The Future Workforce will be Built on Capabilities, not Skills. Here are the Top 7.

  • DeakinCo. - Angela Girton, Senior Manager, Australia & NZ Markets
  • 1 March 2021

While the conversation around the future of the workforce and remote work may now be top of mind for many people as result of COVID-19, for Marcus Bowles, Director of the Institute for Working Futures (IWF), this has been the subject of his research for over 30 years.  

 

Marcus’s work is centred on forecasting and building capabilities for workforces that don’t yet exist and enabling his clients to be more agile and responsive to change. Marcus has worked closely with DeakinCo. in building capability frameworks to meet current and future workforce needs. 

 

We sat down with Marcus to get his insights and perspective on what the future holds, on the major mindset shift that business leaders need to adopt and the capabilities that will underpin the workforce of the future.  

  

Break away from the old mindset 

 

The biggest issue facing organisations as they plan for the workforce of the future is that they are using methods of the past.  

 

Most Learning and Development (L&D) programs are focussed on making people competent in their current job and on preparing them for their next succession. They are operating in an outdated model of fitting people to jobs and are not thinking strategically enough about the future and who will they need for that future.  

 

“The post-pandemic workforce is urging organisations to move away from a narrow jobs-focus to a more holistic view of the organisational capabilities required to seize future success”, shares Marcus. 

 

“It’s going to look vastly different, even two years from now. With the rate of technological advancement, and in particular technological adoption spurred on by COVID-19, not only is job automation going to be upon us quicker than we had imagined but many of the jobs being lost will be gone from the economy forever.” 

The risk here is that if organisations continue to focus and assess employees purely against their current role and job family vertical, they risk losing talent and undervaluing capabilities required for emerging roles. The new model calls for an entirely new approach.  

 

What does the capability model look like?  

 

The first phase of strategic workforce planning and building L&D programs is for organisations to know what their core future capability needs are, to determine the future-readiness of their workforce, and to prioritise the staff development or hire activities required to fill the gaps. 

 

According to Marcus, the biggest cost of transformation projects is the social and budget cost of redundancies.  

 

Leaders do not have access to meaningful data on each person’s innate capability beyond the job they do today so their potential to fit the workforce of the future is undervalued, which results in people being let go who could and should have been kept. The greatest value to any workforce is its future potential, in particular to seize opportunities, adapt at speed and improve the customer experience.  

 

Marcus explains: 

 

“There is a well of untapped potential within organisations that leaders currently aren’t seeing or assessing. This is going to drive up redundancies and recruitment costs when in actual fact there are people with real capabilities already within the business who can fill new roles, yet their abilities have never been analysed beyond for the job that they’re in. 

 

In this model, organisations look at the capabilities that make up a job and then cluster jobs together into ‘job neighbourhoods’ or ‘capability clusters’ where people can work in multiple roles based on their core capabilities, rather than in a single vertical determined by their degree or technical discipline. 

 

One organisation we worked with had 1200 competencies recorded for its 25000 people. When we finished with them, they had eight capabilities that they knew would deliver 70% of all of their productivity and deliver the agility they needed to be prepared for the future.” 

 

Seven core capabilities for the future workforce: 

 

Both DeakinCo.’s and IWF’s research shows that 70% of all future job profiles in the non-technical area, will be made up of human-centred capabilities.  

 

L&D leaders who are leading the charge are focussing on the following core capabilities:  

 

  1. Adaptive mindset – an adaptive mindset encapsulates resilience. It enables individuals to pivot their thinking in times of change, to approach challenges as opportunities and to bounce back from setbacks with ease. Given the current climate of uncertainty and the rapid rate of technological advancement, this will be an indispensable capability.  
     

  1. Collaboration – As organisations move to a more floating workforce with an increase of freelancers and contractors, the ability to collaborate with new people from across a variety of areas will be of paramount importance.  
     

  1. Problem solving – Change brings expanding levels of complexity, variability and ambiguity. Organisations will need more people than ever who can think critically and creatively to solve problems within an ever-changing environment. 

 

  1. Self-management – The more blended the workforce becomes and the more the gig economy grows, the more essential the ability to self-manage becomes. Organisations will want to ensure their people are self-driven and connected to their why.  
     

  1. Digital literacy – The ability to access, create, publish, share and apply information through digital means. One of the more encouraging work-related outcomes of 2020 was that a large portion of the workforce who used to ignore technology has now embraced it and through self-learning and application developed a much higher level of digital literacy.  
     

  1. Data fluency – The ability to use, explore, analyse, interpret and communicate data in a meaningful way, to drive decision making. Data fluency challenges organisations to move away having a select few gatekeepers of information and instead an entire workforce that is able to interpret and use data effectively. 

 

  1. Ethics and risk management – This is going to become non-negotiable as the workforce becomes more distributed. Organisations are going to have to make sure they have processes for risk management in place but also ensure they are working with people who understand and practice ethical decision making.  

 

This does not mean that organisations stop focussing on skills and competencies. “What it does mean,” shares Marcus, “is that when we’re planning a workforce, we want to be looking at the few areas that will have the most impact rather than diluting our focus across a myriad of competency or skill descriptors that will have diminished relevance to work of the future”. 

 

What are the steps organisations can take to prepare for the future of work? 

 

Organisations that were already agile, were able to use this trying period to accelerate their major change and automation projects and realign their workforce. Others will have realised how wide the gap is between where they are and where they need to be. 

 

A positive outcome is that more businesses have become aware of the need to shift into a capabilities-focussed mindset. For those who do not have established processes for formally and effectively assessing capabilities, below is a guideline for the essential steps: 

 

  • Audit your workforce and establish a baseline of existing capabilities  
  • Profile these against the future workforce you think you need (2 - 5 years out) 
  • Look at the immediate gaps of the people by capability not job role 
  • Issue micro-credentials to those who do have the capabilities as a formal form of validation. 
  • Begin to skill those who don’t fit the future workforce into career streams outside of the organisation 
  • Establish a capabilities index that gives you a birds eye view of your organisation’s capabilities and enables you to profile and select internal talent by. 

 

The benefits of this model are huge, including a major reduction in redundancies, improved retention rates and redeploying knowledgeable and valuable talent within the business rather than letting them go, because their specific role is no longer relevant. 

 

This is a new way of thinking about workforce development. The challenge posed to organisations and the talent industry as a whole is to let go of the vested interests they have in keeping things the same.  

 

“Recruiters and HR personnel are trained to recruit and select employees against job descriptions and promote candidates to employers based on their ability to do and fill a specific role today. Moving to the capabilities model may necessitate a rebuild of processes, systems, platforms and behaviour. It requires a full paradigm shift”, shares Marcus. 

 

But this is no longer a nice-to-have. Businesses must start changing the way they assess their employees and their workforce needs or risk falling behind in their ability to construct effective teams, attract the best talent and as a result to effectively deliver their products and services in the future.