Entering an Age of Occupational Transitions:
COVID-19 has reshaped the world in ways that will endure long after the end of the pandemic but most significantly, it has acted as a catalyst in accelerating the world economy towards the new industrial revolution, commonly referred to as ‘Industry 4.0’. Globally, automation is accelerating, e-commerce is soaring, and the practice of telecommuting (i.e., Work from Home) is here to stay. Future job growth will therefore be concentrated on high-skill roles, while middle and low-skill jobs decline due to redundancies. Resultingly, the job landscape is being reshaped and thus creating an urgency amongst organizations to retool current and recruit future-ready employees for the challenges ahead.
As organizations pivot to respond to unprecedented challenges, there has never been a more opportune moment to get the future of work right. Now many business leaders face a suite of structural changes related to the nature of work, the workforce, and the workplace. To succeed in this new digital age, businesses will have to make tough yet sound decisions in balancing business outcomes and talent impacts over the short and long-term. With this, it is pertinent to understand what skills most are needed at present and in the near future. Moreover, how ready is the business landscape in Malaysia to embrace necessary changes? Through July 2021, Aon and Propay Partners conducted a joint study to understand views on companies in Malaysia on the Future of Work - particularly their talent priorities, the state of current employee skills and available plans on improving their readiness for the Future of Work.
The Changing Nature of Work:
The first industrial revolution utilized the power of steam to mechanize production. The second brought rise to mass production thanks to the utilization of electricity. The third allowed us to automate our production lines through the usage of informational technology. Now, the fourth industrial revolution will herald a new age of automation by building on the third. The new age will change the way we work in many ways. According to McKinsey, automation could displace up to 4.5 million workers in Malaysia by 2030. With the right investments, however, firms may capitalize on this shift in creating more high value jobs to replace those that are lost to redundancies. In line with this, results from our study indicate the following areas as priority amongst companies in Malaysia
Diving into observations from the study, an overwhelming majority of these companies agree that the changing nature of work and consequent need for new skills play a significant role in creating the skills shortages and competency deficits in their respective organizations. Amongst them, 90% of respondents have noted that problem solving and creativity as the biggest deficit in their job applicant pools, while 80% of the respondents noted that there is a lack of applicants with critical thinking ability. In the future, skills such as critical thinking, the ability to innovate and imagine possibilities are most in demand. Organizations thus have to prepare for new divisions of labor by matching their mission, culture, vision, and values to the needs of an ever-changing workforce. This in turn compels the prioritization of continuous upskilling and learning as organizations build workforces that equipped with the necessary skillsets to tackle the hurdles of tomorrow.
Source: https://www.mckinsey.com/featured-insights/asia-pacific/automation-and-adaptability-how-malaysia-can-navigate-the-future-of-work
https://www.businessinsider.com/what-jobs-and-industries-could-be-taken-over-by-robots-2019-4
Educational Requirements Today are Much Different from those at the Turn of the Century and will Differ Greatly in the Future:
An overwhelming 86% of firms polled responded that they are struggling to find qualified applicants to fill their vacancies. In the past decade, higher education enrollment has been steadily increasing, but why are organizations still struggling to hire the workers with the skillset they require? Gone are the days where pure academic qualifications were the sole indicator of a candidate's potential in a potential job. Reading, writing and academic excellence was all it took for someone to make it in the world. Indeed, the prevailing view by Malaysian companies seems to be that while higher education institutions are good at providing basic technical knowledge, they do not adequately address gaps in future-ready skills.
The future of work faced today by a fresh graduate is significantly different from those encountered by graduates of past generations. This is due to reduced structure and unpredictability in career paths, coupled with uncertainty about whether to invest in a particular skill set today and would it be valuable in the next 20 years. To ensure the next generation of employees are workplace ready, higher education institutes alongside fresh graduate/work placement programmes at companies must restructure their curricula to better recognize the emerging core skill sets which are pertinent for the future of work, optimizing them to meet today’s growing job demands.
The most important skill to acquire may be the ability to learn effectively. A big part of the problem is the general inability to acquire and retain considerable amounts of information. Individuals wish to be as knowledgeable as possible. Therefore, learning effectively is a crucial first step which would simultaneously aid in fostering evergreen skills such as analytical skills, creativity, and the ability to handle and process information. This in return becomes enables to the development of new abilities and future skills needed throughout their lifetime. Moreover, an inclination from employees and a commitment to investing by employers for lifelong learning are also critical in the development of a future-ready workforce.
Source: https://www.theglobaleconomy.com/Malaysia/Tertiary_school_enrollment/#:~:text=Malaysia%3A%20Tertiary%20school%20enrollment%2C%20percent,of%2046.76%20percent%20in%202016.
https://www.thestar.com.my/metro/metro-news/2021/08/02/fresh-grads-advised-to-acquire-new-skills-to-enhance-employability
Industrial-Led and Service-Based Companies Differ in Offerings but Seek Similar Future Skills/Build Similar Competencies:
While the service and industrial sectors may broadly have dissimilar needs and challenges, with respect to the “Workforce of the Future”, both services based and industry-based companies share congruent priorities. Our results suggest that the highest skill that is lacking in terms of behavioral skills through recruitment efforts is critical thinking. Moreover, both sectors from our study highlight the biggest areas of soft skills needed are critical thinking and problem solving. Regardless of economic sector, companies are building congruent capacities particularly as it relates to technology competence such as programming ability.
Therefore, these industries may differ in what they have to offer. However, the changing times are shining light on the one issue they are facing and that is whether the job is technical or not, the need to have highly skilled employees who are able to think critically and are natural problem-solvers are crucial skills for the workforce to gain a competitive advantage in the economy.
Budgetary Constraints amid the Covid-19 Pandemic may Create a Gap Between those Firms which are Future-Ready and those which are not:
Due to the pandemic, many workers were abruptly forced to shift their workplace into their own homes. Indeed, some large global firms such as HSBC, Deutsche Bank and Lloyds are now planning to embrace a hybrid structure post-Covid-19. Human capital development will in turn have to accommodate and restructure to include post-Covid-19 hybrid structures in order to move forward and gain advantage in the future workforce.
However, are Malaysian companies ready for this change? When asked whether budgets and strategies for human capital are changing to meet the challenges of recruiting difficulty and skills shortages, 52% of our respondents responded positively, whilst the remainder remain uncertain citing economic limitation and budgetary constraints. Results indicate that while some Malaysian companies are already changing to adapt to future needs, many have yet to take the necessary steps. Nevertheless, all the respondents agree that further investment into human capital is needed to close the gap in skills mismatch and to ensure that their company is future ready as seen in the figure below. This may pose significant consequences for the business landscape in Malaysia where there exists bifurcation amongst companies that are able to keep up and adapt to future needs versus those who cannot or are unable to keep up and ensure future readiness.
Conclusion
Are companies in Malaysia ready for the future of work? Our study suggests that companies in Malaysia are well aware and aspire to bridge gaps in skills that may exist between them and leading market players in their specific industries. However, efforts may be hampered by financial and structural constraints, such as not having an adequate budget to improve on their learning and development capabilities – the impact of which would be exacerbated by economic challenges surrounding the COVID-19 pandemic. A bifurcation amongst companies in Malaysia depending on their capability to make the necessary improvements and keep pace with requirements of the fourth industrial revolution may prove to be significant as to whether Malaysia as an economy remains competitive regionally/globally and to whether the country can achieve its long-held goal of being recognized as a developed nation.
