see AI increase productivity, believes that this shift is an opportunity to move toward critical thinking and reasoning, versus focusing solely on monotonous, routine tasks.

“Opportunities are opening up even as AI takes some of the mundane tasks out of the picture that a human might do,” says Amy Regan Morehouse, ServiceNow’s senior vice president overseeing global education and the company’s Rise Up initiative. Even though the transformation of some careers may be inevitable, “many of the people in those jobs today have incredible foundational skill sets that will help them be successful in the jobs of the future, as well,” she says.

Another way to think of it is that AI will take on the skills that machines are good at, so people no longer have to work like machines. A future of jobs report by the World Economic Forum echoes Seegmiller, noting that “cognitive skills” will be in the greatest demand, with analytical thinking, creative thinking, and “resilience, flexibility, and agility” topping its list.

These skills will matter in the most business-critical roles of 2023, which according to ServiceNow analysis, will include product owners, data analysts, technical project managers, platform owners, change/adoption specialists, help desk support agents, machine learning engineers, and flow automation engineers.

For leaders, this is an opportunity to address the growing skills gap by supporting their workforces, reskilling employees into purpose-rich careers.

But reskilling and training workers for important and expanding tech roles will require innovative thinking, according to Pearson, which paired with ServiceNow to research AI’s impact on the workforce of today—and tomorrow. Their analysis found that leaders can take action now to plan their future-ready talent strategy, and should begin by embracing digital transformation as a whole, rather than focusing on one-off training as needs arise for individual projects.

Leaders can begin by examining opportunities to reskill their general, non-tech workforces, says Leonardo Freitas, a research manager in IDC's European skills practice. When deciding which non-tech roles may be well suited to reskilling, he counsels leaders to consider whether the knowledge, skills, and personal attributes required are a match, with little to no gaps. The similarity of the environment where the job is performed is also an important factor, as are salary equivalence, future role growth, and low automation within the target role, according to Freitas: “If you're able to provide non-IT workers with tools to actually aid in the digital transformation process, that will be a game changer.” Leaders should also consider whether workers already in tech roles, who have valuable transferable knowledge, skills, and attributes, can be reskilled into low automation roles.

While every company has its own unique needs, ServiceNow analysis points to a few good example candidates for reskilling.

90% of organizations will be beset by IT skills shortages by 2025

Based on matched skills, knowledge, and attributes, sales worker supervisors, administrative assistants, and bookkeeping and audit clerks could be reskilled into help desk/support agents. Similarly, IT operations technicians, IT and telecommunications professionals, and web design and web development professionals could be reskilled as change and adoption specialists, a good job fit that matches skills, knowledge, and attributes.

Leaders should look for similar opportunities for reskilling in their organizations, and center on a predictive approach to retraining and identifying skills gaps, all while remaining cognizant that both the technology—and the changes it will bring—will continue to shift.


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Betsy Streisand is a longtime business journalist who has worked for the public radio business show Marketplace, US News & World Report, and USA Today. Her work has also appeared in the New York Times. She is a graduate of Temple University and lives in Washington, D.C.

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