McKinsey survey reveals that while companies have enough employees with basic cognitive and physical skills, they face acute shortages in advanced technological capabilities
A recent survey by consulting firm McKinsey of over 1,100 C-suite executives across five countries paints a concerning picture of the current and future state of workforce skills. The findings reveal that companies are already grappling with significant skills gaps, particularly in technological, higher cognitive, and social and emotional domains. Worryingly, executives expect these shortages to worsen in the coming years as automation and AI reshape the job market.
The survey results show that about one-third of respondents report a shortfall in critical skills areas. While companies have enough employees with basic cognitive and physical skills, they face acute shortages in advanced technological capabilities. Specifically, executives cited deficiencies in areas like advanced IT skills, programming, data analysis, and mathematics.
Higher cognitive skills such as critical thinking, problem-solving, and complex information processing are also in short supply, with 40% of respondents pointing to a lack of workers with these abilities. These skills are increasingly essential for employees to work effectively alongside new technologies.
Looking ahead to 2030, more than a quarter of surveyed executives fear that failing to acquire the necessary skills could directly harm their company’s financial performance and hinder their ability to leverage the full value of AI. To address these challenges, companies are pursuing a multi-pronged approach, with retraining emerging as the most widely reported tactic.
On average, executives plan to retrain 32% of their workforce, with the automotive industry expecting to retrain an even higher proportion at 36%. Hiring and contracting are also being used to fill skills gaps, with executives aiming to hire 23% of their workforce and contract 18% on average.
To navigate this rapidly evolving skills landscape, McKinsey recommends that business leaders focus on four key priorities:
- Understanding the potential of automation technologies and their impact on roles and skills requirements.
- Planning a strategic workforce shift to align talent with the demands of the automation and AI era.
- Prioritising people development through targeted recruitment, upskilling, and reskilling initiatives.
- Pursuing an executive education journey to deepen their own understanding of automation technologies and their implications for the workforce.
As AI and advanced technologies continue to advance at breakneck speed, companies that invest in developing their human capital will be best positioned to reap the benefits of increased productivity and growth. However, achieving this will require a concerted effort to close the widening skills gap and ensure that workers are equipped to thrive in the new technological age.