Change. Few words have the power to provoke such a strong reaction. Maybe it’s human nature; not many of us embrace the new – at least not all the time. It’s called your “comfort zone” for a reason.
Nonetheless, from technology to demographics, urbanisation to climate change, the world is becoming far more volatile, and this is creating challenges and opportunities anew for labour markets – not least in the public sector.
But by understanding – and even anticipating – these trends, government can craft the right policies and programs in response. Specifically, the public sector can help improve skills in the labour force, increase labour force participation, reduce gender imbalances, and enable an ageing workforce to remain productively engaged for longer periods of time. Not bad, huh? It’s exactly that kind of potential public impact that attracts talented people into government in the first place.
But where to start? In a report entitled Twelve Forces That Will Radically Change How Organizations Work, we recently analysed these trends and identified a dozen that will have the biggest impact on labour markets, including four that will have particular pertinence for all those who work in the public sector.
1. Automation approaching. A recent World Economic Forum report predicted that, by 2020, automation and robotics will have eliminated more than 7 million jobs – primarily in manufacturing and lower-level white-collar positions – in 15 of the world’s largest economies. Yet it will also create 2 million positions in emerging science, technology, mathematics and engineering (STEM) fields. Currently, there are not enough STEM graduates in the US and most developed markets to meet the coming demand.
This shift could exacerbate gender imbalances in the workforce. Roughly two-thirds of the job losses due to automation are in office and administrative fields, which are more likely to be filled by women. Moreover, women currently represent just 25% of STEM positions, compared to 40% of the overall global workforce, and school-age girls are typically less likely to pursue STEM subjects than boys.
The good news is that several organisations are taking steps to rectify this situation. For example, the Global STEM Alliance is an international group of government agencies, schools, companies and NGOs which fosters STEM disciplines in schools. Coordinated through the New York Academy of Sciences, the alliance includes a range of programmes to boost STEM education, some specifically for girls, and it aims to reach 1 million students in 100 countries by 2020.
But governments should also improve their education systems in terms of access and quality. Policymakers need to develop curricula that emphasise STEM skills and “social-emotional learning”. And vocational training should be a priority as well. Few technical and STEM jobs require a secondary degree in the relevant specialism; certifications and short-term programmes should be an area of focus, and governments can craft regulations and create incentives to support this shift.
2. Mind the skills gap. In 2015, 38% of global employers reported a shortage of highly-skilled workers, with the greatest shortfalls being in Asia and Latin America. This mismatch will create higher unemployment among low-skilled workers and vacant positions that companies cannot fill, ultimately hurting not only corporate performance but also the competitiveness of national economies. These shortfalls are projected to be highest in healthcare and IT, both very fast-growing sectors.
In response, companies are establishing their own “corporate universities” and certification programmes to develop their employees. In addition, state-funded universities in the US are launching similar programmes that allow people to develop new skills without formally enrolling in a degree programme.
And in addition to technical skills, the lack of “soft skills” such as teamwork, communication, and problem-solving will constrain employers. In a recent survey of employers by the Hay Group, 86% said they were concerned about retaining people with the right social and emotional skills, and 82% claimed that such skills are harder to find than technical competence. Thankfully, primary schools around the world are beginning to incorporate social and emotional learning into their curricula, and some countries, like South Korea and Singapore, are making it a standard part of how students learn.
3. The generation game. Demographic trends in most developed countries mean that the workforce is growing steadily older. In the US, nearly three in four baby boomers currently still working intend to stay in work past their retirement age. Moreover, 58% of people already in retirement intend to work in a new field. The result is a larger potential pool of talent, with experienced people willing to work under flexible terms (and, for some, at a below-market salary). However, companies will need to keep older workers trained and up to date on relevant skills.
Many public universities are now offering lifelong learning programmes to help individuals both enhance their skills and become more adept at marketing job candidates. The University of Arizona is a good example. The school has a strong continuing education programme, in which more than 10,000 people each year take classes, workshops, or other sessions in areas, ranging from engineering to sustainability to health and medicine.
4. Flexibility in focus. Flexible work such as telecommuting is a good example of the different preferences in work styles across the generations. Roughly 37% of US employees telecommute, and that number is growing. Flexible work is popular among employees – particularly younger employees – and it can help companies create more balanced workforces in terms of gender, by allowing both women and men to balance the requirements of a job with domestic responsibilities. Regrettably, women are still more likely than men to bear those responsibilities.
National governments need to craft the right policies and incentives, and gauge the adoption rate of these programmes. Sweden is a good example of what’s possible. Here, the government has deliberately taken on the issue by creating a “gender equality bonus” – about AU$2,400 – to give men an incentive to take parental leave. As a result, the country has one of the highest rates of women in the workforce in the EU.
By giving careful consideration to these issues, and crafting policies and programmes accordingly, governments and not-for-profits can make their countries more competitive, better serve their constituents, and create strong, vibrant societies that are prepared for whatever comes next.
One thing is clear, though: the clock is ticking. Failing to respond to a dramatically changing world virtually guarantees that societies and citizens will fall behind. The public sector needs to think through questions that will have far-reaching consequences, including how to spend public money effectively in order to create skilled workers for the future and how to solve gender inequality in society and the workplace.
J. Puckett, Senior Partner and Managing Director at The Boston Consulting Group, Dallas. Nithya Vaduganathan, Principal at The Boston Consulting Group, Boston.
This article was first published by the Centre for Public Impact.