Skip to content

Reskilling in the Age of AI

Here is an excerpt from an article written by Jorge Tamayo, Leila Doumi, Sagar Goel, Orsolya Kovács-Ondrejkovic, and Raffaella Sadun for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

Credit:  Noma Bar             

* * *

Here are five new paradigms for leaders—and employees.

Back in 2019 the Organisation for Economic Co-operation and Development made a bold forecast. Within 15 to 20 years, it predicted, new automation technologies were likely to eliminate 14% of the world’s jobs and radically transform another 32%. Those were sobering numbers, involving more than 1 billion people globally—and they didn’t even factor in ChatGPT and the new wave of generative AI that has recently taken the market by storm.

Today advances in technology are changing the demand for skills at an accelerated pace. New technologies can not only handle a growing number of repetitive and manual tasks but also perform increasingly sophisticated kinds of knowledge-based work—such as research, coding, and writing—that have long been considered safe from disruption. The average half-life of skills is now less than five years, and in some tech fields it’s as low as two and a half years. Not all knowledge workers will lose their jobs in the years ahead, of course, but as they carry out their daily tasks, many of them may well discover that AI and other new technologies have so significantly altered the nature of what they do that in effect they’re working in completely new fields.

To cope with these disruptions, a number of organizations are already investing heavily in upskilling their workforces. One recent BCG study suggests that such investments represent as much as 1.5% of those organizations’ total budgets. But upskilling alone won’t be enough. If the OECD estimates are correct, in the coming decades millions of workers may need to be entirely reskilled—a fundamental and profoundly complex societal challenge that will require workers not only to acquire new skills but to use them to change occupations.

Companies have a critical role to play in addressing this challenge, and it’s in their best interests to get going on it in a serious way right now. Among those that have embraced the reskilling challenge, only a handful have done so effectively, and even their efforts have often been subscale and of limited impact, which leads to a question: Now that the need for a reskilling revolution is apparent, what must companies do to make it happen?

In our work at the Digital Data Design Institute at Harvard’s Digital Reskilling Lab and the BCG Henderson Institute we have been studying this question in depth, and as part of that effort we interviewed leaders at almost 40 organizations around the world that are investing in large-scale reskilling programs. During those interviews we discussed common challenges, heard stories of early success, and discovered that many of those companies are thinking in important new ways about why, when, and how to reskill. In synthesizing what we’ve learned, we’ve become aware of five paradigm shifts that are emerging in reskilling—shifts that companies will need to understand and embrace if they hope to succeed in adapting dynamically to the rapidly evolving era of automation and AI.

In this article we’ll explore those shifts. We’ll show how some companies are implementing them, and we’ll review the unexpected challenges they’ve encountered and the promising wins they’ve achieved.

[Here’s the first of five new paradigms.]

[  1  ]

Reskilling Is a Strategic Imperative

During times of disruption, when many jobs are threatened, companies have often turned to reskilling to soften the blow of layoffs, assuage feelings of guilt about social responsibility, and create a positive PR narrative. But most of the companies we spoke with have moved beyond that narrow approach and now recognize reskilling as a strategic imperative. That shift reflects profound changes in the labor market, which is increasingly constrained by the aging of the working population, the emergence of new occupations, and an increasing need for employees to develop skills that are company-specific. Against this backdrop effective reskilling initiatives are critical, because they allow companies to build competitive advantage quickly by developing talent that is not readily available in the market and filling skills gaps that are instrumental to achieving their strategic objectives—before and better than their competitors do.

In recent years several major companies have embraced this approach. Infosys, for example, has reskilled more than 2,000 cybersecurity experts with various adjacent competencies and capability levels. Vodafone aims to draw from internal talent to fill 40% of its software developer needs. And Amazon, through its Machine Learning University, has enabled thousands of employees who initially had little experience in machine learning to become experts in the field.

The average half-life of skills is now less than five years, and in some tech fields it’s as low as two and a half years. For millions of workers, upskilling alone won’t be enough.

Some companies now consider reskilling a core part of their employee value proposition and a strategic means of balancing workforce supply and demand. At those companies employees are encouraged to reskill for roles that appeal to them. Mahindra & Mahindra, Wipro, and Ericsson have policies, tools, and IT platforms that promote reskilling resources and available jobs—as does McDonald’s, where restaurant employees have access to an app called Archways to Opportunity that maps skills learned on the job to career paths within the company and in other industries.

Finally, some companies are using reskilling to tap into broader talent pools and attract candidates who wouldn’t otherwise be considered for open positions. ICICI Bank—headquartered in Mumbai and employing more than 130,000 people—runs an intense, academy-like reskilling program that prepares graduates, often from diverse backgrounds, for frontline managerial jobs. The program reskills some 2,500 to 4,000 employees each year. CVS used a similar approach during the Covid-19 pandemic to hire, train, and onboard people (some of them laid-off hospitality workers) to create capacity for its critical vaccine and testing services.

* * *

Here is a direct link to the complete article.

Jorge Tamayo is an assistant professor in the Strategy Unit at Harvard Business School.
Leila Doumi is a PhD candidate in the Strategy Unit at Harvard Business School.
Sagar Goel is a managing director and partner at Boston Consulting Group, Singapore, and a fellow at the BCG Henderson Institute.
Orsolya Kovács-Ondrejkovic is an associate director at Boston Consulting Group, Zurich, and an ambassador at the BCG Henderson Institute.
Raffaella Sadun is the Charles E. Wilson Professor of Business Administration at Harvard Business School and a co-chair of its Managing the Future of Work project.


Posted in

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll To Top