The “Future of Jobs” 2023 report by the World Economic Forum analyzes the transformation of jobs and skills over the next five years. In order to explore this, they consider what has preceded, so in observing the last three years, they noted a combination of health, economic, and geopolitical challenges, along with growing social and environmental pressures.
Naturally, these factors have reshaped global labor markets and influenced the demand for jobs and skills of the future. The Fourth Industrial Revolution, changing expectations of workers and consumers, and the need for a green transition have also impacted how the workforce looks and created a demand for new jobs and skills for the following years.
Drivers of labour market transformation
The survey revealed that various factors, such as the green transition, technological advancements, supply chain transformations, and changing consumer expectations, are creating demand for new jobs across industries and regions. However, these positive drivers are counterbalanced by growing geoeconomic tensions and a cost-of-living crisis.
New technologies, digital access, and the broader application of ESG standards are the most likely trends to drive transformation in organizations. Macroeconomic factors such as rising cost of living and slow economic growth also play a significant role. Businesses anticipate that most disruptions will have a positive effect on employment, with investments in the green transition, ESG standards, and localized supply chains driving job growth. However, technological advancements and increased digital access may result in job displacement in some companies. Economic challenges, changing economic geographies, and the green transition are expected to impact job markets significantly. Additionally, technology adoption, including big data analytics, AI, and digital platforms, is expected to create new jobs. The human-machine frontier is evolving, with 34% of business-related tasks currently performed by machines.
Macrotrends and technology are expected to have a mixed impact on job creation and destruction in the next five years, affecting various job categories and industries. The analysis estimates that’s approximately 23% of surveyed companies will have a change in labor markets across the next five years, so 23% of the current workforce is expected to experience job movement, including both new roles and job eliminations. The report identifies higher-than-average changes in the Supply Chain and Transportation, Media, Entertainment, and Sports industries, while lower-than-average changes are expected in Accommodation, Food and Leisure; Manufacturing; Retail, and Wholesale of Consumer Goods. Technology-related roles, such as AI and Machine Learning Specialists, are expected to grow rapidly, while clerical and secretarial roles are expected to decline. The report estimates that 69 million jobs will be created, and 83 million jobs will be destroyed. The analysis also identifies seven groups of related jobs that will be collectively impacted by similar trends, including digital access and digital trade enabled jobs, energy transition and climate change mitigation jobs, advanced technology jobs, education jobs, agriculture jobs, repairers, factory workers, laborers, and supply chain and logistics jobs.
What are the current skills needed for work and their expected importance in the next five years? The report indicates that skills disruption is increasing, but at a slower pace than expected due to COVID-19. Analytical thinking and creative thinking are identified as core skills, along with self-efficacy skills and working with others. The research revealed the growing importance of cognitive skills, technology literacy, and socio-emotional attitudes. There is also a need for effective reskilling and upskilling strategies to address skills gaps.
Organizations reveal that ‘skills gaps’ and ‘difficulty attracting talent’ as major barriers to industry transformation. Specifically, locally bridging ‘skills gaps’ and ‘attracting talent’ are key challenges for 60% and 53% of companies, respectively. Talent availability is a top barrier for most industries except Research, Design, and Business Management Services. However, in the Electronics, Automotive, and Aerospace sectors, attracting talent is the most significant challenge. Media, Entertainment, and Sports companies also highlight a lack of leadership understanding as an obstacle, but SMEs are less likely to view skills gaps as a barrier compared to larger corporations.
In terms of workforce strategies, there is focus on learning and training on the job and process automation. A large portion of companies plan to transition staff to growing roles, with few expecting major workforce reductions.
The report revealed that improving talent progression and promotion processes is seen as the most promising way to increase talent availability. Work experience evaluation is the top skill assessment during hiring, followed by skill assessments and university degrees.