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  • Sep 27, 2021

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Skills Economy is the Future

The COVID-19 pandemic has rapidly and drastically hastened the need for newer perspective on workforce skill-sets in the last year. Digitalization and remote work have imposed new expectations on employees, many of whom now require developed skills to move forward with substantial changes and new goals and priorities of the market. In order to fulfil the challenging demands, they also need the assistance of their companies and employers in developing the abilities that will make the company and its workers equipped to expand their skills to a larger magnitude. To tackle the deviated workforce responsibilities due to the pandemic, there are certain scopes for businesses that use an information-driven and human-centred approach in response to mechanisation and weakened economy. This can work wonders in swiftly up-skilling and reskilling their employees in preparation for future needs and transformations.

Knowledge and skill economy - The tussle

Clearly, the application and propagation of “knowledge economy” is slowly getting replaced by building of the “skills economy”, and we are seeing evidence of this. Acquiring information and knowledge has never been easier, owing to the advancement in technology. However, there is a difference between accessing knowledge and applying that in multitudes of practical context. In the coming years, it will be imperative that we learn how to transition from knowledge-based workforce management to skill-based ones.

Reskilling and up-skilling the workforce

As the dynamic shifts from a knowledge-based to a skills-based economy, many businesses are failing to adapt. The COVID-19 pandemic's economic disruption has altered the rate and dimensions of all transformations. The COVID-19 pandemic's economic disruption has altered the rate and dimensions of all transformations. It is now apparent that bridging skill gaps is of the utmost importance in all businesses. When it comes to addressing these gaps, the majority of respondents believe that expanding and advancing skill-sets of employees within the company is the most effective method. According to the findings, socioemotional and cognitive abilities like empathy, interpersonal skills, and flexibility have emerged as the most crucial qualities to cultivate to ensure success. There is an evident route for success with skill evolutions and substantial and organized efforts to support skill building, so that companies can reconstruct to match the pace of the rapidly changing work environments and can also adapt to newer demands of the economy. 

There is a problem, however, with the present educational and worker management systems. Most industries still place a high value on conventional educational methods, where learning gradually occurs for years, but the multi-dimensional and practical application of the knowledge is barely followed. The biggest mistake that employers can make during this shifting economy is hiring new employees with evolved skills rather than providing a methodical environment where existing employees can be reskilled and prepared to meet newly defined goals.

Fresh hiring or redeployment - The conundrum in post pandemic work environments

A large percentage of organisations are currently conducting more skill building and have decided to follow it for the coming years which is a significant increase from pre-pandemic levels. Over the past year, the practise of reassigning employees to new positions, which typically necessitates training, has become more common. Taking this into consideration, we require context-suitable learning that takes place in a real-world setting. For example, in a corporation compelled to restructure due to the global pandemic, the focus shifts to those tasks that are not possible to perform remotely and/or are susceptible to automation or have interminable practicality.

In the long run, redeployment of employees within a company is also less expensive than laying off and hiring and training new ones. Companies, following this method, need to train their current employees to migrate from susceptible to developing positions.

A majority of well-adapting companies during this pandemic have said that they were focusing on problem-solving, leadership and cognitive skills. There has also been a significant increase in the percentage of workers who believe their employers are focusing on social and emotional skills in the last year. Although humanistic approaches have been proven to increase productivity, monetary outcomes still influence major decision-making in most companies. However, it is important to realize that disposing of employees without planning for the future does not help any industry- neither financially nor socially. This must be avoided. The most effective way of emerging successful in these changing times is realizing that humanistic approach is not antonymous to a profitable outcome.

Additionally, digital skills have become of utmost importance, keeping in mind the pandemic. However, a majority of respondents believe that digital advancement, in isolation, yields less productive results rather than a combined and strategic model of digital, interpersonal and emotional skill building.

Maximising efficiency whilst reskilling employees

In spite of the positive response that skill transformation has been receiving, the successful execution of it is not very easy to maintain. There are several components that need to be adhered to, to maximize skill economy. Firstly, the companies need to study their workforce in detail, to recognise the skill gaps and facilitate an environment to bridge the gap between the present supply and the future demands of the economy. The next step to skill development is strategizing and building infrastructure to support the employees during retraining and redeployment. Lastly, the employers need to monitor the growth and transition of skills and apply the same in a larger scale, throughout the industry. 

When it comes to skill development and training, it is evident that employing bold and effective changes is the only way for the industries to survive in the future. After a year of learning and applying lessons learnt from the pandemic and fluctuating economy, it is now time for the enterprises to invest in skill transformations and identify their present skill gaps and future skill demands. Organizations must adopt a comprehensive approach to avoid converging all of their focus on digital advancement and hard skills, but should diligently work towards sharpening soft skills (primarily, leadership, empathy and interpersonal) to emerge successful in these trying times.

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