The Labour Market: Are you prepared for the tsunami?

There is a broad consensus among economic and HR experts as to the profound social and business transformation we are currently experiencing.
Some initial data strike me as interesting and as an incentive for us to reflect upon and put into practice.
One of the conclusions from the Davos Forum’s 2016 edition indicates that we are entering the “4th industrial revolution”, in which robots and talent will play a key role, as described by Raúl Grijalba (CEO of Manpower) in his interesting article on the subject (http://ow.ly/ZTJOg).

In his latest study, McKinsey&Company suggest that, to a greater or lesser extent, approximately 50% of jobs are susceptible to being automated in the next few years (http://ow.ly/ZOnLm).

Other specialists such as Nacho de Pinedo (CEO of ISDI) claim that we are not in an era of change, but rather in a change of era (http://ow.ly/ZTHRu) and that we are shifting from an industrial revolution to an information revolution.

Keys to understanding the new labour market

The impact on the labour market is, therefore, very significant and, in my opinion, there are five main significant effects

The Labour Market

1. A shortage of talent and imbalances in supply and demand, according to studies published by Manpower (http://ow.ly/ZOlrn) and, in parallel, the destruction of employment, somewhere between 5 and 7 million jobs worldwide by 2020 (http://ow.ly/ZNwmF)

The response to such challenges, however, allows room for improvement: in my opinion, training systems are not being adapted with the sufficient agility and pragmatism to the labour demands of the future and focus more on qualifying people for specific professions (which, at times, is difficult to predict) and less on providing them with personal attitude and professional skills.

2. New jobs and attitudes: professions are emerging in new employment sources  as indicated in Adecco’s study “The future of employment” (http://ow.ly/ZOm3i) and roles that not adapted to new market demands either disappear or drastically decrease according to a study by Randstad in which 41% of Spaniards consider their jobs to be in danger of automation in the next  5 years (http://ow.ly/ZOnm4).

New capabilities and professional skills will be required to ensure competitiveness, as forecast by experts like Nekane Rodriguez (a director at Lee Hecht Harrison) in her reports on the labour situation in 2020 (http://ow.ly/ZOpIj).

And there are also the millennials with their new values relating to the labour market who are forcing many organizations to adapt their people management policies in a global context of decreasing work engagement.

3. New organisation of work, both in terms of job formats (telecommuting, co-working, part-time employment…) and the significant increase in people who are no longer self-employed in the “traditional” sense of the term, such as freelancers (more than 50 million and 33% of the active population in the USA, http://ow.ly/ZTEaG) or entrepreneurs (tens of thousands around the world http://ow.ly/ZTGDE).

4. Differences in compensation: the people with greater employment opportunities are, on the one hand, the most versatile and highly qualified professionals and, on the other, less qualified workers in jobs with low risk of automation. Differences in salary are increasing between hierarchical levels and there is pressure to reduce employment in jobs with “low differentiation or added value” and in middle management.

In Spain the percentage of so-called thousand-eurists is close to 70% according to data from the Inland Revenue (http://ow.ly/10d2Jo), thus reflecting an economy that needs to increase its investment in leading sectors.

5. Low employment growth in the West: a situation of high unemployment (over 15% in many countries) coexists with the difficulties of job coverage in multiple areas due to a lack of professionals with the required technical skills and personal attitudes.
According to Jordi Goula, Spain’s GDP has grown 40% from the crisis minimum, but employment only 20%

Como indica Jordi Goula el PIB en España crece un 40% desde el mínimo de la crisis pero el empleo solo un 20% (http://ow.ly/10lgSZ) and many labour market experts claim that it will take several years to reach the levels of unemployment of 2007.

In the face of such potential risks, opportunities are arising such as the collaborative economy, in which 5 key sub-sectors (P2P funding, P2P accommodation, online recruitment, car-sharing and video and music streaming) will significantly increase profits and employment in the next 10 years, according to PWC.

How do professionals react to this reality?
In the past years, at Sanofi, I have been fortunate enough to carry out the intense task of selection in commercial positions within the pharmaceutical sector. After assessing several hundred candidates, I have come to conclusions which I believe may be extrapolated, with some variations, to other sectors, as confirmed by a number of HR colleagues and head-hunters with whom I have shared my reflections.

-There is a shortage of talent adapted to the future profiles required, albeit in varying degrees, depending on job types and the level of demand in terms of the necessary skills. This has been detected both in the context of new roles and more traditional roles demanding new capability profiles, which requires companies and employees to make a greater joint effort in updating skills.
-Now, the successful professional is not just someone who works well and shows expertise in his or her area. Increasingly, what makes the difference, both in terms of managers and employees, are their capabilities and skills, some of which I have listed below.
-The past few years of restructuring and uncertainty have increased the “fear of changing companies”.
This is a clear trend in candidates who have worked for over 8-10 years in a company, even in clear cases of better labour offers in terms of compensation, roles or company reputation. This is particularly evident in countries such as Spain where severance packages significantly increases depending on seniority.

Conclusions
“The labour market is broken and needs to be reconfigured. As the old pieces disappear, a new 21st century labour world is emerging.” This reflection from the Manpower study “Human Age 2.0” is a valuable reflection on the changing labour scenario in a world that is increasingly competitive, demanding and exciting.

In the coming years, the labour market faces evident threats but, at the same time, there are more options and potential equal opportunities than ever, due to, among other reasons, technology, easy access to knowledge and improved educational systems.

The challenge for companies and professionals will be to surf the wave of a tsunami that is already here in order to increase competitiveness, productivity, employability and happiness at work.

David Reyero Trapiello

Senior HR Business Partner – Sanofi Iberia
e-mail: David.reyero@sanofi.com  / Twitter: @davidreyero73 / Linkedin: es.linkedin.com/in/reyerodavid

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